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 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