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On Friday, CN announced it has budgeted $1.75 billion (in Canadian dollars) for capital spending in 2012. The budget will enable the Class I to upgrade its network and improve customer service, as well as help support growth and productivity initiatives, CN officials said in a prepared statement.

More than $1 billion will be targeted at track infrastructure work to enhance productivity and fluidity, including the replacement of rail, ties and other track materials, and bridge improvements. The budget also includes funds for initiatives such as rail-line and yard improvements for the Elgin, Joliet and Eastern Railway property CN acquired in 2009; extended sidings along the Edmonton-Prince Rupert, British Columbia, corridor; and longer passing tracks in northern Ontario.

In addition, the budget allocates $500 million for growth-related opportunities and to acquire information technology, and $150 million for equipment spending, including the acquisition of new freight cars and locomotive upgrades.

“We are making major strides in improving all customer service touch points, delivering innovative products and achieving end-to-end supply chain collaboration while continually improving productivity. CN's capital spending is critical to running a safe, fluid and productive network, and to attaining our growth and service objectives,” said CN President and Chief Executive Officer Claude Mongeau.

Meanwhile, Norfolk Southern Corp. announced it earned the top ranking among railroads in the S&P 500 Clean Capitalism Ranking published by Corporate Knights, a media, research and financial products company.
 
Corporate Knights ranked companies in the S&P 500 based on 11 key performance indicators, including carbon, energy and safety productivity; highest executive pay to average employee ratio; leadership diversity; and percent of tax paid in cash. NS ranked No. 66 while Hess Corp. was the top-ranked company.
 
The high ranking “reflects our commitment to proactive management of sustainability issues and strong stakeholder communication,” said NS Corporate Sustainability Officer Blair Wimbush in a prepared statement.

Also late last week, Canadian Pacific asked the Canadian minister of labor to appoint a conciliator to help progress negotiations on a new agreement with the union that represents the Class I’s train crew members and rail traffic controllers.

The existing contract with the union, which represents 4,800 CP workers, expired on Dec. 31, 2011. The parties have been negotiating since early October on a number of topics, ranging from wages to work rule changes and pensions.

CP is seeking to changes to legacy pension and post-retirement benefits to make them industry-comparable. The railroad has contributed $1.9 billion to its pension plan over the past three years. Some of the options under consideration would provide guaranteed pension payments that are a multiple of average Canadian industrial pension payments and comparable to what the union already has agreed to for the majority of its members at another major Canadian railway, CP officials said in a prepared statement.

“The legacy pension costs significantly impact CP's operating ratio and our ability to further fund investments that will support growth opportunities for our customers," said CP President and Chief Executive Officer Fred Green. "We've made changes to the management pension plan. The time to address this within our collective agreements is now."

The average conciliation process can last between 80 and 90 days, CP officials said.