Bill Brehl.

6 December 2011

The Future of CP Rail

Brothers and Sisters,
 
All of you have been seeing the media reports concerning Pershing Square Capital Management, led by hedge fund activist, Bill Ackman and their acquisition of $1.2 billion worth of stock in CP. This gave them 12.4 percent and made them CP's largest shareholder.
 
Last week (according to an article in the Globe and Mail), Pershing filed with the U.S Securities and Exchange Commission, and stated that they are seeking changes to CP's business and operations, as well as changes in "...its executive management and its board composition".
 
It's a pretty safe bet to assume that Bill Ackman will want a seat on CP's board of directors. As its largest shareholder, he probably deserves one. His talent for improving the performance of the companies that he invests in, has been shown in dozens of cases.
 
But how will this affect us, as labour?
 
We are the backbone of CP. Regardless of Fred Green's erroneous assertions at the now famous Bear Stearns address of 2007, the railway cannot run properly without us. In fact at the time that he made his ill-advised statements, many people (including myself) made the assertion that CP would run a lot better without him than it would without us. By next year, we may be able to see this fact proven.
 
All of us who have spent any amount of time tied to the railway realize that especially during the last five years there has been a problem with mismanagement at CP.
 
This perception has been built by a number of issues including, but not limited to:
 
The recent changes in TR&E, the arrogance at bargaining, the "overtime ban", the increase of costly contractors, the negative approach to safe operations, labour relations, the "top heavy" management structure which just keeps growing, the inconsistency in policy and regulation compliance, the sale of usable property (Windsor station, Detroit tunnel) and the acquisition of new drains on operating capital (the DM&E), etc. etc.
 
You cannot run a railway, or any company for that matter, fueled by ego, arrogance, and rancour. The current regime at CP has ostracised the unions and in a predominantly unionized workforce, this could be a fatal mistake. The labour force as stated earlier, is the backbone of the company.
 
Will Pershing recognize this or will they institute another failing regime to replace the current one?
 
That is impossible to say presently, all the facts aren't in. But if they do appoint the proper people to run CP, we have a chance at improvement. And we all know that there are a lot of talented people at CP, who are being limited in what they can accomplish by the carte blanche policies instituted from on high. People who have been able to work with labour, when the upper management allowed them to. People who were able to increase production without loss of safety or morale, when upper management allowed them to.
 
But don't kid yourself, its unlikely that a new CEO will be "one helluva nice guy". There are not too many stories out there of the kindly, old railway president. But we can hope that they will at least be competent. That they will understand the worth of their employees and that morale and company loyalty are just as important as the physical skills we possess. And if the new upper management understand the concept of simple mathematics, they will realize that labour has been cut far too much already. It is time to build the workforce, trim "dead wood" management, and put CP back in the pack of properly performing railways.
 
The battle for the helm of CP's destiny is just beginning. The future will be interesting, to say the least. The long term viability and improved performance of CP is definitely in our memberships' best interests because we're in this for the long haul and we want the company to be, as well.
 
Stay safe, stay strong, stay united.
 
Bill Brehl - President TCRCMWED.