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CN NORTH AMERICA PRESIDENT SAYS CANADA'S RAILROADS NEED TO ABANDON, SELL OR SHARE SURFEIT OF UNECONOMIC LINES - RAIL NETWORK TOO LARGE BY HALF

 NEW ORLEANS, Oct. 1 /PRNewswire/ -- "A smaller, more highly-skilled workforce, armed with new, sophisticated computerized customer service tools will let CN North America cut its costs substantially over the medium term. But on their own, workforce reduction, new technology and high-tech training are not enough to return CN to profitability," cautioned Paul Tellier today, at the Association of American Railroads Conference.
 The railway president and chief executive officer explained that Canada's railways lag well-behind their U.S. counterparts in taking the tough decisions that will restore their financial health.
 "CN maintains one of the largest rail networks in North America. But our core network, carrying 92 per cent of our total volume, amounts to only 39 per cent of our track.
 "By 1995, we want to reduce our network in Eastern and Central Canada by roughly 20 per cent. We want to sell another third. This will leave CN operating a network in the East of about half the current size, fed by a cluster of short lines."
 "Nothing is more urgent, therefore," he added, "than to complete the process of deregulation that began with the Staggers Act in the U.S., in 1980, continued in Canada with the National Transportation Act (NTA), in 1987, but remains incomplete."
 Earlier this year, a government Review Commission recommended revolutionary changes to the NTA. The philosophy is simple: market forces must be allowed to shape the rail network and the services that the industry offers customers. Specifically, the report recommended uncomplicating and speeding up the process of selling railway lines.
 "If the NTA Review Commission's suggestions are acted upon, the National Transportation Agency will speed up final approval of such transactions.
 "The situation is acute. We anxiously await the response of the policymakers."
 Mr. Tellier recounted the obstacles and delays that CN has experienced thus far, citing the sale of two of its lines to a shortline operator. "It took more than a year to get approval to sell an Ontario line, and selling another line in Nova Scotia proved even more difficult. Not only did the regulatory agency conduct hearings; so did the Subcommittee on Transportation and Communications of Canada's Senate.
 "That's no way to run a railroad. Certainly not in the 1990s, when CN must move quickly to take the crucial steps that will improve its financial picture."
 -0- 10/1/93
 /NOTE TO EDITORS: A photo accompanying this release is available on the Canapress Photo Network/
 /CONTACT: Robert Frank of CN North America, 514-399-7210/


CO: CN North America ST: Louisiana IN: TRN SU:

WB -- NY048 -- 7781 10/01/93 12:01 EDT
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Publication:PR Newswire
Date:Oct 1, 1993
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