TORONTO -- CEO Hunter Harrison said Tuesday (Nov. 11) that if Canadian National Railway (CN) can renegotiate its labor contracts to pay workers by the hour instead of distance traveled, it will be able to reduce its train and engine crew workforce by up to 35 per cent, according to this Canadian Press report.
Over the past year, CN won a breakthrough on the hourly-pay issue with some of its U.S. unions, affecting 1,700 employees and the Montreal-based company is currently negotiating with several unions representing operating crews in Canada.
Union contracts from the steam-engine era used to limit workers' daily travel to as little as 100 miles (160 kilometers), though that cap has frequently been raised over the years.
"Now we can get 7,000 to 7,500 miles (up to 12,000 kilometers) a month from the same employees that were producing 4,000 to 4,500 miles (up to 7,200 kilometers) a month," Harrison said Tuesday at a transportation conference.
"You can do the math and quickly tell that, over time, we can reduce the workforce -- from a train and engine room standpoint -- 30 to 35 per cent. That's very, very important," Harrison said.
His speech at the Smith Barney Citigroup was webcast from New York. Canada's largest railway now is in negotiations with seven unions in Canada representing 13,000 workers -- including 4,700 in the operating crews. The current three-year Canadian contracts expire at the end of this year.
In all of North America, CN has 22,350 employees, including white-collar workers.
Linked to the change in compensation, the new U.S. contracts drop old-time work rules that the company considered too restrictive
"We granted job security for all our employees as a result," Harrison said. "So that does put a time factor on (job cuts)."
Harrison said the changes are good for employees as well as CN.
"I'd be the first to tell you those people did not have a lot of quality of life," he said. "They made a lot of money but they were on call seven days a week, 24 hours, did not know when they were going to work.
"That makes it hard to plan for family outings, that sort of thing. Now they have assigned days off, assigned times to go to work each day. They don't have to sit by the telephone."
Will Canadian unions go along with the new system?
"I'm not sure," Harrison said. "It's 50--50. Kind of a new learning experience for us. But this initiative is the biggest breakthrough we've had for some time."
(The preceding Canadian Press report was filed Tuesday, Nov. 11, 2003.)
11:19:14 AM 
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