CN Rail President and CEO Jean-Jacques Ruest speaks during a business luncheon in Montreal on April 25, 2019. THE CANADIAN PRESS/Graham Hughes

More CN layoffs only if business slows dramatically during second wave, says CEO

More CN layoffs only if business slows dramatically during second wave, says CEO

CN Rail may only have to consider another painful round of layoffs if COVID-19’s second wave causes shipping volumes to drop dramatically again, its chief executive said Wednesday.

“If the economy slows down we might have to have layoffs,” Jean-Jacques Ruest said a day after marking the 25th anniversary of the government’s privatization of Canadian National.

Canada’s largest railway is recovering from a big drop in volume in the second quarter that forced it to cut staffing and withdraw its full-year guidance. It has since recalled some of the thousands of employees who were laid off.

Ruest said CN s in a much better position to keep its employees safe than it was at the onset of the pandemic, when it had to make some of the disinfectant and wipes itself.

“Now we have everything we need. I think right now we have a process, and we can last this whole thing for as long as it needs to be,” Ruest said.

Ruest said there are probably more employees on staff than is required because the company needs to have people to cover for those who are infected or are quarantining themselves.

The type of business CN moves is also vastly different than before the coronavirus struck in March and prompted lockdowns, he said

He said crude-by-rail fell dramatically and may not recover, while grain, consumer freight, intermodal and its port business are booming as people spend more time at home.

“People are not travelling, therefore, the energy sector is not going to come back. People are still consuming though, so the container business will remain very strong,” Ruest said.

CN Rail is a vastly different company than it was when it changed from a Crown corporation 25 years ago to a private-sector company, said Ruest, who joined the company about six months after the railway listed its shares on publicly traded stock markets.

A $1,000 investment of shares in 1995 would be worth $63,000 today. Its market capitalization has surged to $100 billion from just $2.2 billion and it has attracted pension and hedge funds, retail investors and Bill Gates, whose investment firm Cascade Investment LLC is the largest investor with a stake of more than 17 per cent.

The railway has had several influential leaders, from Paul Tellier to Hunter Harrison, and has grown through various acquisitions, including Illinois Central in 1998 for US$2.4 billion in cash and shares.

None of those accomplishments could have happened as a Crown corporation because government moves too slowly, Ruest said.

“They really need to be driven by business people and entrepreneurs, people who are willing to take calculated risks but can also execute behind that risk,” he said.

Ruest also said he’s not worried about U.S. president-elect Joe Biden’s campaign promise to withdraw the permit for the Keystone XL pipeline and to require more U.S.-made purchases.

“Infrastructure projects are great for the rail industry. So whether there is a Buy America or not, if there is major infrastructure projects that will create demand for a lot of the stuff that we move,” Ruest said.

This report by The Canadian Press was first published Nov. 18, 2020.

Companies in this story: (TSX:CNR)

Ross Marowits, The Canadian Press


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Red Deer RCMP say a 30-year-old man faces sexual charges against a teen. (File photo by Advocate staff)
Innisfail RCMP arrest man following ‘lengthy pursuit’

Innisfail RCMP say a “lengthy pursuit” through a rural area ended with… Continue reading

Red Deer South MLA Jason Stephan speaks in the Alberta Legislature on Wednesday in this image from his Facebook page.
Red Deer MLA Jason Stephan sounds off on socialism in anti-lockdown speech

Red Deer-South MLA Jason Stephan has applauded his government’s COVID-19 response, saying… Continue reading

(Photo by Paul Cowley/ Advocate Staff)
Mask bylaws not popular in rural areas

Red Deer and Blackfalds bylaws requiring masks in public places kick in on Monday

A GoFundMe campaign to support a Stettler couple following a fire has raised more than $3,000. (Contributed photo)
Family pet dies in Stettler fire

GoFundMe page has raised more than $3K so far

Outgoing Bank of Canada Governor David Dodge answers questions during a interview at the Bank of Canada headquarters in Ottawa, Wednesday, Dec. 12, 2007. Former Bank of Canada governor David Dodge says Canada must shift its attention to investing for economic growth as the world recovers from the COVID-19 pandemic downturn over the next few years. THE CANADIAN PRESS/Sean Kilpatrick
Growth investing needed as pandemic wanes, says former BoC governor David Dodge

Growth investing needed as pandemic wanes, says former BoC governor David Dodge

Deputy Prime Minister and Minister of Finance Chrystia Freeland responds to a question during Question Period in the House of Commons Monday November 23, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Liberals face pressure for concrete ideas, economic plan in spending update

Liberals face pressure for concrete ideas, economic plan in spending update

Bay Street in Canada's financial district is shown in Toronto on Wednesday, March 18, 2020. THE CANADIAN PRESS/Nathan Denette
S&P/TSX composite index rises as loonie jumps above 77 cents US

S&P/TSX composite index rises as loonie jumps above 77 cents US

Rimbey Christian School students experience the joy of giving

Grades three and four students raised $2,000 for Somalian children

Opinion: We’re weary of the wait for COVID vaccine

It’s official: vaccines are the new toilet paper. Justin Trudeau appears to… Continue reading

Actor Johnny Flynn portrays David Bowie in the film "Stardust" in this undated handout photo. THE CANADIAN PRESS/HO, Elevation Pictures *MANDATORY CREDIT*
‘Stardust’ is a Bowie pic without his music but that was always the plan: director

TORONTO — Gabriel Range’s controversial David Bowie drama “Stardust” has angered fans… Continue reading

Canadian figure skating champions Tessa Virtue and Scott Moir come to Penticton Oct. 6 with the Rock the Rink tour. This will be the pair’s last tour as they have announced they are retiring from the world of competitive figure skating. (Contributed)
Ice-dancers Moir and Virtue among 114 Order of Canada inductees

OTTAWA — Champion ice-dancers Scott Moir and Tessa Virtue are among 114… Continue reading

Mahomes vs. Brady spices up Thanksgiving holiday week

Mahomes vs. Brady spices up Thanksgiving holiday week

Most Read