January 10, 2005

CN trains managers in case of running trades strike
The United Transportation Union (UTU) will be in a legal strike position against CN as early as January 20,
2005, while the Teamsters Canada Rail Conference (formerly the Brotherhood of Locomotive Engineers)
could walk out eight days later without an agreement.  The two unions must give 72 hours notice if they
intend to strike.

In the interim, CN, Canada’s largest railroad is training as many as 1,000 managers to maintain service in the
event of a strike by 6,500 CN running trade’s employees.  The Company used managers during last year's
walkout by 5,000 CAW National Council 4000 and Local 100 members.

Morgan Stanley analyst James Valentine, in an interview to Bloomberg News (January 7, 2005) said,
"Canadian National is gearing up for a possible strike.  If I were a union leader, I would be a bit careful about
threatening to strike, given how well CN operated during the CAW strike.  They didn't miss a beat."  

Notwithstanding Valentine’s statements, it must be remembered that the 30-day CAW strike did in fact force
major delays and service problems for CN, particularly in its Intermodal operations.  The strike also saw
some of the Company’s largest customers, such as the “Big-Three” automakers, switch to CP Rail during the
strike, thanks to lobbying efforts of the CAW National Office.  The strike also cut CN’s first-quarter earnings
by eight cents per share.    

However, despite the UTU and TCRC being in legal strike positions on January 20th and 28th respectively,
don’t expect to see a national strike just yet.

On December 29, 2004, the Federal Minister of Labour requested that the Canada Industrial Relations Board
(CIRB) determine whether the current “Maintenance of Activities Agreement” between the two unions and
CN, is sufficient to meet the rights and obligations of the employer, the Union and the employees in the
bargaining unit in the event of a lawful strike or lockout.  The Minister’s request is in accordance with
Section 87.4 of the Canada Labour Code.  Both parties will have an opportunity to respond in writing and the
Board will then determine if a hearing is necessary.

The Maintenance of Activities Agreement, similarly as what was done between CN and the CAW last year,
is an agreement signed by CN and all the unions at the start of collective bargaining, stating that no services
need to be continued in the event of a strike or lockout.  However, the Minister does have the power, once a
"notice of dispute" has been issued, to ask the CIRB to make its own determination in this regard.  That is
what the Minister did on December 29th.

This now blocks the UTU and TCRC from striking until the CIRB determines whether the Maintenance of
Activities Agreement is sufficient in meeting the rights and obligations of all parties involved.    

How quickly does the Board makes up its mind in these types of circumstances?  Abe Rosner, CAW
National Representative said: “Just reflect on the fact that our members at NAV Canada (Air Traffic
Controllers) have been waiting for four years, with no end in sight!”

Gary Anderson, Vice General Chairperson for the UTU’s Central Region, said in an update bulletin to UTU
members, that “the Maintenance of Activities Agreement was signed in good faith by both parties in
September of 2003,” and the UTU “has expressed its concern as to why the Minister has chosen to
intervene at this particular point in time on an agreement that has been in effect for over 16 months.”

We will continue to post information on this matter as it becomes available.
 
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