CN's Transcona Shops Win Another Major Locomotive Conversion Contract.

Business Editors

WINNIPEG, Manitoba--(BUSINESS WIRE)--Nov. 29, 2000

Canadian National (NYSE:CNI)(TSE:CNR.) today announced that its Transcona maintenance shops have been awarded a major locomotive conversion contract by Locomotive Leasing Partners (LLP), a GATX Capital/EMD joint venture.

"This is excellent news for our skilled employees at the Transcona Shops," said Peter Marshall, vice-president - Prairie Division. "This contract from LLP is the result of the total teamwork approach taken by CN to ensure a sustainable level of work for its Transcona Shops. The local management and specialists of CN's Engineering and Mechanical departments and the Supply Management groups have worked very closely to ensure that the Shops would be awarded this major contract."

The Transcona Shops will convert 18 GP40-2 locomotives to GP38-2 specifications. These locomotives, which were formerly part of the Illinois Central Railroad's locomotive fleet, were acquired by LLP from CN. Once they have been converted, the locomotives will be available for lease. LLP has also signed a purchase option for another 18 locomotives. If LLP exercises its purchase option in 2001, the 18 locomotives will also be converted from GP40-2 to GP38-2, subject to a mutually agreed delivery schedule.

Approximately 40 employees have been assigned to this locomotive upgrade program. The work will focus on major components, such as the cabs, electrical systems, diesel engines and traction systems. The locomotives will also be completely repainted. Three units will be delivered to LLP every two months beginning in January 2001, with the last unit(s) being delivered in December 2001.

This is the third major locomotive upgrade contract LLP has awarded to Transcona Shops. In 1999, 24 GP38 locomotives were overhauled and upgraded to GP38-2 configuration. In March of this year, a second contract was awarded to Transcona to completely retrofit another group of 24 GP38-2 locomotives. Over 90 employees have been assigned to this contract, which should be completed by year-end.

Employing approximately 750 people, Transcona is one of CN's largest rolling stock maintenance facilities. The facility comprises four main shops specializing in cars, locomotives, traction motors and wheels. All in all, CN has close to 3,000 employees in Manitoba.

Canadian National Railway Company spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, BC, Montreal, Halifax, New Orleans, and Mobile, AL, and the key cities of Toronto, Buffalo, Chicago, Detroit, Memphis, St. Louis, and Jackson, MS, with connections to all points in North America.