Unifor Ratifies New CN Collective Agreements

Rhea-AI Summary

CN (TSX: CNR) (NYSE: CNI) has successfully ratified new four-year collective agreements with Unifor, representing approximately 3,300 employees in Canada across mechanical, clerical, and intermodal functions. The agreements, ratified on December 22, 2024, include 3% annual wage increases and will remain in effect until December 31st, 2028. CN's CEO Tracy Robinson emphasized that these agreements strengthen their workforce and enhance their ability to serve customers reliably across North America.

Positive

• Successful ratification of labor agreements ensuring workforce stability for 4 years
• 3% annual wage increases provide predictable labor costs through 2028
• Agreement covers 3,300 employees across critical operational functions

Negative

• Increased labor costs due to 3% annual wage increases may impact operating margins

Insights

Labor Relations Expert

The ratification of collective agreements with Unifor represents a important development for CN's operational stability. The 3% annual wage increase aligns with current inflation expectations and industry standards, providing predictable labor costs through 2028. The agreement covering 3,300 employees across mechanical, clerical and intermodal functions ensures continuity in critical operational areas.

Most notably, achieving this agreement through collaborative negotiations without work stoppages helps maintain CN's service reliability - a vital factor for a railway operator. The four-year duration offers extended stability for workforce planning and cost projections, enabling better long-term strategic decisions. The timing of this ratification, ahead of the holiday season, eliminates potential disruption risks during a traditionally busy shipping period.

Financial Analyst

This agreement's financial implications are strategically favorable for CN. The 3% annual wage increases provide cost predictability through 2028, allowing for accurate long-term financial planning. While this represents a fixed cost increase, it's manageable within CN's operating model and current profit margins. For context, CN's operating ratio typically allows for such labor cost increases without significant margin compression.

The agreement's structure helps protect against potential wage inflation spikes, effectively locking in labor costs at reasonable levels. This predictability is particularly valuable for investors, as it reduces uncertainty in future earnings projections. The peaceful resolution also avoids potential revenue losses and customer relationship damage that could result from labor disputes, protecting shareholder value in the near and medium term.

MONTREAL, Dec. 23, 2024 (GLOBE NEWSWIRE) -- CN (TSX: CNR) (NYSE: CNI) announced today that its new four-year tentative collective agreements with Unifor were formally ratified by employees on Sunday, December 22, 2024. The union represents approximately 3,300 employees at CN in Canada, working in different mechanical, clerical, and intermodal functions, all covered by multiple collective agreements.

"We are pleased to have achieved these new collective agreements through collaborative negotiations. By working together with Unifor, we now have new agreements that strengthen our workforce and enhance our ability to serve customers reliably across North America. I want to thank both teams for their constructive approach to these negotiations and their shared commitment to CN's long-term success."
      - Tracy Robinson, President and Chief Executive Officer, CN

These new four-year agreements include 3% wage increases annually. They expire on December 31^st, 2028.

About CN
CN powers the economy by safely transporting more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year for its customers. With its nearly 20,000-mile rail network and related transportation services, CN connects Canada’s Eastern and Western coasts with the U.S. Midwest and the Gulf of Mexico, contributing to sustainable trade and the prosperity of the communities in which it operates since 1919. 

Contacts:

Media	Investment Community
Jonathan Abecassis	Stacy Alderson
Director	Assistant Vice-President
Public Affairs and Media Relations	Investor Relations
(438) 455-3692	(514) 399-0052
media@cn.ca	investor.relations@cn.ca

FAQ

What are the key terms of CN's (CNI) new collective agreements with Unifor?

The new four-year collective agreements include 3% annual wage increases and will be effective until December 31st, 2028, covering approximately 3,300 employees in mechanical, clerical, and intermodal functions.

How many employees are covered under CN's (CNI) new Unifor agreements?

The agreements cover approximately 3,300 CN employees in Canada working in mechanical, clerical, and intermodal functions.

What is the duration of CN's (CNI) new collective agreements with Unifor?

The new collective agreements have a four-year term, expiring on December 31st, 2028.

What is the annual wage increase in CN's (CNI) new Unifor agreements?

The new agreements include 3% wage increases annually over the four-year term.