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Jul 22, 2020

CN Rail preparing for all recovery scenarios: CEO Ruest

We're 'cautiously optimistic' moving forward: CN Rail CEO

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Canadian National Railway Co. is bracing for several scenarios when it comes to the trajectory of the COVID-19 pandemic and the pace of the country’s economic recovery, according the company’s chief executive.

The railroad giant is preparing for a possible second wave of infections, and for either a slow or fast economic recovery, president and CEO J.J. Ruest said Wednesday in an interview with BNN Bloomberg’s Amanda Lang.

“Being the biggest railroad in Canada, we play an essential role in the economy and we need to be able to play that role no matter what the scenario is in the coming months,” Ruest said.

He said that if there is another slowdown, the company will reassess costs and possibly furlough more workers. On the flip side, he said that the company needs to be prepared to “call people back faster, to probably start hiring this fall for the next winter” if the economy starts to pick up.

Ruest’s comments come one day after CN Rail reported a 60-per-cent fall in profits in its second quarter as the pandemic fallout forced declined shipments in most categories.

So far this year, CN Rail has put 3,000 of its workers on furlough and permanently laid off 1,000 others. But the company has started to recall some workers as it brings more of its rail cars out of storage for automotive and lumber traffic.

“Right now is the beginning of the recovery,” Ruest said.

There are promising signs of a bounce-back. For instance, the retail sector rebounded sharply in May, during which vendors made up for almost all of their losses from March and April, according to data from Statistics Canada.

But CN Rail does not need to rely on such reports to see where the economy is headed, Ruest said.

“We have the benefit of being on the frontlines. So we don’t rely on economists’ forecasts to tell us where the economy is going, we rely on our own daily carload,” he said.

“We move the products so we actually, in many ways, have a better pulse of some of these sectors.”

—With files from The Canadian Press