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Rail News Home Canadian National Railway - CN


Rail News: Canadian National Railway - CN

STB anoints CN/WC merger


While the railroad alliance trend marches on, there's one proposed merger, albeit "minor," that now has Surface Transportation Board's blessing.

The board Sept. 7 approved the Canadian National Railway Co./Wisconsin Central Transportation Corp. combination, noting that the merger wouldn't harm competition.

However, STB did impose certain conditions requiring CN/WC to: keep all merger-affected gateways open on commercially-reasonable terms; waive defenses the railroads otherwise might have under STB's bottleneck rates policy; report to the board for one year concerning the progess of integrating operations; comply with the railroads' proposed Safety Integration Plan; participate and fully cooperate with Federal Railroad Administration and STB until FRA advises that the merger has been safely implemented; and adhere to New York Dock labor protection conditions.

"Shippers will benefit from extended market reach via new, single-line services, CN's promise to maintain gateways, greater operating efficiencies and assurances that service on the combined CN/WC network will be as good, or better than, what existed before the merger," said Paul Tellier, CN president and chief executive officer, in a prepared statement.

STB decided not to impose terms of a settlement agreement between Great Lakes Transportation LLC (GLT) and CN, under which taconite traffic originating at mines served by a GLT affiliate would move via other GLT affiliates to destinations via rail-water routes incorporating the Great Lakes.

The board determined that there was no merger-related harm that the agreement needed to address; other remedies under law would be available if CN/WC were to engage in below-cost pricing for the traffic; and other parties raised sufficient doubts regarding the anti-competitive nature of certain agreement elements.

STB also ruled that the board would remain open to any below-cost pricing complaints should they arise, and that GLT and CN could enter into a private agreement without board approval.

CN and WC officials expect to close the transaction on or about Oct. 9. Immediately after the merger's complete, CN plans to begin a step-by-step integration of the two companies' North American operations.

WC's North American network would become the Wisconsin Central Division — CN's sixth operating division.
To head the division, CN Sept. 7 named Gordon Trafton vice president. Trafton previously served as CN's vice president, operations integration.

"We're determined to achieve a flawless integration of CN and WC, just as we did in the CN/Illinois Central merger," said Tellier.

Contact Progressive Railroading editorial staff.

More News from 9/7/2001