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'Hangover' dogs recovery, CN's Mongeau says Add to ...

Canadian National Railway Co., which is striving to bounce back from a five-day strike, faces a lengthy recovery period before freight shipments stage a sustained rebound as the economy slowly regains its health. The economic boom-turned-bust will have lingering effects, despite stimulus packages, says Claude Mongeau, CN's incoming CEO. "You go to a party and you have a hangover. So the government is coming over with Aspirin and so we all feel a bit better, but the hangover is still there," Mr. Mongeau said yesterday during a Morgan Stanley webcast from New York. "It may take a few years" before freight shipments recover to peak levels seen during 2006 and 2007, said Mr. Mongeau, who will replace retiring Hunter Harrison as CN's CEO on Jan. 1, 2010. About 1,700 locomotive engineers who belong to the Teamsters Canada Rail Conference went on strike at 12:01 a.m. Saturday, but CN management and the union reached a tentative agreement yesterday. Parliament had been poised to pass back-to-work legislation as early as today, if there wasn't a contract settlement. "Restoring full rail service quickly is critical to the national economy at this sensitive time," Labour Minister Rona Ambrose said in a statement yesterday. CNR (TSX) fell 15 cents to $56.15.

 

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