• CMQ for sale?

  • Discussion of present-day CM&Q operations, as well as discussion of predecessors Montreal, Maine & Atlantic Railway (MMA) and Bangor & Aroostook Railroad (BAR).
Discussion of present-day CM&Q operations, as well as discussion of predecessors Montreal, Maine & Atlantic Railway (MMA) and Bangor & Aroostook Railroad (BAR).

Moderator: MEC407

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  by Zeke
 
Is CP going full bore takeover of CMQ or will CMQ still retain its corporate identity and employees and basically operate as a wholly owned subsidiary ?
  by KSmitty
 
Yes.

Initially nothing major is changing. Offices will be maintained in Bangor. However, if you look at the DM&E purchase it was operated independently and slowly folded in, department by department. Presumably, CM&Q will be slowly integrated. Likely first step will be to move dispatching from the contract dispatcher (Railterm) to CP's own dispatch facility in MN. Then you'll see the office staff moved out of state. Then the train crews will be integrated and in just a few years CM&Q will cease to exist.

I'd say the only real questions will be: How CP handles absorbing the operating department. Do they give the CM&Q crews prior rights on the former CM&Q lines or do they just throw them into the ranks and let them fend for themselves on the seniority roster? And how long does it take to complete the integration?
Last edited by MEC407 on Sun Jan 19, 2020 2:27 pm, edited 1 time in total. Reason: unnecessary quoting
  by gokeefe
 
In this labor market??? If CP can avoid losing Maine based train crews they will.
  by KSmitty
 
Well, considering CP is paying nearly double what CM&Q is its pretty unlikely that they'll be losing crews when they integrate...
  by gokeefe
 
I don't see the linkage between purchase price and staffing.

Are you saying that the higher price for the asset is somehow indicative of a willingness by CP to pay a huge price to keep staffing in place?
  by KSmitty
 
Neither do I, but thats not what I'm saying.

What I am saying: CP is paying train crews ~$35/hour give or take and CM&Q is paying train crews ~$18/hour give or take.

You mentioned concern about finding people in this labor market. I'm simply saying CP shouldn't have a retention issue since they are paying almost twice what CM&Q is currently paying their employees. The guys working train and engine service for the Moose are about to go from the lowest paid in the state to the highest paid in the state when the Beaver takes over. The exception might be Amtrak which is paying comparable, maybe a little better than CP. Either way, doubling the pay rate goes a long way to aid in employee retention.

CM&Q has had plenty of applicants. Double the pay scale and figure in Central Maine's current job prospects (even in a booming economy) and I say personnel will be a small concern for CP when it comes to the operations of their new mileage.
  by backroadrails
 
I thought train crews on CMQ started out at $25.00 a hour, I remember seeing that from a job posting on Facebook a couple of years ago.
  by Zeke
 
IIRC CP engineers are payed around $ 51 dollars' an hour but not sure if that's Canadian or US Dollars as they operate in two countries. Also I think the CMQ engineers are in a steel workers union and the conductors are in the UTU.
  by MEC407
 
$18 an hour? Good Lord. I had no idea they were paid so little. Surely even MMA paid better than that...?

That begs the question, how was CMQ able to get or keep employees at such a low wage? This isn't easy entry-level work we're talking about. It's hard work and a hard lifestyle.
  by gokeefe
 
KSmitty wrote: Sun Jan 19, 2020 5:50 pmCM&Q has had plenty of applicants. Double the pay scale and figure in Central Maine's current job prospects (even in a booming economy) and I say personnel will be a small concern for CP when it comes to the operations of their new mileage.
Completely agreed. I had no idea the wages were that far apart.
  by S1f3432
 
Unfortunately, it's been a long standing belief among a lot of Mainers, especially in the northern and interior parts of
the state that you should be content to "just get by" and if you're making more than 2 or 3 dollars more than the minimum
wage you've hit the big time and hang on tight. $18 dollars an hour is big money to these folks in an area where there
aren't that many jobs to begin with. I had one guy tell me he just would not feel right about taking that much money-
he would have to give some of it back! This after he found out how much electricians were making and comparable to
class 1 railroad wages at the time.
  by cbc6403
 
What makes you think the current employees will automatically get the same that CP pays other employees in the US? Have they actually said this?

Part of the reason for buying CMQ as a going concern is that they can operate it as an internal shortline, with the same work rules and wages CMQ has already negotiated. It's not that I want the workers to be paid less, it's just that I don't expect to see that kind of corporate benevolence without some arm twisting going on.

GTD
  by Zeke
 
The CMQ is now owned by the CP and work rules and pay rates will be negotiated. The Main line of the CMQ is an appendage of the CP system and I would think the Brotherhoods will make sure the CP pays the system scale. They are not buying the CMQ to run some union evading low wage renegade short line. The unions will not tolerate it nor will the Canadian government. The CMQ main is the eastern arm of CP's march to St John and will look like and operate as a Class one carrier.
  by fromway
 
Picked this up from CMQ Facebook posting.
CP Connect announcing CP's new Direct Intermodal Gateway to Atlantic Canada on CMQ. It will be interesting to see when the first well car comes through.
  by johnpbarlow
 
At CP's Q419 earnings analyst conference call yesterday, Keith Creel was effusive about CP's acquisition of CMG. Here are a few excerpts:

From Creel's opening remarks:
"...I’m also happy to highlight a number of positive announcements this past quarter that will be benefiting this franchise and our shareholders, customers and fellow colleagues for years to come, namely in the CMQ acquisition.
In November, we announced that the acquisition of the Central Maine & Quebec railroad. This acquisition enables CP to extend its reach to St. John ... New Brunswick can increase our presence in Eastern U.S. with access to a port in Searsport, Maine. We closed the transaction successfully at the end of December.
I was excited about the strategic value of the network addition would enable when we purchased it. But after spending time on the railroad the last few weeks, I feel even more compelled and convicted about the addition to our CP family franchise and the value it represents. The value proposition is simply compelling.
Operationally, we’ll work hard at bringing our expertise, our safety record and our disciplined culture to the railroad as quickly as we possibly can. Commercially, the customers are extremely excited to have service alternatives, which they simply have not been afforded in over two decades.
We’ll be able to offer the shortest routes from the Maritimes to Montreal, Toronto, Chicago, and Western Canada, that will be truck-like reliable and truck-like compatible – competitive on a service standpoint and obviously much more compelling on a call standpoint. We’re going to stick to our expertise, making a real acquisition, where our team has proven that we know how to create service solutions that enable compelling value for our customers, for our shareholders, both at the same time..."
Later on, Creel says "...I see opportunity in intermodal growth, be it domestic, be it international. I see an opportunity in automotive growth, be it domestic inbound product, be it off the water inbound product. I see opportunities in fuels. I see opportunities in lumber..."
And "...anticipate [STB] approval in May of this year to implement a more CP like operating plan [FRA class 3 for 40mph MAS], taking time out of the schedules with the existing physical plant. It’s not that we’re running trains faster, per se, it’s, in totality, the transit time is reduced, because we’re handling the trains differently and the schedules differently and the philosophically, it’s differently.
So more to come. I think 2021, you’ll start to see the needle move in 2021 and 2022 for certain. Those are two key years for us..."
And wrt to CP interest in G&W's Quebec Gatineau, Creel offered "...Obviously, there’s a piece of that network again, that sort of is reflective of the CMQ story, railroad that we used to own that went to Quebec city. That just depends. It may or may not come into play, but it could represent compelling value. It just depends on the willingness to sell it and what the numbers are and if we can make it work. So with that said, that’s an opportunity...."

URL to the con call transcript: https://seekingalpha.com/article/431998 ... nings-call
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