Canadian National, Illinois Central File Merger-Related Safety Integration Plan with United States Surface Transportation Board.

WASHINGTON, D.C.--(BUSINESS WIRE)--Aug. 14, 1998--CN (ME:CNR.) (TSE:CNR.) (NYSE:CNI) ILLINOIS CENTRAL (NYSE:IC) Canadian National Railway Company and Illinois Central Corporation today filed a joint Safety Integration Plan with the United States Surface Transportation Board-STB). The filing - pursuant to CN/IC's July 15 STB application seeking regulatory approval of CN's acquisition of IC and the integration of the companies' rail operations - describes at length the steps CN/IC will take to integrate operations safely and in compliance with applicable regulations.

CN President and Chief Executive Officer Paul M. Tellier said: "Safety is a chief priority for CN and IC. We have systems and standards that have proven effective in creating safe railroads.

"The CN/IC transaction does not create any significant new safety challenges, because the carriers meet only in the Chicago terminal area and have no overlapping lines and few redundant facilities. This means that CN/IC's Safety Integration Plan focuses on the strengths of the railroads' existing safety programs, and the ways CN/IC can use the integration process to build on those strengths in areas such as technology and systems training program, the integration of car fleets and the cascading of locomotive resources."

IC President and Chief Executive Officer John D. McPherson said: "The integration of CN/IC facilities will not require significant changes in capacity or operations, nor will it result in major changes in operating responsibilities for employees.

"Any required changes in capacity or operations will be made gradually, with due regard for their safe implementation. For the most part, experienced employees will continue to perform the same tasks. Anticipated job changes will be handled carefully, and specific efforts will be made to ensure that knowledgeable personnel are retained. Supervisory and management responsibilities will not be affected by the transaction to any significant degree."

The Safety Integration Plan follows U.S. Federal Railroad Administration guidelines and is divided into major sections including: corporate safety culture; training; operating practices; motive power and equipment; engineering; hazardous materials; dispatching; crossings, trespassing and railway security; deployment of personnel; employee quality of life; passenger service; and, information systems and technology.

CN and IC have strong safety programs today. CN in 1997 had the best train accident record (2.2 train accidents per million train- miles) of all Class 1 railroads in North America. Results for the first half of 1998 have shown a consistent improvement in performance. IC has won an E. H. Harriman Institute Award eight years running, reflecting the consistent improvement of its personal injury record. CN's U.S. rail subsidiaries - Grand Trunk Western Railroad Inc. and Duluth, Winnipeg and Pacific Railway Company - have also shown steady progress in achieving even safer levels of operation.

Tellier and McPherson said: "CN/IC intends to use the opportunity represented by the transaction to integrate the railroads' most effective safety practices and further improve their safety performance."

CN operates approximately 15,300 route-miles of track in eight Canadian provinces and six U.S. states, with principal routes to every major metropolitan area in Canada and to the major U.S. rail hubs of Buffalo, Detroit, Duluth/Superior, Wis., and Chicago. CN is North America's only transcontinental railroad, and Canada's largest railroad serving all five major Canadian ports on the Atlantic and Pacific oceans and the Great Lakes.

IC operates approximately 3,370 route-miles of track running north- south between Chicago and the Gulf of Mexico, and east-west between Chicago, Iowa and Nebraska. IC's main north-south route reaches the major metropolitan areas of St. Louis, Memphis, Tenn., Baton Rouge, La., and New Orleans. IC's east-west route extends from Sioux City and Council Bluffs, Iowa, to Chicago.

    CONTACT: Canadian National Railway Company
              Mark Hallman, 416/217-6390
                         or
              Illinois Central Corporation
              Jack Bruke, 312/755-7591