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11/21/2003



Rail News: M&A

BC Rail union: CN deal would benefit Class I's coffers but place jobs in peril


If British Columbia sells BC Rail Ltd. to Canadian National Railway Co. – as rumored but not confirmed by the provincial government — the deal would be worth more than $1 billion to the Class I and result in "major job losses," according to a CIBC World Markets/government document released by Council of Trade Unions on BC Rail Nov. 20.

Prepared in May, the confidential document shows the sale would provide CN "tax pool" benefits worth $857 million and a pension fund surplus of $151 million, as well as the value of the 1,400-mile regional’s rolling stock and other assets, the union said.

The document also states that a purchaser "should be able to significantly reduce costs by combining BC Rail’s operations and maintenance functions with its own and eliminating duplicative management, administrative and support areas."

"Communities and city councils on the BC Rail line are opposed to the
sale, hundreds of workers will lose their jobs, and now even three of the four bidders are complaining that the whole process was unfair and CN was favored from the start," said union Chairman Bob Sharpe in a prepared statement. "[The] government is prepared to throw BC Rail away for a fraction of its true value, unless the people of this province stop it."



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