CN not prepared to accept Unifor demand for cash payments to union's political and community action fund

Unifor continues to reject fair CN settlement offer

Barring an agreement, CN plans to implement targeted work rule changes on Friday, Feb. 20, 2015

MONTREAL, Feb. 18, 2015 /CNW/ - CN (TSX: CNR) (NYSE: CNI) said today the Unifor union in Canada continues to reject a fair company offer to reach a new collective agreement in line with settlements it has negotiated with three other unions. A key stumbling block is Unifor's demand that CN contribute cash to the union's political and community action fund – as a matter of principle, CN is not prepared to allow such a union agenda to take precedence over the interests of its employees.

Unifor represents approximately 4,800 CN employees in mechanical, intermodal, clerical and other areas of the company's business.

CN's competitive settlement offer to Unifor on Sunday, Feb. 15, 2015, called for a three-year agreement, with three per cent wage increases in each year and benefit improvements fully in line with what the company negotiated recently with the United Steelworkers (3,000 maintenance-of-way employees), Teamsters Canada locomotive engineers (1,800 employees), and the Teamsters Canada-Rail Canada Traffic Controllers (180 employees).

Unifor, in rejecting CN's settlement offer, has also refused to set aside its demand that CN make cash contributions to a union fund for political and community action.

Claude Mongeau, CN president and chief executive officer, said: "This is an issue of principle for us.  CN is prepared to co-invest in charitable causes, but we are not prepared to support such a union agenda.

"We are offering several alternatives, including binding arbitration, to keep the process moving forward toward resolution. We will continue to use our best efforts to reach an agreement with Unifor.

"However, the company has now decided to modify some terms of the Unifor collective agreements, as permitted by the Canada Labour Code at this stage of the bargaining process, starting as of Friday, Feb. 20, 2015. The targeted changes will help advance the Company's objectives of improving customer service and increasing efficiency. "

Simultaneously, CN will increase Unifor members' wages by two per cent, which is greater than the current inflation rate of 1.5 per cent. While CN has signed agreements with higher wage patterns, those were reached before the economy started softening and reflected the value to CN of deals reached amicably, without the threat of disruption or potential strike action.

The company believes a negotiated deal remains the best solution and continues to be committed to bargain in good faith for a renewal of the collective agreements as soon as possible.

CN is a true backbone of the economy, transporting more than C$250 billion worth of goods annually for a wide range of business sectors, ranging from resource products to manufactured products to consumer goods, across a rail network spanning Canada and mid-America. CN – Canadian National Railway Company, along with its operating railway subsidiaries -- serves the cities and ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the metropolitan areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth, Minn./Superior, Wis., and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the Company's website at www.cn.ca.

Forward-Looking Statements 

Certain information included in this news release is "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by their nature, these forward-looking statements involve risks, uncertainties and assumptions. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or any future results or performance implied by such statements.

Important risk factors that could affect the forward-looking statements include, but are not limited to, the effects of general economic and business conditions, industry competition, inflation, currency and interest rate fluctuations, changes in fuel prices, legislative and/or regulatory developments, compliance with environmental laws and regulations, actions by regulators, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, labor negotiations and disruptions, environmental claims, uncertainties of investigations, proceedings or other types of claims and litigation, risks and liabilities arising from derailments, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to "Management's Discussion and Analysis" in CN's annual and interim reports, Annual Information Form and Form 40-F filed with Canadian and U.S. securities regulators, available on CN's website, for a summary of major risks.

CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable Canadian securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement.

SOURCE CN

CN Contacts: Media, Mark Hallman, Director, Communications Relations & Public Affairs, [phone]; Investment Community, Janet Drysdale, Vice-President, Investor, [phone]