Issue Date: February 26, 2007
Rail Strike Hits Canadian Firms
A STRIKE by members of the United Transportation Union against Canadian National Railway is starting to hurt the bottom line of Canadian chemical producers. Shippers are hoping for a quick end to the strike as the Canadian government gets involved.
The strike, over wages and working conditions, began on Feb. 10 and has forced the railroad to operate using only management personnel. It is causing consternation in the Canadian chemical industry and has prompted chemical companies and organizations to call for government action.
"Rail service is essential to the Canadian economy, and the strike is beginning to impact our customers and our business," says Chris Pappas, chief operating officer of Nova Chemicals. "Since the two parties appear to be at an impasse, we believe it is time for the government to intervene on behalf of Canadian business."
To meet customer demand, Nova has implemented contingency plans developed in anticipation of the strike. It has reduced production at some of its Canadian facilities as a precaution. Nova says the financial impact could be significant if the strike is protracted and the company is required to substantially reduce production.
In a similar vein, Jeff Johnston, president of Dow Canada, says, "This strike is already having a severe impact on our ability to ship products, which is affecting our customers."
In a letter to Canadian Minister of Labor Jean-Pierre Blackburn, Richard Paton, who is CEO of the Canadian Chemical Producers Association, notes that even the threat of a strike causes disruption as buyers move to suppliers that will not be affected by the work stoppage. "Because almost two-thirds of our production is exported," he writes, "our global competitors in other jurisdictions are keenly aware of transportation issues and are prepared to take full advantage in supplying our customers from more dependable sources."
In response to the strike, the government has appointed a mediator, who has been meeting with union and company representatives. And Blackburn has said he will introduce legislation to end the work stoppage. The union says it will go back to work if the legislation is passed.
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