FP News Top Story

The Canadian Press - ONLINE EDITION

CP plan to cut workforce, reduce costs drives stock up four per cent

By: The Canadian Press

Posted: 12/5/2012 10:28 AM | Comments: 0 | Last Modified: 12/5/2012 3:45 PM

Canadian Pacific locomotives sit in a rail yard in Montreal on Wednesday, May 23, 2012. Investors are welcoming a new plan by Canadian Pacific Railway Ltd. to drive down costs, while a union representing 5,000 of its employees is awaiting more details on major job cuts. THE CANADIAN PRESS/Ryan Remiorz

CALGARY - Investors are welcoming a new plan by Canadian Pacific Railway Ltd. to drive down costs, while a union representing 5,000 of its employees is awaiting more details on major job cuts.

Shares in the Calgary-based company (TSX:CP) closed up about four per cent to $96.82 on the Toronto Stock Exchange, marking a new 52-week high.

Shareholders are reacting to a presentation by new CP chief executive Hunter Harrison on Tuesday evening outlining his vision for the troubled railroad.

The most striking change will be a 23-per-cent reduction in the railway's 19,500-member workforce by 2016.

About 1,700 of the 4,500 cuts are expected to take place by year-end.

Much of the reduction is expected to come through attrition as older workers retire and aren't replaced.

Canadian Pacific management has yet to meet with the Teamsters Canada Rail Conference, which represents conductors, yardmen, locomotive engineers and railway traffic controllers, the union said in a release Wednesday.

"It is difficult for us to evaluate the scope of the decision," said TCRC president Doug Finnson. "We will wait to meet with management to find out the details, and will reserve comment until later."

In May, that group of Teamsters workers, known as running trades, walked off the job for nine days before Ottawa forced them back to work.

The stoppage took place just days after shareholders voted to oust then-CEO Fred Green after a bitter proxy contest launched by the railway's biggest shareholder, Pershing Square Capital Management.

But it was about a month before Harrison, Pershing Square's pick for Green's replacement, was formally appointed CEO.

"We have good relationships with most of our organizations. I can tell you that the Teamsters, from a running trades standpoint, is not my favourite group right now," Harrison said as he discussed his plans for CP with investors in New York on Wednesday.

"I wasn't here then, but right before my arrival, as far as I'm concerned, they kicked this company when it was down."

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.

* Required

In which story did you find the error? *
Please post the headline of the story or the title of the video with the error.
What was the error? *
Please post exactly what was wrong with the story.
What should we have written?
Please indicate your source for the correct information.
Who else should we interview to improve this story?
Please include any contact information you may have.
Can we contact you in the future for advice on stories about this topic?
Yes

No
First Name: *
Last Name: *
E–mail Address: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Phone: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Colour:
Are you blue? If you can see this, leave it blank and get some CSS support.
Enter the words that you see: * This is to prevent our forms from being filled out automatically.
You have failed to correctly identify the words in the box above. Please try again.

More FP News Top Story

Undock

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.