CPKC prepares to restart railway operations, awaits CIRB order

Rhea-AI Summary

Canadian Pacific Kansas City (CPKC) is preparing to restart railway operations in Canada following the Labour Minister's announcement to direct the Canada Industrial Relations Board (CIRB) to impose final binding arbitration. CPKC will follow the CIRB's order once issued. The company acknowledges the government's intervention to protect Canada's national interest, despite preferring collective bargaining. CPKC CEO Keith Creel expressed readiness to welcome employees back and restore full railway operations. The work stoppage affected approximately 3,200 locomotive engineers, conductors, and train/yard workers, as well as 80 rail traffic controllers represented by the Teamsters Canada Rail Conference (TCRC).

Positive

• Imminent restart of railway operations in Canada
• Government intervention to end the work stoppage
• Potential resolution of labor dispute through final binding arbitration

Negative

• Disruption to railway operations and supply chains due to work stoppage
• Reliance on government intervention rather than successful collective bargaining
• Potential impact on customer relationships and service due to operational interruption

CALGARY, AB, Aug. 22, 2024 /PRNewswire/ - Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC) today said it is preparing to restart railway operations in Canada following the Canadian Minister of Labour's announcement that he will exercise his authority under Section 107 of the Canada Labour Code to direct the Canada Industrial Relations Board (CIRB) to impose final binding arbitration and for railway operations to resume forthwith.

CPKC will follow the order of the CIRB once it executes the Minister's direction. Our teams are already preparing for the safe and orderly resumption of our rail network and further details about timing will be provided once we receive the CIRB's order.

"The Canadian government has recognized the immense consequences of a railway work stoppage for the Canadian economy, North American supply chains and all Canadians," said Keith Creel, CPKC President and CEO. "The government has acted to protect Canada's national interest. We regret that the government had to intervene because we fundamentally believe in and respect collective bargaining; however, given the stakes for all involved this situation required action.

"CPKC looks forward to welcoming all of our employees back to work to restore our railway to full strength and get back to serving our customers and moving Canada's trade and commerce throughout North America," Creel added.

The Teamsters Canada Rail Conference (TCRC) – Train & Engine represents CPKC's roughly 3,200 locomotive engineers, conductors and train and yard workers, and the TCRC – Rail Canadian Traffic Controllers represents approximately 80 rail traffic controllers, all in Canada.

Forward looking information
This news release contains certain forward-looking information within the meaning of applicable securities laws in both the U.S. and Canada. This news release contains forward-looking information relating, but not limited to, collective bargaining between CPKC and its labour unions, potential work stoppage and CPKC's business, operations and service. This forward-looking information also includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance.  Forward-looking information may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "should" or similar words suggesting future outcomes.   

Undue reliance should not be placed on forward-looking information as actual results may differ materially from the forward-looking information. Forward-looking information is not a guarantee of future performance. By its nature, CPKC's forward-looking information involves numerous assumptions, inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information, including but not limited to the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks in agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; changes in commodity prices; uncertainty surrounding timing and volumes of commodities being shipped via CPKC; inflation; changes in laws and regulations, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; and various events that could disrupt operations, including severe weather, droughts, floods, avalanches and earthquakes as well as security threats and governmental response to them, and technological changes. The foregoing list of factors is not exhaustive.  These and other factors are detailed from time to time in reports filed by CPKC with securities regulators in Canada and the United States. Reference should be made to "Item 1A - Risk Factors" and "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Information" in CPKC's annual and interim reports on Form 10-K and 10-Q. Readers are cautioned not to place undue reliance on forward-looking information. Forward looking information is based on current expectations, estimates and projections and it is possible that predictions, forecasts, projections, and other forms of forward-looking information will not be achieved by CPKC. Except as required by law, CPKC undertakes no obligation to update publicly or otherwise revise any forward-looking information, or the foregoing assumptions and risks affecting such forward-looking information, whether as a result of new information, future events or otherwise.

About CPKC
With its global headquarters in Calgary, Alta., Canada, CPKC is the first and only single-line transnational railway linking Canada, the United States and México, with unrivaled access to major ports from Vancouver to Atlantic Canada to the Gulf of México to Lázaro Cárdenas, México. Stretching approximately 20,000 route miles and employing 20,000 railroaders, CPKC provides North American customers unparalleled rail service and network reach to key markets across the continent. CPKC is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpkcr.com to learn more about the rail advantages of CPKC. CP-IR

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SOURCE CPKC

FAQ

When will CPKC restart railway operations in Canada?

CPKC is preparing to restart operations but will follow the order of the Canada Industrial Relations Board (CIRB) once it executes the Minister's direction. Exact timing details will be provided after receiving the CIRB's order.

How many CPKC employees were affected by the work stoppage?

The work stoppage affected approximately 3,200 locomotive engineers, conductors, and train and yard workers, as well as 80 rail traffic controllers in Canada, all represented by the Teamsters Canada Rail Conference (TCRC).

What action did the Canadian government take regarding the CPKC work stoppage?

The Canadian Minister of Labour announced he will exercise his authority under Section 107 of the Canada Labour Code to direct the CIRB to impose final binding arbitration and for railway operations to resume forthwith.

How does CPKC (CP) view the government's intervention in the labor dispute?

CPKC acknowledges the government's action to protect Canada's national interest, though the company fundamentally believes in and respects collective bargaining. They regret that government intervention was necessary but recognize the high stakes for all involved.