CP Rail may outsource major work during strike-CEO

By Jeffrey Jones

CALGARY, Alberta, May 28 (Reuters) - Canadian Pacific Railway Ltd. (CP.TO: Quote, Profile, Research, Stock Buzz) may contract out heavy repair work on its tracks if a strike by maintenance workers lasts into the summer, the railroad's chief executive said on Monday.

Nearly two weeks after 3,200 workers represented by the Teamsters union walked off the job, CP Rail CEO Fred Green said he will not back down from his position that they must accept a company-wide wage-hike pattern. No talks are scheduled.

The summer is the railroad's period for major repairs of tracks and facilities normally conducted by the members of the Maintenance of Way Employees Division of Teamsters Canada.

During the dispute, CP Rail has prioritized its work into items that it must do, that it wants to do and that it would like to do, Green said in an interview.

"The further in we go, we'll have to refine our priority list," he said. "What we also have the ability to do is, if people aren't working, we can contract it out."

The railroad is using workers from its management ranks to take care of the day-to-day track and bridge maintenance that had been the responsibility of about 1,200 of the unionized staff. It deferred expansion activity during the dispute over wages and work-rule changes.

"At this point, we've got so many people trained that we can actually set up gangs and operate the gangs as well as the regular maintenance that we're doing," he said.