Special Report - Canada: BC Rail lockout

SPECIAL REPORT: BC Rail lockout

CANADA: Stakes rise on second day of BC Rail lockout

OTTAWA -- Freight operations at BC Rail Ltd., which carries Canadian forest products to the United States and coal for Japan, were shut down for a second day on Tuesday as the company locked out unionized workers in an escalating labor dispute, the Journal of Commerce reported.

The company shut down indefinitely on Monday afternoon after the Joint Council of Trade Unions, a group of seven unions representing 1,600 workers, issued a strike notice for Friday.

The British Columbia Labor Relations Board stepped in after the lockout began and scheduled contract negotiations for Tuesday. Bill Tieleman, a spokesman for the unions, said he didn't expect progress any time soon.

Tieleman said the unions had offered, through the Labor Relations Board, to lift their strike notice for 30 days and resume bargaining if BC Rail would end the lockout.

The railroad "rejected that," he said.

The unionized workers have been working without a contract for two years.

While the 975-mile freight and passenger railway is shut down, shippers, mainly of forest products, coal and some mineral concentrates, must find other alternatives for transporting their purchases, said Alan Dever, a BC Rail spokesman.

Those other alternatives would essentially be trucks, a primary competitor to BC Rail, that could carry goods to the Port of Vancouver, across the U.S. border or to points along Canadian Pacific or Canadian National railways.

BC Rail, which is owned by the government of British Columbia, serves the northern and interior parts of the province. About 50% of its business is comprised of lumber and other forest products to the United States and Asia.

The company has suffered as a slump in exports to both markets has forced several sawmills to close.

Tieleman said BC Rail's lockout was an overreaction to the strike notice. The Joint Council of Trade Unions had pledged that no freight service would have been affected by a strike. Instead, it was targeting BC Rail's US$340-a-couple Pacific Starlight Millennium Train ride on New Year's Eve and its holiday Royal Hudson passenger service.

Dever dismissed the notion that the unions would not strike the freight services.

"It was a strike notice against BC Rail, not a portion of it," he said. "We can't presume to know ultimately what the unions are going to do with that strike notice. We didn't want our assets stranded."

BC Rail in 15 months of fruitless negotiations has tried to "make productivity improvements and cut our costs," Dever said, refusing to give details.

Tieleman said the company sought several changes from previous agreements, including: a 20% cut in unionized payroll; a two-tier wage structure in which new workers would be paid less for the same work than longer-term workers; longer hours for train crews; and other changes to the contract, which expired Dec. 31, 1997.

The company a year ago rejected a union offer of no retroactive wage increases for the two years workers have been without a contract and 2% for the third year, beginning next week.

BC Rail had consolidated net income of 26.5 million Canadian dollars (US$18.2 million) in 1998, down 34% from a year earlier.

CANADA: BC Rail labor dispute enters second day

VANCOUVER -- Representatives of BC Rail Ltd. and its unions met with a labor mediator Tuesday as the labor dispute that has idled Canada's third largest railway entered its second day, Reuters reported.

The railway owned by the province of British Columbia locked out its more than 1,500 union workers and idled its freight and passenger service Monday in a dispute over work rules and wages.

BC Rail spokesman Alan Dever said the company hoped the talks with a mediator from the Labor Relations Board would kickstart the negotiations.

"I think any time we talk is better than not talking,'' Dever told CKNW radio in Vancouver.

The railroad authorized a lockout after the unions on Friday issued a 72-hour strike notice. The unions had said they had planned only minor job actions, but to do that they legally had to issue the warning of a full strike potential.

The union Monday offered to suspend the strike notice for 30 days if the railway lifted the lockout.

BC Rail operates 1,446 miles (2,314 km) of track in British Columbia with a main line that runs from Vancouver to Fort Nelson. It had net income of C$26.5 million ($18.1 million) on revenues of C$417.6 million ($286 million) in 1998, according to its annual report.

The railroad has demanded work rule changes it said will increase productivity and cut labor costs to offset economic problems caused by a decline in rates and shipments of its core business of timber products and coal.

The unions, which have been working without a contract for two years, argue the proposed rule changes will eliminate jobs and create safety problems.

CANADA: Industries warn of layoffs as talks begin on BC Rail

VANCOUVER -- BC Rail and its unions have begun mediated talks that could see Canada's third-largest freight railway back on track after it was shut down this week by a lockout of its 1,600 unionized workers, the Vancouver Sun reported today.

On Tuesday, mediator Irene Holden spent hours shuttling between the parties, who occupied separate rooms at the downtown offices of the provincial Labour Relations Board.

"We're going to keep at it as long as we can," Holden said late Tuesday. After about four hours of talks, senior officials from the Crown corporation were called to join the negotiations.

Monday's lockout has shut down BC Rail, denying communities throughout the north of the province a crucial option for moving materials such as lumber and coal to southern markets.

BC Rail has defended the move as a necessity to get the jump on a strike notice filed by the Council of Trade Unions of BC Rail, representing seven rail unions.

Northern mayors and industry leaders have warned of layoffs and shutdowns if they cannot move commodities south along BC Rail's 1,573-kilometre main line.

The Teck Corp, which runs two coal mines in the tiny northern community of Tumbler Ridge, plans to store coal for now. "We're hoping there is a resolution quickly," Mike Lipkewich, senior operations vice-president, said Tuesday.

B.C.'s forest industry isn't ruling out a tough campaign to pressure for an end to the dispute, which is bad news for scores of sawmills and other operations. About half of BC Rail's revenue comes from forestry commodity shipments.

Any such campaign would likely echo the industry's move earlier this year to end a costly lockout at B.C. ports.

"If we find ourselves in a position at the end of the week where there's a lockout on the rail, we absolutely would consider more pressure tactics," said Ron Macdonald, president of the Council of Forest Industries, representing 114 member companies.

Last month, BC Rail's seven unions voted 84 per cent in favour of job action in a strike vote. The union has said that it is concerned about company plans to cut 20 per cent of the unionized workforce. BC Rail also wants to enact measures to increase productivity and efficiency.

The lockout has forced the cancellation of several seasonal train trips, including a New Year's Eve run from North Vancouver to Porteau Cove. These measures are said to affect more than 1,000 passengers, who are being compensated with vouchers and refunds.