SMART-TD Chair Representing Kansas City
Southern Employees Highlights Negative Impacts Associated with a CN
Combination
CALGARY, AB, June 28, 2021 /PRNewswire/ - Canadian Pacific
Railway Limited (TSX: CP) (NYSE: CP) ("CP") announced today that
unions representing railroad employees across the U.S., including
SMART-Transportation Division ("SMART-TD") General Committee
GCA-457 representing Kansas City Southern ("KCS") employees, have
written letters urging the Surface Transportation Board ("STB") to
reject Canadian National's ("CN") proposed use of a voting
trust.
Many of the unions express concerns about job loss, increased CN
debt load and regulatory challenges a CN/KCS transaction would
face. Excerpts from the letters include:
"If the CN voting trust and proposed merger were granted
approval, we fully expect significant job losses on KCS because
ultimately the transaction would require either a sale or
abandonment of duplicative rail lines. The consequences for
SMART-TD members would be uncertain, adverse, and certainly
contrary to the public interest." -- Sam
Habjan, General Chairperson of SMART-Transportation Division
General Committee GCA-457, representing approximately 675
trainpersons on the KCS
"The approval of the CN voting trust by the STB would be risky
for the railway industry and quite possibly will negatively impact
our SMART-TD members. Approval of the CN voting trust proposal
would harm employees of both KCS and CN due to the amount of debt
CN will carry and the real possibility that the CN transaction
would fail the regulatory test in the end." -- Joint letter from
Legislative Directors of SMART-Transportation Division in the
states of Kansas, Missouri, Louisiana, Texas, Mississippi and Illinois
"...rejecting the CN voting trust appears to offer better
options for rail shippers and we would further anticipate a
pro-growth environment in both business and jobs for SMART-TD
members."-- Richard Lee, General Chairperson of
SMART-Transportation Division, representing 41 members in all
crafts on the Central Maine &
Quebec Railway
"The approval of the CN voting trust by the STB will adversely
affect both our SOO and DM&E-South Engineers and Trainmen. In
addition, it would probably set off a round of mergers that will
harm the railway industry. Additionally it will harm employees of
both the KCS and CN by saddling CN with considerable debt." --
Peter Semenek, General Chairman,
Brotherhood of Locomotive Engineers and Trainman, representing 570
locomotive engineers and trainpersons on CP (DM&E and
SOO)
"…railroad workers lose with CN's proposed voting trust. The
consequences for our members and Union Brothers and Sisters on both
sides of the border will likely be adverse and contrary to the
public interest." -- Rick Raso,
President, Unifor Local 101R, representing 1,500 active CP
locomotive and car repair employees in Canada
Along with the letter, SMART-TD General Committee GCA-457 filed
a petition signed by more than 85 KCS employees urging the STB to
reject the CN voting trust. Petitions opposing the CN trust have
been submitted by railway employees across North America, including locomotive engineers,
conductors, dispatchers and others.
Earlier this month, the president of SMART-TD, North America's largest railroad operating
union, filed an opposition letter with the STB noting potential
negative impacts to SMART-TD members. The Transportation
Communications Union/IAM, District Lodge 19 of the International
Association of Machinists and Aerospace Workers, and the Teamsters
Canada Rail Conference-MWED previously filed letters with the STB
opposing the CN/KCS voting trust.
These labor organization letters are part of 330-plus letters to
the STB from shippers, communities and other stakeholders
expressing concern about CN or the use of a voting trust.
Public Comment Period for CN Voting Trust Ends
Today
Allowing CN to close into trust would not be in the
public interest because its approval would pre-judge STB review,
harm competition, risk CN shifting financial burdens to shippers,
and pave the way for additional U.S. rail consolidation. CN's
arguments in favor of a trust amount to the claim that CN and KCS
should be able to decide what is in the public interest based on
which railroad is offering more money to acquire KCS – that
argument elevates private interests over the public
interest.
CP maintains that a CP-KCS combination is the only viable Class
1 merger that serves the best interests of customers and
stakeholders, but also the continent's rail network to enable a new
corridor of investment and capacity for the North American economy
to grow.
For more information on the transaction and the benefits CP-KCS
is expected to bring to the full range of stakeholders, visit
FutureForFreight.com.
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SOURCE Canadian Pacific