12 March 2009
CP Asks Employees to Help Get Books in Order
Canadian Pacific Railway Ltd. is asking employees to burn off
vacation days and also scrapping a system that allowed holiday time to be banked, part of renewed efforts to control costs amid a
slowdown in the railway industry.
Managers and other non-union workers in Canada hired before 1996 had been allowed to carry over their
vacation time, but CP chief executive officer Fred Green said he's leaving no stone unturned in an effort to strengthen the carrier's
balance sheet.
"Unused vacation is a liability for which the company maintains an accrual. This accrual is basically a financial reserve
representing past service vacation," Mr. Green said in an internal memo to roughly 3,000 non-union staff across
Canada, including those located at the company's Calgary head office.
CP is seeking to cut costs as the recession erodes cargo deliveries across the North American rail sector.
In the first two months of this year, CP and Canadian National Railway Co. have seen their carload traffic fall an average of 18.4
percent.
Canadian Pacific Railway North American carriers, including major firms in the United States and Mexico, have experienced an average
drop of 16.2 percent in freight volumes.
CP said it's converting fully to a use-it-or-lose-it system, requiring non-union employees to take their
full 2009 vacation entitlements, as well as making it mandatory to drain at least two weeks of accumulated holidays from time bank
each year.
"You may be required to take some of your annual vacations at times that are not necessarily the most convenient for you,"
Mr. Green cautioned. "With the approval of your manager, consider short work weeks to use up annual vacations or take advantage
of the traditional down times in your department and take time off then."
In his memo, Mr. Green said the move to reduce vacation time on the books would chop payroll expenses and help meet the railway's
performance targets.
During a transportation webcast Wednesday from New York, he said CP remains committed to its cost-cutting campaign titled
Execution Excellence for Efficiency, or E3, featuring initiatives such as running longer trains and renegotiating fuel contracts with
freight customers.
North American carriers, including CP and Montreal-based CN, have been parking locomotives and temporarily laying off
workers during the freight slowdown.
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