CP Railway plans Calgary HQ move to cut costs say unions, source

Fri Nov 23, 2012 1:34pm EST
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* Move to Calgary rail yard planned, union president says

* Move, job cuts likely part of CEO restructuring plan

* CEO to detail strategy Dec 4-5 in New York

By Susan Taylor and Nicole Mordant

Nov 23 (Reuters) - Canadian Pacific Railway is planning to relocate much of its head office from downtown Calgary, union officials and a source close to the company said, under a restructuring plan that its new chief executive will detail to investors in early December.

Chief Executive Hunter Harrison told U.S. union leaders and a Canadian union president that Canada's second-biggest railroad will move employees out of its glass-towered headquarters as part of an ambitious cost-cutting plan.

Harrison, a hard-driving, 50-year veteran of the rail industry, was appointed CEO in June to turn around the underperforming railway after a bruising proxy battle ousted his predecessor, as well as the previous chairman and several directors. He is the hand-picked choice of CP's biggest shareholder, William Ackman's Pershing Square Capital Management, who launched the proxy fight.

One union official said the head office move was to a nearby Calgary rail yard that CP owns. Details are expected Dec 4 and 5, along with an announcement of further job cuts, when Harrison outlines his plan to improve efficiency at CP.

"They're moving the headquarters to Ogden, which just makes sense," said Bill Brehl, president of the Teamsters Canada Rail Conference Maintenance of Way union.   Continued...