Canadian Pacific Railway Ltd. workers have told the company they may strike as soon as May 23, raising the prospect of fresh turmoil for the country’s second-largest railway days after its chief executive officer resigned under pressure from activist shareholder Bill Ackman.
The Teamsters Canada Rail Conference, representing 4,800 engineers, conductors and rail-traffic controllers, told Canadian Pacific a strike could come at 12:01 a.m. May 23 even as both sides meet with a federal mediator, the Calgary-based company said late yesterday by e-mail.
The threat of a strike comes after CEO Fred Green resigned hours before the company’s May 17 shareholder meeting after it became apparent that Ackman’s Pershing Square Capital Management LP wouldn’t back Green and other board members for re-election. Pershing, which became the company’s largest investor in October, had been pushing for an alternative to Green, who presided over a slide that left Canadian Pacific as the least-efficient of its North American peers.
Pensions are at the heart of the dispute between the company and its workers. CP said it needs to make changes to post-retirement benefits to bring them into line with its railway peers.
The company said it has made C$1.9 billion ($1.86 billion) of solvency-deficit contributions to its pension plan over the past three years. CP said its proposed changes would still leave workers with guaranteed pension payments that exceed what the union has already agreed to for the majority of its members at another major Canadian railway.
The Teamsters said in a statement on its website the same day that at issue are “work rules, fatigue management, and the pension plan, which the employer wants to cut by 40%.”
The railway said its offer is fair and it’s willing to enter binding arbitration with the union. Should a strike occur, Canadian Pacific said it will “proceed with a safe and structured shut down” of train operations across the country.