SMART-TD says it expects voting trust approval will "negatively affect
employees, shippers and most importantly public safety"
More than 130 shippers, communities, labor organizations, and other
stakeholders have already communicated opposition to CN's voting trust
proposal directly to the STB
CALGARY, AB, June 15, 2021 /CNW/ - Canadian
Pacific Railway Limited (TSX: CP) (NYSE: CP) ("CP") announced today that
SMART-Transportation Division ("SMART-TD"), North America's largest railroad
operating union, has submitted a letter urging the Surface Transportation
Board ("STB") to reject Canadian National's ("CN") proposed use of a voting
trust.
SMART-TD joins a growing list of shippers, communities, labor unions and
other stakeholders who have voiced opposition to CN's voting trust as part
of its proposal to combine with Kansas City Southern ("KCS"). In a letter to
the STB, SMART-TD President Jeremy Ferguson writes:
"The approval of the CN voting trust by the STB would be risky for the
railway industry and quite possibly will negatively impact our involved
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.
"The CN/KCS transaction is the opposite of an end-to-end merger and would be
anti-competitive due to the overlap of existing rail lines and affected
customers. The CN already has a high capacity mainline route from Chicago,
IL straight to New Orleans, LA, therefore with CN acquiring KCS there would
be no need for parallel routes such as the KCS line from Kansas City through
to New Orleans.
"If the CN voting trust and proposed merger were granted approval, we fully
expect significant job losses on either CN or 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."
In contrast, the SMART-TD letter says of Canadian Pacific's proposed
combination with KCS: "we anticipate growth in both rail businesses and jobs
for SMART-TD members."
Additional Union Concerns about a CN/KCS transaction
The Transportation Communications Union/IAM ("TCU") separately noted in a
recent letter to the STB that the CN/KCS transaction is not end-to-end and
could have long-lasting impacts: "…railroad workers lose with CN's proposed
voting trust. The consequences for TCU's members and Union Brothers and
Sisters will likely be adverse and contrary to the public interest."
District Lodge 19 of the International Association of Machinists and
Aerospace Workers, AFL-CIO, and the Teamsters Canada Rail
Conference-MWED have also filed letters with the STB opposing the
CN/KCS voting trust. Those labor organizations join more than 130 shippers,
communities and other stakeholders writing directly to the STB in opposition
to CN's voting trust proposal.
Public Comment Period for CN Voting Trust
The next two weeks, leading up to the STB's June 28 deadline, and the STB's
subsequent deliberations, will determine the course of competition for U.S.
railroading and North American commerce for the next 150 years.
Now is the time for stakeholders to voice their concerns about whether CN
should be able to lock in its anti-competitive plan to buy KCS via a voting
trust. Stakeholders can express their concerns directly to the STB.
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
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SOURCE Canadian Pacific