Legacy Pension issues must be addressed in new contract
CALGARY, Feb. 17, 2012 /CNW/ - Citing business imperatives as the reason
to address the railway's legacy pension, Canadian Pacific
(TSX:CP)(NYSE: CP) today requested the Federal Minister of Labour
appoint a conciliator to assist in progressing discussions on a new
labour agreement with the union which represents the company's Canadian
train crew employees and rail traffic controllers.
"The legacy pension costs significantly impact CP's operating ratio and
our ability to further fund investments that will support growth
opportunities for our customers," said Canadian Pacific President & CEO
Fred Green. "We've made changes to the management pension plan. The
time to address this within our collective agreements is now."
"These are difficult and complex issues for both parties. CP believes
that expert, third-party support, with a focused time table, will offer
the best opportunity to achieve a settlement."
CP is seeking to achieve changes to legacy pension and post-retirement
benefits to make them industry-comparable. CP has contributed $1.9
billion of solvency deficit contributions to its pension plan over the
past three years.
"We have a number of proposed options for pension plan modifications,
some of which align with the industry, all of which are fair to
employees, and none of which have any impact on existing pensioners,"
Among the range of proposed amendments, some of the options provide
guaranteed pension payment that is a multiple of average Canadian
industrial pension payment and is comparable to what this union has
already agreed to for the majority of its members at another major
The company noted that its existing contract with the union, which
represents 4,800 engineers, conductors and rail traffic controllers,
expired on December 31, 2011. CP has been in negotiations since early
October 2011 with the union on a number of topics ranging from wages to
work rule changes and pensions, all intended to further drive service,
productivity, and efficiency. No unions, including this one, are in a
legal strike position.
The average conciliation process can last between 80 and 90 days.
Note on forward-looking information
This news release contains certain forward-looking statements relating
but not limited to our operations, proposed investments, anticipated
financial performance and business prospects. Undue reliance should
not be placed on forward-looking information as actual results may
By its nature, CP's forward-looking information involves numerous
assumptions, inherent risks and uncertainties. Forward-looking
statements are not guarantees of future performance. Factors that
could affect forward-looking information include, but are not limited
to: changes in business strategies; general North American and global
economic, credit and business conditions; ; inflation; currency and
interest rate fluctuations; the availability and price of energy
commodities; the effects of competition and pricing pressures; industry
capacity; shifts in market demand; changes in laws and regulations,
including regulation of rates; changes in taxes and tax rates; actions
by regulators; potential increases in maintenance and operating costs;
uncertainties of litigation; risks and liabilities arising from
derailments; timing of completion of capital and maintenance projects;
currency and interest rate fluctuations; technological changes; and
various events that could disrupt operations, including severe weather
conditions, flooding, earthquakes, labour disputes, risks and
liabilities arising from derailments as well as security threats and
governmental response to them. Other risks are detailed from time to
time in reports filed by CP with securities regulators in Canada and
the United States. Reference should be made to "Management's
Discussion and Analysis" in CP's annual and interim reports, Annual
Information Form and Form 40-F for a summary of major risks.
Except as required by law, CP undertakes no obligation to update
publicly or otherwise revise any forward-looking information, whether
as a result of new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific (TSX:CP)(NYSE: CP) operates a North American
transcontinental railway providing freight transportation services,
logistics solutions and supply chain expertise. Incorporating
best-in-class technology and environmental practices, CP is re-defining
itself as a modern 21st century transportation company built on safety,
service reliability and operational efficiency. Visit cpr.ca and see
how Canadian Pacific is Driving the Digital Railway.
SOURCE Canadian Pacific
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