Canadian National Inks Tentative Labor Deal: What Lies Ahead?

Canadian National Railway Company (NYSE:CNI) received encouraging news on the labor front when it inked a tentative collective deal with United Steelworkers (USW) — a trade union representing workers in Canada, the Caribbean and the United States.

As far as Canadian National is concerned, the union (USW Local 2004) covers roughly 3,000 track and bridge workers at this Canada-based railroad operator. However, details of this provisional agreement with USW were not disclosed. The current collective agreement is valid till Dec 31, 2018.

Markedly, the provisional deal does not come into effect immediately. In fact, tentative agreements do not necessarily mean that the deal will be operational. The provisional deal inked by Canadian National will be voted upon by union members shortly.

It will be effective only if the voting result is favorable. The company would be hoping for favorable outcome as satisfied labor groups generally imply greater operational efficiency.

Earlier this month, this Zacks Rank #3 (Hold) company inked another tentative collective deal with Unifor Local 100 — the union covering approximately 2,100 locomotive and freight-car mechanics, electricians and apprentices, who work at Canadian National across Canada. This tentative deal will also undergo the ratification procedure before becoming effective.

Labor-related updates apart, Canadian National was in the news on the safety front recently. In line with its objective to promote safety, the company announced the achievement of its benchmarks pertaining to the implementation of the positive train control (PTC) plan for 2018. Additionally, last month, the railroad applied for a two-year extension to complete deployment and interoperability.

Stocks to Consider

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