|CAW Welcomes news of|
Savage Companies acquiring Alberta RailNet
|April 26, 2005
Savage Companies of Salt Lake City, Utah announced on April 21, 2005, that through its wholly owned subsidiary, Savage CANAC
Corporation, it has entered into a definitive agreement with North American RailNet, Inc. of Bedford, Texas to acquire Alberta RailNet, Inc.
“ARN”), a short line railway operation based in Grande Prairie, Alberta. The closing of the purchase is expected to be effective May 1,
2005. CAW National Council 4000 represents 24 Conductors and Locomotive Engineers at ARN.
CN had right of refusal of the sale, meaning they could have taken over operation of these rail lines, which they sold back in June of
1999. "CN's decision not to is good news to our members and employees at ARN," states CAW National Council 4000 Regional
Representative Barry Kennedy.
“From what we recently witnessed with CN’s acquisition of BC Rail, I’m not certain many of the some 60-employees who work for Alberta
RailNet would still have a job had CN exercised this right.” Mr. Kennedy said that he believes that had CN stepped in and taken control of
this operation, they would have used existing staff at CN to operate, meaning job losses for ARN employees in Grande Cache and
Grande Prairie. “They have surplus running trade employees in Jasper, surplus track and engineering personnel in Western Canada,
and the administrative and technical work would have been consolidated in Edmonton and Winnipeg.”
“Based on the geographical position of Alberta RailNet with the former BC Rail territory and CN’s mainline, I could see where it would
have been logical for CN to once more operate these lines, which they sold back in 1999. Given the recent remarks reiterated by CN’s
president and CEO Hunter Harrison following CN’s April shareholders meeting, that providing the price is right, CN is interested in
purchasing small railways in Canada and the United States; it was very possible CN could have snapped it up. The Savage deal is good
news for the communities of Grande Cache and Grande Prairie, and I’m happy for the ARN employees, particularly our members, that
Savage was successful in the purchase,” expressed Kennedy.
“I hope Savage will carry through with the future plans that ARN discussed with the CAW over the past year that will expand the business
and the company’s operations in north-western Alberta.” Kennedy said that he has heard rumours that in a deal that’s long been
discussed between ARN and CN, ARN/Savage will take over operation of the rail line between Hythe, Alberta and Dawson Creek, B.C., a
section of abandoned track that CN’s been upgrading since their purchase of BC Rail last year. “This too would be welcome news for
our members who would operate the trains on this section of track.”
Kennedy says that the CAW looks forward to a good working relationship with Savage. “We look forward to what Savage, along with its
subsidiary CANAC, has to offer with respect to not only improving the overall operations of Alberta RailNet and its customer service, but
for the working environment of our union membership.”
This relationship will be put to the test as the CAW will commence contract negotiations with Alberta RailNet later this year on its second
collective agreement for the Company’s conductors and locomotive engineers. The CAW successfully certified this group of workers in
2002, negotiating and ratifying its first collective agreement by May 2003.
CAW National Council 4000 is the umbrella organization for five (5) regionally based CAW Local Unions across Canada that represents
over 5,600 members in various sectors, largely within the transportation industry. Its Mountain Region membership falls under CAW
Local 4001, with members employed at Alberta RailNet, CN, Rocky Mountaineer Vacations, and VIA Rail Canada, spanning Western
Saskatchewan, Alberta and British Columbia.
ARN’s operations are comprised of 345 miles of track in energy-rich north-western Alberta, shipping coal, lumber, grain, fertilizer,
aggregates and many other products. ARN’s service territory is located exclusively within Alberta, stretching from the interchange with
CN at Swan Landing (between Hinton and Jasper), through Grande Cache to Grande Prairie, northwest to Hythe, and northeast to
Rycroft, Spirit River and Wanham, Alberta. ARN currently moves approximately 25,000 carloads per year, but Savage has stated that they
expect growth, particularly in coal traffic, which will see movement of more than 40,000 carloads by 2006. Alberta RailNet’s headquarters
is based in Grande Prairie.
More on this story:
Savage Companies acquire Alberta RailNet from North American RailNet