Yahoo Finance CN strike ends as tentative deal reached with union
The union representing about 3,200 striking Canadian National Railway (CNR.TO) workers and the company reached a tentative agreement on Tuesday, bringing the week-long strike an end.
The tentative deal comes as welcome news to industries across the country that have been raising concerns about the potentially devastating economic impacts of a prolonged strike.
Teamsters Canada Rail Conference released a statement Tuesday that said operations would resume at 6 a.m. local time across the country on Wednesday as conductors, trainpersons and yard workers return to work.
The agreement still needs to be ratified by union members, a process which is expected to take several weeks. Teamsters said details of the deal will not be released until union members have first reviewed it. Health and safety issues, not wages, were at the centre of the strike that began just after midnight last Tuesday.
“We were able to make improvements in terms of health and safety and at the same time stop the company from making certain changes that, in our opinion, would have made the situation worse,” Teamsters spokesperson Christopher Monette said in an interview with Yahoo Finance Canada.
In a statement released Tuesday, CN’s chief executive JJ Ruest thanked customers for their patience and support throughout the negotiations, which had appeared to have reached an impasse as recently as Monday.
“CN is preparing to resume full operations as soon as possible,” he said.
“I would also like to personally thank our employees who kept the railroad moving safely at a reduced capacity. CN and its people are committed to moving the North American economy by providing freight service that enables economic growth.”
The federal government had faced growing pressure to intervene in the strike, including calls from some provinces to enact back-to-work legislation, as industries grappled with the fallout of a work stoppage.
Still, the government had resisted calls to intervene and said collective bargaining was the fastest way to resolve the dispute.
On Monday, Nutrien said it would curtain production at its largest potash mine because of the strike, laying off hundreds of employees for two weeks. Will Tigley, a spokesperson for the Saskatoon-based company, said the firm will still require the two-week curtailment to balance its inventory.
“But it’s good news for farmers, the Canadian economy and us,” Tigley said. “It’s going to prevent further production slowdowns and shutdowns across our network.”
Speaking to reporters gathered in Ottawa, Transport Minister Marc Garneau said had the government decided to take a different approach and begin the process of enacting back-to-work legislation, a solution would have not have been reached by Tuesday.
“The result because of the approach we took is that we do have a solution today and, better still, the two parties sat down and mutually agreed to a solution,” Garneau said.
“That is always a better approach than to use forced legislation.”
Teamsters also thanked Prime Minister Justin Trudeau for “respecting workers’ right to strike” in a statement Tuesday.
“Previous governments routinely violated workers’ right to strike when it came to the rail industry,” Teamsters Canada president François Laporte said in a statement.
“This government remained calm and focused on helping parties reach an agreement, and it worked.”
While industry groups applauded the end of the strike, the Grain Growers of Canada called on the government to ensure a similar situation doesn’t happen again. The strike has exacerbated what is being called “one of the worst harvests on record,” leaving farmers to now contend with a backlog of product.
“Grain Growers of Canada is calling on government to look ahead and put plans in place to ensure that next time a rail strike is threatened, farmers, and the Canadian economy as a whole, cannot be held hostage,” the group said in a statement.
“We’ve seen the impact of a week-long rail strike and it simply cannot happen again.”
While the strike will hurt CN’s results in the upcoming fourth quarter, RBC Capital Markets analyst Walter Spracklin wrote in a note to clients Monday that it would not affect CN’s stock over the long-term or its 2020 revenue ton miles (RTM) forecast.
“However, we believe volumes, operating ratio and earnings will all be impacted [in the fourth quarter] but CN’s volumes were already down 11 per cent quarter-to-date as of week 46, prior to the strike,” Spracklin wrote.
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