Canadian National Railway Co. said Tuesday it will raise wages for its engineers and alter a work rule after contract talks fizzled last week.
The Montreal-based railroad said it gave Teamsters Canada Rail Conference notice of its plan to increase wage rates by 1.5 percent and apply a change to the mileage caps for the company's union locomotive engineers. The union represents about 1,700 locomotive engineers.
The union-represented conductors at Canadian National currently have a 4,300-mileage cap limitation, and union-represented engineers have a 3,800-mile cap. With this work rule change, the railroad said both groups of employees working in the locomotive cab will now have a 4,300-mile cap _ the limit on how much an employee can travel within a given month.
Canadian National's locomotive engineers, on average, work between 15 and 17 days per month.
The wage increase and work rule change are to take effect on Saturday.
Collective bargaining with the union ended Friday without a settlement. The previous labor agreement expired last year.
The union is required to give 72 hours notice if it plans to strike or hold a lockout. A potential strike could disrupt a number of sectors, including the U.S. auto industry, which relies on railroads to deliver vehicles and parts.
A union representative was not immediately available to comment Tuesday. Teamsters Canada Rail Conference released a statement last week saying they were less optimistic a strike could be avoided.
Canadian National shares fell 40 cents to $53.93 in afternoon trading.