CP, Unions Snipe at CN-KCS Merger Plans

Canadian Pacific has continued to snipe at its rival Canadian National’s plans for merging with Kansas City Southern.

It’s latest salvo has been to call CN’s proposal to sell the KCS route between New Orleans and Baton Rouge, Louisiana, as “inadequate” and failing to eliminate anti-competitive issues.

“CN’s commitment to divest this 70-mile line is clear recognition by CN that it and KCS have always been head-to-head competitors, contrary to CN’s repeated claims that the combination was ‘end-to-end,’ ” CP said in a statement. “However, CN’s commitment does not come close to solving the anti-competitive problems inherent in the proposed CN/KCS transaction.”

CP had sought to acquire KCS for itself but CN made a counteroffer that the KCS board of directors decided to accept instead.

Also taking aim this week at the CN-KCS merger were four railroad labor unions, which filed comments with the U.S. Surface Transportation Board.

The unions expressed concern over the “nonproductive, and potentially destructive, competition” between CN and CP, and the way the two are pursuing a KCS merger.

“As CN and CP compete for KCS they may negate any potential transportation benefits of a consolidation with KCS, and there is a likelihood that innocent bystanders — employees of CP, CN and KCS, and shippers which use those carriers — will pay a price for this exercise in one-upmanship,” the unions said. “A bidding war has consequences.”

The four unions are the Brotherhood of Maintenance of Way Employes Division-IBT; Brotherhood of Railroad Signalmen; International Association of Sheet Metal, Air, Rail and Transportation Workers-Mechanical Division; and National Conference of Firemen and Oilers.

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