Concerns are being raised that efforts to improve efficiency at Canadian Pacific Railway Ltd. are contributing to a series of accidents at the railroad in recent months, including two more this week.
The country’s second-largest railway is in the midst of a massive restructuring under its new chief executive, Hunter Harrison, aimed at righting the railway’s chronic underperformance.
Those efforts have already started to take hold, with CP delivering its best-ever first quarter result this year en route to a record year of earnings, management says.
But some of the company’s employees are starting to question whether the cutbacks at the railway – including nearly 4,000 job losses there – and increased disciplinary actions are behind the increase in accidents in recent months, including a derailment in Saskatchewan Tuesday that leaked
68,500 litres of crude oil on the ground before it was contained.
There was also a two-train collision Saturday in a CP rail yard near Medicine Hat, Alta, where one train clipped the tail end of another passing freight train.
. CP Rail rushes to contain oil leak after train derails in Saskatchewan
. Are derailments the cost of CP Rail’s efficiency drive?
Those incidents follow three other derailments – two involving crude trains and one potash train – in recent months that management has blamed on a faulty track and two shattered wheels.
Tom Murphy, president of the CAW Local 101, which represents roughly 1,900 CP skilled trade workers, said he believes there is a direct correlation between the derailments and the reduction in CP’s headcount, including hundreds of his members who are tasked with conducting the safety inspections on the trains.
“The difference now is they have longer trains, less people to check them out, and a lot of the repairs, the supervisor says, ‘We don’t need to fix that now. Let it go,’” Mr. Murphy said in an interview Tuesday.
He said the reduction in headcount was also coming at a time of increased discipline as well, or the same sort of “culture of fear” Mr. Harrison was accused of fostering at Canadian National Railway Co. when he was chief executive there.
While it is clear the measures Mr. Harrison implemented at CN led to it becoming the most efficient top tier railway in North America, they also were faulted for a series of high-profile derailments at the railroad that eventually led to a federal safety review of the country’s largest railways in 2007. The review chastised CN under Mr. Harrison for creating a culture wherein employees were reluctant to report safety violations for fear of reprisal, and where measures to prevent future incidents were seldom implemented afterward.
His questionable safety record also was chief among the concerns of those who opposed his appointment as CEO during the proxy battle at CP last year led by Bill Ackman’s Pershing Square Capital Management LP.
Mr. Murphy said that same culture is now being implemented at CP.
“In some cases, our guys are not allowed [to inspect the rail cars] because they just want to get them out fast, and if you take too long, you’re sent home,” Mr. Murphy said, adding that disciplinary action can range from a five-day suspensions to outright firing.
Mr. Murphy, who has worked with the railway for 37 years, said that is starting to put a strain on inspections, and creating a culture where blame is being shifted.
“They’re looking over their shoulder every minute and not really paying attention to their jobs because of that,” he added.
Hunter is definitely a railroader. But he’s also an old school, hard-lined discipline guy Ed Greenberg, CP spokesman, said safety remains the primary focus of the railway, and that the incidents in recent months were all isolated events.
“Operating safely has, and always will be, first priority at CP. That focus is not going to change,” he said.
But CP has also said it would dedicate an additional $100-million in capital spending this year to upgrade the tracks of some of its lines on which the bulk of its heavier crude and potash trains will be travelling. It is also investing in new technology aimed at improving early detection of flaws in track and in wheels.
Bill Brehl, Teamsters Canada Rail Conference Maintenance of Way Employees Division president, said that is creating some jobs for his members, who are in charge of track maintenance. But he said there are not enough workers at this point for all the work that needs to be done now that the railway is running longer, heavier trains.
He also noted that the faulty track that led to one of the crude train accidents this year was slated to be replaced before it caused the derailment.
Mr. Brehl said he has noticed disciplinary action has mounted since Mr.
Harrison’s appointment for everyone, including management and employees.
“Hunter is definitely a railroader. But he’s also an old school, hard-lined discipline guy,” Mr. Brehl said. “I see the culture of fear is coming over to CP. There’s a whole attitude of harsher and harder discipline.”
He said while this is ostensibly about greater accountability, it has created a culture where employees and management alike are shifting blame and he said he feared shortcuts would be taken in the name of efficiency at the cost of safety.