SMART-TD Chair Representing Kansas City
Southern Employees Highlights Negative Impacts Associated with a CN
Combination
CALGARY, AB, June 28, 2021 /CNW/ - 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.
FORWARD-LOOKING STATEMENTS AND INFORMATION
This news release includes certain forward-looking statements
and forward looking information (collectively, FLI). FLI is
typically identified by words such as "anticipate", "expect",
"project", "estimate", "forecast", "plan", "intend", "target",
"believe", "likely" and similar words suggesting future outcomes or
statements regarding an outlook. All statements other than
statements of historical fact may be FLI.
Although we believe that the FLI is reasonable based on the
information available today and processes used to prepare it, such
statements are not guarantees of future performance and you are
cautioned against placing undue reliance on FLI. By its
nature, FLI involves a variety of assumptions, which are based
upon factors that may be difficult to predict and that may involve
known and unknown risks and uncertainties and other factors which
may cause actual results, levels of activity and achievements to
differ materially from those expressed or implied by these FLI,
including, but not limited to, the following: changes in business
strategies and strategic opportunities; estimated future dividends;
financial strength and flexibility; debt and equity market
conditions, including the ability to access capital markets on
favourable terms or at all; cost of debt and equity capital;
potential changes in the CP share price; the ability of management
of CP, its subsidiaries and affiliates to execute key priorities;
general North American and global social, economic, political,
credit and business conditions; risks associated with agricultural
production such as weather conditions and insect populations;
the availability and price of energy commodities; the effects
of competition and pricing pressures, including competition from
other rail carriers, trucking companies and maritime shippers in
Canada and the U.S.; North
American and global economic growth; industry capacity; shifts in
market demand; changes in commodity prices and commodity demand;
uncertainty surrounding timing and volumes of commodities being
shipped via CP; inflation; geopolitical instability; changes in
laws, regulations and government policies, including regulation of
rates; changes in taxes and tax rates; potential increases in
maintenance and operating costs; changes in fuel prices; disruption
in fuel supplies; uncertainties of investigations, proceedings or
other types of claims and litigation; compliance with environmental
regulations; labour disputes; changes in labour costs and labour
difficulties; risks and liabilities arising from derailments;
transportation of dangerous goods; timing of completion of capital
and maintenance projects; sufficiency of CP's budgeted capital
expenditures in carrying out CP's business plan; services and
infrastructure; the satisfaction by third parties of their
obligations to CP; currency and interest rate fluctuations;
exchange rates; effects of changes in market conditions and
discount rates on the financial position of pension plans and
investments; trade restrictions or other changes to international
trade arrangements; the effects of current and future multinational
trade agreements on the level of trade among Canada and the U.S.; climate change and the
market and regulatory responses to climate change; anticipated
in-service dates; success of hedging activities; operational
performance and reliability; regulatory and legislative decisions
and actions; public opinion; various events that could disrupt
operations, including severe weather, such as droughts, floods,
avalanches and earthquakes, and cybersecurity attacks, as well as
security threats and governmental response to them, and
technological changes; acts of terrorism, war or other acts of
violence or crime or risk of such activities; insurance coverage
limitations; and the pandemic created by the outbreak of COVID-19
and resulting effects on CP's business, operating results, cash
flows and/or financial condition, as well as resulting effects on
economic conditions, the demand environment for logistics
requirements and energy prices, restrictions imposed by public
health authorities or governments, fiscal and monetary policy
responses by governments and financial institutions, and
disruptions to global supply chains.
We caution that the foregoing list of factors is not exhaustive
and is made as of the date hereof. Additional information about
these and other assumptions, risks and uncertainties can be
found in reports and filings by CP with Canadian and U.S.
securities regulators. Reference should be made to "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Forward-Looking Statements" in CP's
annual and interim reports on Form 10-K and 10-Q. Due to the
interdependencies and correlation of these factors, as well as
other factors, the impact of any one assumption, risk or
uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to
publicly update or revise any FLI, whether as a result of new
information, future events or otherwise. All FLI in this news
release is expressly qualified in its entirety by these cautionary
statements.
ABOUT CANADIAN PACIFIC
Canadian Pacific (TSX: CP) (NYSE: CP) is a transcontinental
railway in Canada and the United States with direct links to major
ports on the west and east coasts. CP provides North American
customers a competitive rail service with access to key markets in
every corner of the globe. CP is growing with its customers,
offering a suite of freight transportation services, logistics
solutions and supply chain expertise. Visit www.cpr.ca to see the
rail advantages of CP. CP-IR
View original
content:https://www.prnewswire.com/news-releases/more-unions-across-north-america-call-on-stb-to-reject-cn-voting-trust-301321447.html
SOURCE Canadian Pacific