In this May 2012 photo, a Canadian Pacific train sits idle at the CP yard in Brandon.
A major restructuring underway at Canadian Pacific Railway has resulted in deep layoffs and a lower volume of trains travelling through Brandon, according to two union representatives.
Ed Holleman, local chairman for the Teamsters Canada Rail Conference (TCRC), said the company’s attempt to streamline its operations since CEO Hunter Harrison took over in June 2012 has had devastating consequences in several areas.
While train traffic is up slightly right now due to the agricultural industry, Holleman estimates numbers are down between 30 to 40 per cent overall in Brandon.
"They have redirected so much traffic through the (United) States," he said. "It’s like Manitoba is getting cut right out of all of the traffic and we have a record number of guys laid off."
In total, 36 conductors have received their walking papers from the company, with another 15 to 20 laid off in Minnedosa.
There are presently 13 to 15 train crews working in Brandon, compared to 21 this time last year.
The layoffs were deemed necessary by Harrison to increase the company’s operating ratio.
Operating ratio is the company’s operating expenses as a percentage of revenue, meaning the lower the number the more efficient the company.
In 2011, according to the United Transportation Union, CP posted one of the worst operating ratios of all the major railroads at 81.3 per cent. In comparison, Canadian National Railway posted a ratio of 63.5 per cent — meaning for every $100 of revenue, CN generated nearly double the amount of profit than CP —$36.5 compared to $19.7.
Holleman said the company was "fat" with middle managers, something that needed to be addressed, but that cutting front-line employees has hurt service.
"I believe (Harrison) cut back so deep to increase that operating ratio that the business has gone down but the stock has gone up," said Holleman, who has worked for CP for the past 33 years.
"They want to do more with less and they’ve taken it to the extreme. I’m hoping we’ve hit bottom and we have nowhere to go but up now."
Through the second quarter of 2013, CP’s operating ratio dipped to 71.9 per cent as the company has become more efficient. As a result, the company’s stock price has soared to more than $130 — a 44 per cent increase over a year ago and a 150 per cent increase over two years.
Holleman said much of that gain is "smoke and mirrors."
In some cases across the country, including Brandon, managers are running trains.
"It’s tough when you see guys laid off and there are managers driving trains. There’s just no need for it," Holleman said, adding that at times the company has struggled to find enough employees to cover the number of trains running through the city.
The TCRC is taking legal action against the practice, claiming the use of management to operate trains is intended to illegally intimidate union members.
The tactics, according to TCRC vice-president Doug Finnson, have been to the benefit of CP’s competitors as qualified, young employees have left to work for other local or national rail contractors.
"A lot of our young guys are leaving and what is going to happen is CP is going to be chronically short quality employees."
Grievances filed by the TCRC on behalf of Brandon and Minnedosa union members have increased recently.
The increase is in part to an "American management style" implemented by Harrison, Finnson said.
"The culture of fear that he cultivated at CN is what he is trying to do at CP," he said referencing Harrison’s two decades with Canadian National Railway.
"He’s trying to overload the arbitration system so that in the eyes of the members the union become ineffective. He wants to break the union or significantly bend it."
The Brandon Sun attempted to contact a CP official, but no one was available by press time.
Republished from the Brandon Sun print edition October 18, 2013