MONTREAL -- Canadian National Railway Co. says it plans to acquire 1,000 new grain hopper cars that will allow it to phase out older, lower-capacity cars over the next two years.

The cars will be built by National Steel Car Ltd. at the company's Hamilton plant.

National Steel Car says that combined with CN's order for 350 lumber cars, the purchase of grain cars will result in the hiring of more than 550 additional people at its Hamilton facility.

The Montreal-based railway company's 12,000-car Western Canadian grain fleet included CN-owned hoppers, leased cars and private customer equipment.

The railway placed the grain hopper order after Ottawa introduced changes to encourage railways to make investments to avert service disruptions.

The wide-ranging Transportation Modernization Act includes financial penalties for railways that fail to deliver promised rail cars for grain shipments on time.