Running Head: Canadian National Railway

Canadian National Railway

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Canadian National Railway 1

Canadian National Railway

The Canadian National Railway Company was formed in 1919 after an amalgamation of

the two largest and private railroads that had become bankrupt. The two private railroads were

merged with two other state run railroad companies and thereafter incorporated as crown

corporation, fully owned by the government and having an autonomous management body. After

nationalization of the Canadian National Railway it became the largest rail network in Canada as

well as the only transcontinental network in the North American region by employing more than

100,000 personnel. After incorporation of the company and having new management team, it

was able to grow for a short period before the effects of the great depression had a toil in the

company. Its public debt ballooned as well as the economic activities conducted by the company

stunted. A new management came in place and tried to working expenses of the company as well

as expanding its network into new regions and industries (Uth, 2016). This was achieved through

diversifying into services such as maritime, hotels and telecommunications. The company as

well diversified its freight services so as to profit from the silk trade that was thriving back then.

The company was deregulated in the 1960s so as to make a viable commercial company.

This move was undertaken by the Canadian lawmakers and the government so as to increase the

profit margins of the company by it operating as a private enterprise. This was also driven by the

changes of diversification and modernization that were being experienced at the company during

the period of 1950s and 1960s. The period of the 1970s saw refocusing on the rail as the

company divested its interests into non-rail businesses such as real estate, hotel and

telecommunications.

The period of the 1980s saw the company being subject into intense heat of it being

privatized. The company up to this time required massive capital investment in an ongoing basis
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and on the political spectrum, the federal governments ownership of the company meddled on

its management with partisan interests which often led the company in the wrong direction. The

period of 1980s experienced economic recessions in which dozens of crown corporations were

sold. The Canadian National Railways was also eventually privatized in the year 1995 with many

of its shares being bought by American investors (Uth, 2016). The circumstances that led to the

privatization of the company were mostly due to the company lacking clear management to steer

it up and a continued plague of losses. The leaderships of Ronald Lawless saw the company

grow leaner by reducing the number of jobs and other loses in the services the company had

invested in. Paul Teller, replaced the management of Lawless but the deprivations of the

preceding management as well as his lack of experience in the industry, the companys mounting

vast losses convinced the legislation to pass the bill favoring for privatization in 1995 (Tucker,

2017).

Since its privatization, the company came in the limelight in 2012 due to having poor

working conditions, lax safety standards, using of old unmodified tanks and maintenance issues

which had caused it multiple derailments with a short period of time. The latest setback the

company faced was in 2014 when it had 57 derailments (Tucker, 2017). This is due to the

company being of the major carriers of chemicals and petroleum products which at times

colluded against each other causing massive losses. The company has also faced challenges of

labor unrest recently because of its continued program of laying off large numbers of workers.
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Reference List

Tucker, A. (2017). Canadian National Railways. The Canadian Encyclopedia. Retrieved 20 June

2017, from http://www.thecanadianencyclopedia.ca/en/article/canadian-national-

railways/.

Uth, A. M. (2016). Canadian National Railway Company (CN). Salem Press Encyclopedia.