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BusinessRail

Strike on Tuesday looms for Canadian National after Teamsters sends notice to company

Talks are ongoing but there is now a strike notice overhanging Canadian National and its 3,200 Teamsters members.

Both the company and the union announced late Saturday that the Teamsters had served a strike notice to CN. The  strike would occur just after the stroke of midnight on Tuesday, November 19. 

In its prepared statement, CN quoted COO and executive vice president Rob Reilly as saying the railroad had offered binding arbitration to the union but it had declined. “If a settlement cannot be reached this weekend, we will once again encourage the union leadership to accept binding arbitration as an alternative to disrupting the Canadian economy,” Reilly said, according to the statement. “We remain committed to constructive talks to reach an agreement without a work stoppage.”

Among the other accusations lobbed at the railroad by the union, the Teamsters said CN “wants to make it more difficult to take time off and make employees work longer hours.” The goal, the union said, is “an attempt to get more work done with fewer people and to reduce staffing levels.” 

Complaints of too-tight personnel numbers have been levied against several railroads in the last year or more, and not just by unions. It has been fueled to a large degree by the class 1 railroads’ embrace of precision railroading. One of the key pillars of PSR is reduced employee numbers.

Teamsters President Lyndon Isaak did not mention PSR in his prepared statement. But it wasn’t hard to think PSR when reading his quote: “This obsession with profits and shareholder return, at the expense of just about everything else, is exactly what is wrong with our economy.”

In CN’s recent third quarter results, the company reported a 4% increase in revenue from the third quarter of 2018, an increase in diluted earnings per share of 8%, an increase in operating income also of 8% and a strong operating ratio of 57.9%.

The union statement also made clear that it is not interested in binding arbitration. “Rather than reaching an agreement at the bargaining table, CN is intent on submitting these issues and more to binding arbitration,” the Teamsters statement said. “By resolving its differences with the union through arbitration, the company hopes to achieve gains that could not have otherwise been made by negotiating in good faith.”

The union said negotiations have been ongoing for seven months. A Canadian government mediator has been involved for the last five. 

The union statement was far more specific than the company release, with more details about either what the railroad was seeking or the current conditions that the Teamsters are looking to change. The strike notice comes just days after reports that CN was planning on layoffs of up to 1,600 workers though it was unclear how many of those were members of the Teamsters. 

“CN currently requires (Teamsters) members to operate trains alone from outside of the locomotive, hanging on to moving trains with one hand while operating a remotely controlled locomotive with the other,” the union said in its statement. “Railroaders are expected to do this in rain and in freezing temperatures, sometimes for distances of up to about 17 miles.”

The union and company are also in a standoff over lifetime pharmaceutical benefits, according to the union.

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.

19 Comments

  1. Apparently CN’s neglect doesn’t stop at employee safety , it also affects citizens and municipalities !

    Quote: Long traffic delays from CN trains rile Ferndale residents, business owners

    “Angry residents, motorists and business owners in Ferndale are speaking out against trains blocking intersections for as long as an hour at a time.
    CN Railway has a 50-acre intermodal rail yard at 600 Fern Street in the city. The facility is near Hilton
    Road between Eight Mile and Nine Mile roads.

    Tracks near the yard cross Hilton and Nine Mile roads, where people say significant delays have become routine.
    “People are just fed up,” said Frank Poota, owner of the 9 & Hilton Market. “It’s out of control.”
    A quick trip to the store or a restaurant can turn into an aggravating endurance test of patience behind the wheel.
    Ray Johnson, a Detroit resident, said he works in Ferndale and got stuck for more than a half hour at the rail crossing last week.
    “I went out to grab something for lunch and it turned into a nightmare,” he said. “I got back late from my lunch break and my boss told me to avoid the Nine and Hilton area in the future when I take lunch.”
    Poota’s market is just east of Hilton on Nine Mile Road. He said he’s losing thousands of dollars of business a month because of the delays.
    Some customers have told him they like his store but don’t want to risk getting stuck in a massive traffic.
    Trains stopped at the rail facility for loading end up having multiple freight cars sitting idle at intersections while motorists fume.
    “Sometimes the trains block Nine Mile for 30 or 50 minutes at a time” Poota said. “Trains can end up blocking that intersection a total of two to three hours a day. It’s been bad for the last few years, but this year it’s been crazy. CN has complete disregard for the city or anybody here.”
    Complaints at City Hall and on social media about the traffic delays have picked up in recent months, said Joe Gacioch, Ferndale’s city manager.
    “There’s definitely a sense of frustration about this in our community,” he said. “They are calling and emailing us, and even posting video of the trains on social media.”
    One problem Ferndale faces is that cities have no legal recourse – either criminal or civil – to make CN correct or pay for the delays its trains cause, Gacioch said.
    “Our hands are tied,” he said. “The trains are regulated by the Federal Rail Administration because trains are used for multi-state transfer of goods.”
    The FRA is one of 10 agencies in the U.S. Department of Transportation concerned with intermodal transportation. The FRA’s role is to oversee rail regulations. Intermodal transportation consists of large uniform containers that are transported by ship, rail and truck throughout the country and around the world.
    There are reportedly no federal rules or penalties that limit the amount of time a train can block an intersection.
    Gacioch said he and other Ferndale officials have reached out to CN about the long delays the company’s Moterm facility in the city is causing. The rail yard was expanded by about a dozen acres in the last few years.
    “They are having some issues at the site that are being remediated and the problem should be corrected within a month,” Gacioch said.

    CN only accepts emailed questions from news media. The Daily Tribune this week sent an email to the company asking what causes the long delays and what is being done to resolve the problem.

    Alexandre Boule, a senior media advisor for CN in Montreal, responded with a short statement
    “For about the last month we have been making improvements within our yard to address localized drainage issues,” he said. “Unfortunately, the work has temporarily reduced our yard capacity leading to the abnormal train movements across 9 Mile and Hilton Road. The yard work should be completed in the upcoming days. CN would like to apologize for the inconvenience caused and appreciates the residents of Ferndale’s patience during the process.”

    The claim that the problem with delays is tied to correcting a drainage problem over the last month is at odds with what Poota said he’s seen in his many years on Nine Mile near Hilton.

    “It’s worse lately, but all these delays have been a problem for years,” he said. “I know customers who have moved because of the trains and I’m thinking now of moving my business.”

    The only recourse the city has is to build better relations with CN’s government team in the area, Gacioch said.
    CN spent about $1 million two years ago to create quiet zones at three crossings Ferndale and a new rail yard entrance to bring residential neighbors relief from train whistles and truck traffic. The move required federal approval, but Ferndale has some history of successfully working with the rail company.

    Jordan Twardy, Ferndale’s community and economic development director, said businesses that are affected by the train delays can call his office at 248-546-2363.

    “I want to hear from businesses that want to testify to the disruption that’s been done,” he said. “It’s something we’re willing to look into to see what can be done. I’ve heard the frustration of businesses. The delays have never been this acute of an issue before.”

    Re-quote:

    “The FRA is one of 10 agencies in the U.S. Department of Transportation concerned with intermodal transportation. The FRA’s role is to oversee rail regulations. Intermodal transportation consists of large uniform containers that are transported by ship, rail and truck throughout the country and around the world.

    There are reportedly no federal rules or penalties that limit the amount of time a train can block an intersection.”

    Come on FRA wake up and increase regulation . It’s time to crack down on Rail ! Money talks ! Start penalizing them with hefty fines once trains block intersections over 10 minutes ! This is negatively affecting global warming and causing extra vehicle emissions due to unnecessary idling , LOL !

    Quote :

    “Car Emissions and Global Warming

    Published Jul 18, 2014

    Global warming endangers our health, jeopardizes our national security, and threatens other basic human needs. Some impacts—such as record high temperatures, rising seas, and severe flooding and droughts—are already increasingly common.

    Our personal vehicles are a major cause of global warming. Collectively, cars and trucks account for nearly one-fifth of all US emissions, emitting around 24 pounds of carbon dioxide and other global-warming gases for every gallon of gas. About five pounds comes from the extraction, production, and delivery of the fuel, while the great bulk of heat-trapping emissions—more than 19 pounds per gallon—comes right out of a car’s tailpipe.

    In total, the US transportation sector—which includes cars, trucks, planes, trains, ships, and freight—produces nearly thirty percent of all US global warming emissions, more than almost any other sector.”

    End quote !

    In my humble opinion ……………

  2. Parliament isn’t scheduled to convene until Dec. 5 . However, in order to circumvent a “potential” back to work order due to a potential strike , the union , ie; chould have suggested union members go see a doctor due to PTSD .

    Quote:
    ” What is post-traumatic stress disorder?
    Post-traumatic stress disorder (PTSD) is a mental illness. It involves exposure to trauma involving death or the threat of death, serious injury, or sexual violence.

    Something is traumatic when it is very frightening, overwhelming and causes a lot of distress. Trauma is often unexpected, and many people say that they felt powerless to stop or change the event. Traumatic events may include crimes, natural disasters, accidents, war or conflict, or other threats to life. It could be an event or situation that you experience yourself or something that happens to others, including loved ones.”

    In this particular case the PTSD would have been caused at work due to the “frightening threat of death and serious injury” due to UNSAFE working conditions (wink) . And the “illness would rectify itself once work conditions are safer . LOL !

    Quote:
    ” What is back-to-work legislation?
    It’s a special law passed by the government — federal or provincial — that orders an end to a labour-management dispute. The power to force an end to a strike or lockout was reinforced by the Supreme Court in 1987, after the Alberta government asked if unions had a constitutionally protected right to strike. The court said they did not.”

    Well now , you can’t force “employees” back to work who are suffering from PTSD caused by an unsafe work environment , and are on “sick leave” ……………….. And sick leave doesn’t cost the union a penny , however, it costs a corporation tremendously .

    The point is , act reasonably within a negotiation . Attempting to “force” people into accepting inhumane working conditions is not something that should be up for debate . And trying to force human beings back to work under such circumstances can drive them to outsmart you by a mile at your expense rather than at theirs .

    The union didn’t play their cards right . They could have outsmarted CN & the government .

    From perspective working in an unsafe environment and or within unsafe conditions is “traumatic” .

    Luckily for CN , I’m not part of the union nor any labor union , nor have I anything to do with CN . Cause if I were , I would give them a run for their money . The shareholders & government would be freaking out on managements case . LOL !

    In conclusion: CN should simply be fair and do good by their employees . And government shouldn’t attempt to bully in and play with people’s minds . If government believes rail is to important economically to be jeopardized ,then perhaps rail should be held in another party’s hands . However, government themselves haven’t been impartial when disputes occur between their crown corporations and their laborers .

    History is a wonderful teacher .

    In my humble opinion ………….

  3. Noble1 – we’d be more likely to ready your comments IF YOU DIDN’T WRITE SO MUCH IN EACH POST.

    PLEASE…just make your point succinctly and briefly.

    1. My apologies , there’s just so much to cover and explain . And my apologies for taking over the thread .

      Here’s an update :

      Canadian ministers meet with CN Rail, union in effort to avert strike

      “Canada’s Liberal government sent two ministers on Monday to meet with representatives of Canadian National Railway and its largest union, as already hard-hit shippers pleaded for government intervention to avert a strike planned for early on Tuesday.”

      “Urging Ottawa to intervene
      Alberta wheat and barley commissions, representing farmers, urged Ottawa to intervene, as they are already facing difficult harvest conditions because of weather. “There are a lot of farmers who already have a significant amount of their income trapped under snow,” said Gary Stanford, Alberta Wheat Commission chair. “Now adding insult to injury, we’re looking at possible CN rail strike action too.”

  4. In my opinion there’s a better updated article on the subject that was released approximately 2 hours ago by Financial Post titled :

    “Looming CN strike adds to woes for already battered Western farmers”

    And I can’t believe what the Union president of the Teamsters Canada Rail Conference stated as an ultimatum !

    Quote:

    ” The union declined a company offer of binding arbitration as it “rarely if ever goes our way,” Isaak said.
    “It’ll be up to CN whether they want to shut down or not and it’s up to the government if they will order us back to work,” he said.”

    Re-quote :
    “It’ll be up to CN whether they want to shut down or not and it’s up to the government if they will order us back to work,” he said ”

    Ok in my humble opinion both “leaders” of both parties need to be replaced in this negotiation .

    -CN isn’t budging and wants a binding arbitration and avoid a work stoppage .
    -The Teamster wants to negotiate at the table without a binding arbitration and states that if it doesn’t get what it wants then it’s CN’s fault and the government can order them back to work ????

    So it’s a 50/50 coin toss and if either party doesn’t budge then the government could “potentially” order them back to work and there will be a binding arbitration . Wow , LOL !

    What kind of a “negotiation is that ??? People’s lively hoods are at stake here ! You can’t just play around with a coin toss or a roll of the dice ! I’m disappointed in the Union leader’s statement . Both “leaders” in this dispute are clearly unreasonable and incompetent , and the victims in the middle are the clients and consumers due to their incompetence . And what is the “mediator” doing , you know the one who is suppose to “reason” these two ???

    This dispute is over heath care & safety for crying out loud , not even over wages per se !

    The absurdity of this dispute is shocking .

    However, I’ve been in arbitration and I obtained exactly what I wanted , on more than one occasion .

    It’s certainly not amusing to debate with unreasonable people .

    But you never know , perhaps these two will come to reason and find some common ground .

    I deeply sympathize with the farmers , and CN laborers .

    And the drama continues , stay tuned !

  5. CN Rail workers have gone on strike . That’s certainly no surprise . I think anyone following the story could have predicted that outcome .

    Quote:
    “CN said it believes a strike can be averted “with the assistance of federal mediators,” after Teamsters declined to submit to binding interest arbitration. ”

    WRONG !

    The Canadian two ministers who went to meet both parties in an attempt to avert the strike failed .

    There’s an updated article titled : Thousands of CN Rail employees head on strike, but talks continue .

    I would be surprised if they came to an agreement on their own . They’ve been in dispute for 7 months .

    For those interested there was a detailed article written explaining facts of what “back to work legislation” is all about in June 2011 titled :
    “FAQ: Back-to-work legislation”

    I don’t see the union budging in this one especially not after what the union president stated as his ultimatum , nor should they in regards to their health & safety demands . I certainly would have played it differently to protect the members from layoffs through a sort of example as I mentioned in a prior comment . And I would accept a capped health plan until the next collective bargaining round .

    The union knows their opponent well in this matter and the union most likely knew about freight demand slowing down . But that was quite a slap in their face when CN decided to announce those 1600 layoffs during their heated debate at the bargaining table . They should have anticipated it .

    If , which I think it most likely will, go into a binding arbitration , the union will win on their safety demands but their heath benefit plan will be capped in the current negotiating contract at least until the next collective bargaining contract date . Accepting a “lifetime” cap would be absurd and asking for one is ludicrous .

    In my humble opinion ……….

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