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Updated: 5/25/2005; 4:30:06 PM.

 


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Wednesday, March 17, 2004

Reuters
Mon Mar 15, 5:10 PM ET

By Charles Grandmont

MONTREAL (Reuters) - The strike at Canadian National Railway Co. could be over by the end of the week, the Canadian Auto Workers (news - web sites) union said on Monday, as 5,000 workers prepared to vote on the latest contract offer from Canada's largest railway.

Photo
Reuters Photo

 

"We will begin (the vote) tomorrow and we will try to have a final result for the whole country by Friday," CAW negotiator Abe Rosner said.

If union members vote to accept the offer, the strike, now in its fourth week, would be lifted immediately.

"It's a bit ambitious, but we have to do it because the strike will continue as long as there is not a positive vote," Rosner said.

Meantime, logistical headaches for Canadian shippers will remain because the 5,000 mechanics, sales clerk and container yards workers will stay off the job until the results of the vote are known. CN carries more than half of all rail shipments in Canada.

"Everybody will be holding their breath until the ratification vote," said Bob Ballantyne, the president of the Canadian Industrial Transportation Association. "I think, in this instance, the possibility of ratification is quite high."

The CAW said the tentative three-year deal includes annual wage increases of 3 percent and scraps CN's new and much maligned disciplinary system, a sticking point that helped scupper an earlier contract offer.

Nearly a quarter of CN's work force went on strike on Feb. 20 after rejecting the initial offer.

The latest offer also contains a C$1000 ($750) back-to-work bonus and improved shift pay and pension formula.

"We will await the results of the ratification vote, we hope that it is successful and we hope to have people back as soon as possible," CN spokesman Jim Feeny said.

CN stock, which has lost 6.5 percent since the strike began, gained 31 Canadian cents, or 0.6 percent, to C$51.40 on the Toronto Stock Exchange on Monday amid a broad-based selloff. In New York, the stock closed up 46 cents at $38.76.

FIRST DEAL REJECTED

Union members caught their leadership off guard in February when they rejected a tentative agreement recommended by CAW negotiators.

The first agreement offered the same 3 percent wage increases, but did not address discontent over CN's disciplinary practices.

In the first full week of the strike, CN's overall traffic plunged 14 percent, as many shippers were forced to turn to more expensive truck deliveries to avoid bottlenecks at rail yards where containers are loaded between truck and train.

CN managers and contractors stepped in to help with the workload and, by the second full-week of the strike, overall traffic was down only 5 percent.

CN's network, which is Canada's biggest, also reaches the Gulf of Mexico through the U.S. Midwest. Its U.S. workers were not on strike.

 

CN, North America's No. 5 railway, is the continent's biggest hauler of forest products and also a major carrier of chemicals, grain and automobiles.

The nearly four-week long strike, the longest CN has faced in more than 15 years, contradicted initial industry expectations of a short disruption.

But transport analysts also said last week the strike seemed to have had a milder impact than expected on the company's operations and profitability.

"CN held to its belief that it would not hurt its operating leverage through drastic wage increases," said Merrill Lynch analyst Ken Hoexter in a research note on Monday.

"We could see a bit of a rebound in the share price over the next few days," said the analyst, who reiterated a "buy" recommendation on the stock.

($1=$1.33 Canadian)


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Wednesday, March 17, 2004

Highlights of Owner-Operator Settlement 

A tentative agreement was reached at 0630 am Monday morning covering almost 400 Owner-Operators employed by Canadian National Transport Limited. The full text of the agreement can be downloaded as a Word document by right-clicking here and choosing "Save Target as..." This highlights document can be downloaded in Railfax format by right-clicking here.

Duration: Term of three (3) years, from Jan. 1, 2004 to Dec. 31, 2006.

Lump-sum payment: All Owner-Operators active on the date of ratification will receive a one-time amount of $1,000 as an insurance adjustment.

Zone rates: All zone rates, including off-line moves, will be increased by $1.00 in each year of the agreement (total of $3.00 by 2006). This represents an average increase of more than three (3) percent per year. NOTE: This is the first time ever that zone rates have been addressed, and increased, in national negotiations.

Highway rates: Increased by $.02 cents per mile in each year of the agreement (total of $.06 by 2006).

Terminal time: At the CN intermodal terminals only, the shunt rate and waiting rates will be replaced by a single “terminal rate”. This new rate will be equal initially to the current wait time rate plus one dollar ($1.00), with two additional $1.00 increases in the remaining years of the agreement, for a total of current wait time rate plus $3.00 by 2006.

Wait time at customer only (not CN terminal): To be increased by $1.00 in each year of the agreement.

Fuel price: The price per litre paid by Owner-Operators will continue to be frozen.

Safety Bonus: The safety bonus as per the present rules will continue to be paid .

D.E.T.: The up to $100 monthly charge currently paid by Owner-Operators will stop after December 31, 2004. After that, Owner-Operators may be required to purchase a new handheld device. The charge will be capped at $500, payable in ten (10) equal monthly instalments starting January 2005. After that, the Company will pay all the monthly communication fees.

Discipline: Before Owner-Operators are disciplined, they will receive notice of the allegations, have 24 hours to consult with a union representative, and have an opportunity in a meeting or teleconference, together with their union rep if so desired, to answer the allegations before the final decision is made.

Short pay: If an Owner-Operator’s pay is short by $400 or more, he/she may demand special payment within no more than five (5) banking days.

Recovery from strike impact: At each terminal, available work will be allocated to provide an average of 50 hours of work per week, in seniority order. Should available work run out, then junior Owner-Operators may be laid off temporarily. The Company may keep no more than 25 external brokers across the whole system during this period. This provision applies until August 31, 2004, when the 70/30 ratio in Appendix 1 will again apply.

Intrazone moves: Any move at a customer which requires driving more than one kilometre on customer property, or being directed to an alternate facility where travel distance is more than one kilometre using a public road, will be paid as an intrazone move.

New hiring: There will be no new hiring of Owner-Operators at a location without first consulting with the local shop steward. NOTE: This does not mean that the Union can veto new hiring, only that we must have an opportunity to raise our concerns before it happens.

Employee and Family Assistance Program: CN’s EFAP program will be extended to cover Owner-Operators.


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News Release: CAW AND CN REACH SETTLEMENT 

[To download this in Railfax format, right-click here and choose "Save Target as..."]

The Canadian Auto Workers’ Union and Canadian National Railway reached a tentative agreement this morning after round-the-clock bargaining in Toronto.

If ratified during a vote to be held this week, the settlement will end a strike of 5,000 CAW members which began February 20.

Some highlights of the agreement include:

- An end to CN’s recently instituted discipline system, characterized by heavy penalties for real or perceived safety and rules infractions and lengthy suspensions, for the three-year duration of this contract. An immediate return to the disciplinary system and standards in place before January 1, 2001. Settlement of all outstanding discipline cases on the basis of the old system, with access to expedited procedures.
- Wage increases of 3% in each year of a three-year agreement.
- A return-to-work bonus of $1,000 for all strikers.
- A commitment to improve the pension formula to 1.8%, whenever the pension improvement account is sufficiently funded in the future, to include all workers who retire after January 1, 2004, subject to approval by all CN unions
- Afternoon and midnight shift differentials to be improved immediately to $.75 and $.80 immediately; and the midnight differential to be further improved to $1.00 per hour on Jan. 1, 2005;
- Vision care to be improved from the current $150 to $250 on Jan. 1, 2005;
- Elimination of the previously-negotiated “weekend worker” provision.
- Elimination of Appendix B (Council 4000) and Appendix D (Local 100)
- No discipline or reprisals for strike activity.

Also this morning, CN and the CAW reached a settlement for the Owner-Operators, a unit of 400 intermodal truck drivers who were not on strike. Details will follow soon, as will ratification meetings.



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