Merger update: CP critiques CN plan to divest KCS line; unions file concerns

CN's plan to sell Kansas City Southern's line between New Orleans and Baton Rouge, Louisiana, is "inadequate" and fails to eliminate anticompetitive issues, Canadian Pacific officials said today.

"CN's commitment to divest this 70-mile line is clear recognition by CN that it and KCS have always been head-to-head competitors, contrary to CN's repeated claims that the combination was ‘end-to-end,'" they said in a statement. "However, CN's commitment does not come close to solving the anti-competitive problems inherent in the proposed CN/KCS transaction."

The full statement is accessible here.

Meanwhile, four rail labor unions, referring to themselves as the Allied Rail Unions (ARU), have submitted comments to the Surface Transportation Board regarding the potential CN-KCS merger.

The unions expressed concern over the "nonproductive, and potentially destructive, competition" between CN and CP, and the way the two are pursuing a KCS merger.

"As CN and CP compete for KCS they may negate any potential transportation benefits of a consolidation with KCS, and there is a likelihood that innocent bystanders — employees of CP, CN and KCS, and shippers which use those carriers — will pay a price for this exercise in one-upmanship," ARU officials said. "A bidding war has consequences."

The four unions that filed comments are the Brotherhood of Maintenance of Way Employes Division-IBT; Brotherhood of Railroad Signalmen; International Association of Sheet Metal, Air, Rail and Transportation Workers-Mechanical Division; and National Conference of Firemen and Oilers.

A summary of the unions' comments is available here.