Work Stoppage Disrupts U.S., Canadian Automakers’ Operations

OTTAWA – The Canadian auto sector is calling for improved labor relations in the country’s rail sector, after facing significant disruption caused by the ongoing work stoppage of 10,000 rail workers on Canada’s two railroad networks.

While the Canadian government halted a lockout Thursday through an order requiring binding arbitration on the Teamsters Canada Rail Conference (TCRC) and the Canadian National (CN) and Canadian Pacific Kansas City (CPKC) railroads, the Teamsters have challenged the order as regards CPKC, and are, says spokesperson Marc-André Gauthier, now “technically on strike, no trains are running.” 

The union is considering doing the same with CN services and may give the company a 72-hour strike notice: “We're not happy with the government's decision. It's anti-democratic to allow bureaucrats to decide what's in our contract,” Gauthier tells WardsAuto.   

The companies’ railroads stretch across the U.S. (and into Mexico for CPKC) and even if the union had accepted the arbitration order, rail services on both networks were expected to take days to resume. While the work stoppage has not directly affected these companies’ domestic American rail services, deliveries to and from Canada have been halted. https://cnebusiness.geomapguide.ca/ and https://www.cpkcr.com/en/our-advantage/connecting-a-continent 

Matt Blunt, president of the American Automotive Policy Council (AAPC), tells WardsAuto any prolonged stoppage "would severely disrupt the North American automotive supply chain, which is critical to the U.S. auto sector, its domestic manufacturing supply chain and the hundreds of thousands of people employed in the industry.

“AAPC has been in contact with the Biden Administration on behalf of our member companies regarding the potential impact on the U.S. auto industry and its employees.”     

David Adams, CEO, Global Automakers of Canada, says of his 22 non-Detroit Three members, which include Toyota, Honda, Nissan and more: “Virtually all the finished vehicles are shipped by rail. Most production from Canadian facilities is going down to the USA – 85% by rail.” 

Noting a “series of strikes” in Canada’s transportation sector over the past three years, Adams says: “We have a real labor relations problem in our transportation service in Canada. Given we're a nation relying on trade, that’s not an enviable position. The country is being held hostage.” 

He says Canadian rail stoppages in the past 20 years have run from two to 10 days, but "we have never had a situation where both railways are out at the same time.” So, all Canadian businesses are pressuring the government, companies and unions to find a resolution, Adams says. 

That may still come with binding arbitration, with CN swiftly announcing an end of its lockout and the Teamsters initially announcing an end to picket lines. CPKC also ended its lockout, but the Teamsters instead went on strike and were still challenging the validity of the government order today. 

Announcing the referral of the CN and CPKC disputes to the Canada Industrial Relations Board (CIRB), speaking in Ottawa Thursday, federal Labor Minister Steve MacKinnon says: “We will be examining why we experience repeated conflict in the railway sector and the conditions that led to the parallel works stoppage...We want things to be predictable and reliable. That's why we are going to examine why we have these threats.” https://www.cpac.ca/headline-politics/episode/railway-dispute-govt-orders-binding-arbitration-resumption-of-operations?id=508eadd5-cb9b-411f-90e3-c60ff081798d 

The government acted after a year of collective bargaining negotiations had failed to reach resolution, MacKinnon saying talks had reached an impasse.  

His binding arbitration order under Section 107 of the Canadian labor code told the parties to get back to work and extended the existing contracts until arbitration was completed and a new contract was in place. 

Adams warns: “This can’t go on for any length of time. It doesn’t bode well for our international reputation. It’s not practical to deliver vehicles by road. Dealers’ inventory levels will be drawn down. It will be tough for them to stay in business if this keeps on.” 

As for the automakers, he says plants making 2,000 to 3,000 vehicles a day would “run out of acreage quickly” to store models: "Nobody wants to shut a production line, but if you have no space to put the vehicles that becomes a problem.” 

He says parts and components were mostly shipped to Canadian OEMs by road, except some small supplies sent by rail from the west coast to manufacturing hubs in Ontario. 

On Thursday, Teamsters spokesperson Christopher Monette accused the companies of stopping “their own operations to break the union and pressure workers to accept these concessions.” He tells WardsAuto: “They have acted without any regard for the impact on the automotive sector, farmers and small businesses. Our workers want to reach a negotiated settlement.”  

CPKC, meanwhile, says: “Throughout nearly a year of negotiations, CPKC has remained committed to doing its part to avoid this work stoppage,” adding, “The TCRC leadership continues to make unrealistic demands that would fundamentally impair the railway’s ability to serve our customers.”  CN says that by combining duty and rest periods, paid sick days, personal leave days and existing rest and vacation, conductors and locomotive engineers currently work approximately 160 days a year, with conductors earning an average Canadian dollars C$121,000 ($90,000), and locomotive engineers C$150,000 ($110,000), not including pension and medical benefits.