Canadian National Railway

:CN redirects here, as it's the most common usage of the abbreviation in Canada; for more uses, see CN (disambiguation).

Privatization

In 1992 a new management team led by ex-federal government bureaucrat, Paul Tellier, started preparing CN for privatization by emphasizing increased productivity, achieved largely through aggressive cuts to the company's bloated and inefficient management structure, as well as widescale layoffs in its workforce, and further abandonment or sale of branch lines. In 1993 and 1994 the company experimented with a rebranding exercise that saw the names CN, Grand Trunk Western, and Duluth, Winnipeg, and Pacific replaced under a collective CN North America moniker. During this time, CPR and CN entered into negotiations regarding a possible merger of the two companies. This was later rejected by the federal government, whereby CPR offered to purchase outright all of CN's lines from Ontario to Nova Scotia, while an unidentified U.S. railroad (rumoured to have been Burlington Northern Railroad) would purchase CN's lines in western Canada. This too was rejected. In 1995, the entire company including its U.S. subsidiaries reverted to using CN exclusively.

Related Topics:
1992 - Paul Tellier - Privatization - 1993 - 1994 - Burlington Northern Railroad - 1995

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The CN Commercialization Act was enacted into law on July 13, 1995 and by November 28, 1995, the federal government had completed an initial public offering (IPO) and transferred all of its shares to private investors. Two key prohibitions in this legislation include, 1) that no individual or corporate shareholder may own more than 15% of CN, and 2) that the company's headquarters must remain in Montreal, thus maintaining CN as a Canadian corporation.

Related Topics:
July 13 - 1995 - November 28 - Initial public offering - Montreal

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Purchasing Illinois Central

Following the successful IPO, CN has recorded impressive gains in its stock price. In 1998, during an era of mergers in the U.S. railway industry, CN purchased the Illinois Central Railroad (ICR), which connected the already existing lines from Vancouver, British Columbia to Halifax, Nova Scotia with a line running from Chicago, Illinois to New Orleans, Louisiana. This single purchase of ICR changed the entire corporate focus of CN from being an east-west uniting presence within Canada (sometimes to the detriment of logical business models), into a north-south NAFTA railway feeding Canadian raw material exports into the U.S. heartland and beyond to Mexico through a strategic alliance with Kansas City Southern Railway (KCSR).

Related Topics:
1998 - Illinois Central Railroad - Vancouver, British Columbia - Halifax, Nova Scotia - Chicago, Illinois - New Orleans, Louisiana - NAFTA - Kansas City Southern Railway

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Failed BNSF merger

In 1999, CN and Burlington Northern and Santa Fe Railway (BNSF), the second largest rail system in the U.S., announced their intent to merge, forming a new corporate entity North American Railways to be headquartered in Montreal to conform with the CN Commercialization Act of 1995. The merger announcement by CN's Paul Tellier and BNSF's Robert Krebs was greeted with skepticism by the U.S. government's Surface Transportation Board (STB), and protested by other major North American rail companies, namely CPR and Union Pacific Railroad (UP). Rail customers also denounced the proposed merger, following the confusion and poor service sustained in southeastern Texas in 1998 following UP's purchase of Southern Pacific Railroad (SP). In response to the rail industry, shippers, and political pressure, the STB placed an 15-month moratorium on all rail industry mergers, effectively scuttling CN-BNSF plans. Both companies dropped their merger applications and have never refiled.

Related Topics:
1999 - Burlington Northern and Santa Fe Railway - Montreal - 1995 - Paul Tellier - Robert Krebs - Surface Transportation Board - Union Pacific Railroad - Texas - 1998 - Southern Pacific Railroad

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Purchasing Wisconsin Central

After the STB moratorium expired, CN purchased Wisconsin Central (WC) in 2001, which allowed the company's rail network to completely encircle Lake Michigan and Lake Superior, permitting more efficient connections from Chicago to Western Canada. The deal also included Canadian WC subsidiary Algoma Central Railway (ACR), giving access to Sault Ste. Marie and Michigan's Upper Peninsula.

Related Topics:
Wisconsin Central - 2001 - Lake Michigan - Lake Superior - Western Canada - Algoma Central Railway - Sault Ste. Marie

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Purchasing BC Rail

On May 13, 2003 the provincial government of British Columbia announced that the provincial Crown corporation, BC Rail (BCR), would be sold with the winning bidder receiving BCR's surface operating assets (locomotives, cars, and service facilities). The provincial government is retaining ownership of the tracks and right-of-way. On November 25, 2003 it was announced that CN's bid of $1 billion (CAD) would be accepted over those of CP and several U.S. companies. The transaction was closed effective July 15, 2004. Many opponents – including CP Rail – accused the government and CN of rigging the bidding process, though this has been denied by the government. Also contested was the economic stimulus package that the government gave the cities along the BC Rail route – some saw it as a buyoff done in order to get the municipalities to cooperate with the lease, though government has asserted that the package was intended to promote economic development along the corridor.

Related Topics:
May 13 - 2003 - British Columbia - Crown corporation - BC Rail - November 25 - CP - July 15 - 2004

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Purchasing Great Lakes Transportation

CN also announced in October 2003 an agreement to purchase Great Lakes Transportation (GLT), a holding company owned by Blackstone Group for $380 million (USD). GLT was the owner of Bessemer & Lake Erie Railroad, Duluth, Missabe and Iron Range Railway, and the Pittsburgh & Conneaut Dock Company. The key instigator for the deal was the fact that since the Wisconsin Central purchase, CN was required to use Duluth, Missabe and Iron Range Railway trackage rights for a short 17 km "gap" that existed near Duluth, Minnesota on the route between Chicago and Winnipeg. In order to purchase this short section, CN was told by GLT that it would have to purchase the entire company. Also included in GLT's portfolio were 8 Great Lakes vessels for transporting bulk commodities such as coal and iron ore as well as various port facilities. Following Surface Transportation Board approval for the transaction, CN completed the purchase of GLT on May 10, 2004.

Related Topics:
October - 2003 - Great Lakes Transportation - Bessemer & Lake Erie Railroad - Duluth, Missabe and Iron Range Railway - Duluth, Minnesota - May 10 - 2004

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CN today

Since the company operates internationally in two different countries, CN apparently maintains some corporate distinction by having its U.S. lines grouped under Grand Trunk Corporation for legal purposes http://www.aar.org/PubCommon/Documents/AboutTheIndustry/RRProfile_GTW.pdf, however the entire company in both Canada and the U.S. operates under CN, as can be seen in its locomotive and rail car repainting programs.

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Since the ICR purchase in 1998 CN has been increasingly focused on running a "scheduled freight railroad/railway", meeting on-time performance with rail industry-leading consistency. This has resulted in improved shipper relations, as well as reduced the need for maintaining pools of surplus locomotives and freight cars. CN has also undertaken a rationalization of its existing track network by removing double track sections in some areas and extending passing sidings in other areas.

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CN is also a rail industry leader in the employment of radio-control (R/C) for switching locomotives in yards, to the detriment of employees since this results in reductions to the number of yard workers required. CN has frequently been touted in recent years within North American rail industry circles as being the most-improved railroad in terms of productivity and the lowering of its operating ratio, acknowledging the fact that the company is becoming increasingly profitable.

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Recent controversies

Controversy arose in Canadian political circles in 2003 following the company's decision to refer solely to its acronym "CN" and not "Canadian National," a move some interpret as being an attempt to distance the company from references to "Canada," particularly in the U.S. where Canada's decision to not participate in the 2003 invasion of Iraq was unpopular. Canada's Minister of Transport at the time called this policy move "obscene" http://www.canoe.com/CNEWS/Canada/2003/09/19/197416-cp.html after nationalists noted it could be argued the company is no longer Canadian, being primarily owned by American stockholders. The controversy is somewhat tempered by the fact that a majority of large corporations are being increasingly referred to by acronyms. Despite this, the company is still legally called the Canadian National Railway.

Related Topics:
2003 - 2003 invasion of Iraq - Nationalists

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In March, 2004 a strike by the Canadian Auto Workers union showed deep-rooted divisions between organized labour and the company's current management.

Related Topics:
March - 2004 - Strike - Canadian Auto Workers - Organized labour

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The residents of Wabamun Lake, in northwestern Alberta, staged a blockade of CN tracks in August 2005, when they were unsatisfied with CN's response to a fuel oil spill into the lake from the derailment of a freight train. It was resolved five hours later when CN officials met with the residents.

Related Topics:
Wabamun Lake - Alberta - August - 2005

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Corporate governance

Current members of the board of directors of the company are: Michael Armellino, A. Charles Baillie, Hugh Bolton, Purdy Crawford, J.V. Raymond Cyr, V. Maureen Darkes, Gordon Giffin, James Gray, E. Hunter Harrison, Edith Holiday, Denis Losier, Edward Lumley, David McLean (chairman), and Robert Pace.

Related Topics:
Board of directors - Michael Armellino - A. Charles Baillie - Hugh Bolton - Purdy Crawford - J.V. Raymond Cyr - V. Maureen Darkes - Gordon Giffin - James Gray - E. Hunter Harrison - Edith Holiday - Denis Losier - Edward Lumley - David McLean - Robert Pace

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