Just days after William Ackman, an activist investor, wrested control of Canadian Pacific Railroad, the honeymoon is already over.
The Teamsters Canada Rail Conference, a union representing 4,800 engineers, conductors and rail traffic controllers, could cause a labor disruption as soon as Wednesday if an agreement with railroad management isn't reached before then. Ackman, principal of Pershing Square Capital Management, overwhelmingly won a proxy fight with CP management last Thursday after shareholders approved his seven-director slate.
"We wrote to CP yesterday indicating that we would continue operating the commuter train service on all the lines without disruption,” said Doug Finnson, TCRC vice president, in giving the railroad a 72-hour strike notice. “CP has written to us today indicating they will not operate Commuter Trains in Montreal, Toronto and Vancouver. We are sorry that our employer has so little consideration for traveling public.”
The union on April 26 voted to launch a strike anytime after May 22 if CP didn't stop trying to shift workers to a cheaper pension plan. The TCRC also said concerns about “fatigue management and work/life balance also remain unresolved.”
"CP believes the offer it has presented the union is fair and reasonable. We are willing to enter into binding arbitration or negotiation period extensions should an agreement not be reached at this stage," said Mike Franczak, executive vice president and chief operations officer. "This would ensure the continued operations of freight and commuter trains on CP's Canadian network for the benefit of our customers, communities we serve and the economy at large. Any extension to the bargaining process requires consent of the union or action of the federal government."
The railroad said changes need to be made to the legacy pensions and post-retirement benefits to make CP competitive with other railroads. CP contributed about $1.9 billion of solvency deficit contributions to its pension plan in the last three years. Ackman's campaign to shake up management at CP centered on boosting earnings at the least profitable major railroad in North America.
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