CN to TCI: We’ve Had Enough of Your ‘Chest Beating,’ ‘Empty Posturing’ and ‘Obvious Conflict of Interest’

The battle for control of CN’s boardroom and C Suite has heated up, morphing from light artillery to nuclear-tipped ballistic missiles. On Oct. 1—the day after Canada’s first National Day for Truth and Reconciliation—CN issued a searing statement accusing TCI Fund Management of, in simple language, lying through its teeth in its quest to chew up and spit out the current management and board. The rhetoric flying back and forth mimics the histrionics between CSX and Norfolk Southern when both railroads were headquartered in Virginia—observers quipping how the two were figuratively in hand grenade throwing range of each other, especially during their battle for control of Conrail.

CN Issues 2021-22 Winter Plan

CN has published “2021-22 Winter Plan—All in Together,” which serves as a framework for ensuring the Class I railroad meets customer and stakeholder needs.

CN to Serve Two New G3 Grain Elevators

G3 will begin construction later this year on two new high-efficiency grain elevators in Western Canada, to be served by CN.

CN, Under Siege from TCI, ‘Redefining.’ Will it Work?

A few days after throwing in the towel on its attempted merger with Kansas City Southern, and facing a board and management reorganization forced by activist investor and “beneficial owner” TCI Fund Management Ltd., CN on Sept. 17 announced its “Full Speed Ahead – Redefining Railroading” initiative, which it describes as an “ambitious value creation plan” consisting of, for full-year 2022, $5 billion in stock buybacks (a previously authorized C$1.1 billion of it to be completed by the end of January 2022), a decrease in capital investment to approximately 17% of revenues, C$700 million of additional, incremental operating income, a 57% operating ratio, and elimination of more than 1,000 jobs, 400 of them from operating crafts.

Commentary

Stop and Read the Documents

Well, this one’s on the STB. What to do in the face of the STB’s decision about the voting trust sought by CN in which CN would have gained control of the Kansas City Southern? That avenue has been foreclosed by the Board’s recent decision to reject the voting trust.

CN: TCI House Cleaning Under Way

The fallout from CN’s Surface Transportation Board-forced scuttling of its attempt to merge with Kansas City Southern grew from shrapnel to a ground-zero blast the day after Canadian Pacific and KCS rekindled

Commentary

Back to Their Future: CP and KCS

Get used to the acronym “CPKC,” which stands for Canadian Pacific Kansas City, the name of the Class I railroad that will begin operations sometime within the next 18 to 24 months, provided the Surface Transportation Board approves—as many industry observers and analysts believe it will—the merger of the Canadian Pacific and the Kansas City Southern. The two railroads have circled back to pretty much the original merger agreement they announced on March 21, 2021, one month before CN began its attempt to wrest the deal away from CP with a higher bid.

Commentary

The Board Pieces Clearly Favored Canadian Pacific

RAILWAY AGE, FINANCIAL EDGE, SEPTEMBER 2021 ISSUE: For investors, industry watchers and rail consumers, August was either the most interesting or frustrating month to date in the reality dating show, “I Want to Buy a Class I Railroad.”

CN: Mandatory COVID-19 Vaccinations for Canadian Employees

All CN employees in Canada are required to be vaccinated against COVID-19 as of Nov. 1, the Class I railroad reported on Sept. 8.

STB: Five Class I’s Revenue Adequate for 2020

The Surface Transportation Board (STB) has found five of the seven U.S. Class I railroads to be revenue adequate for 2020: BNSF, CSX, Kansas City Southern, Soo Line (the U.S. affiliate of Canadian Pacific) and Union Pacific.

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