April 16, 2007 13:45 ET

CN concludes national UTU agreement not possible

Company seeks to negotiate regional settlements in Canada

MONTREAL, QUEBEC--(CCNMatthews - April 16, 2007) - Following discussions held April 14, 2007, by CN and United Transportation Union (UTU) negotiators, CN has concluded that a national collective agreement with the UTU cannot be reached.

CN said one faction of the UTU is reporting for work, awaiting the outcome of the raid application by the Teamsters Canada Rail Conference pending before the Canada Industrial Relations Board. Another UTU faction is engaging in rotating withdrawals of service, in support of the UTU's bargaining position. In light of the continuing internal conflicts within the UTU, CN believes it's increasingly clear that the union today is unable to deliver a national negotiated settlement that its members across Canada would ratify.

Therefore, CN today has invited the union back to the bargaining table to address and negotiate regional settlements.

President and Chief Executive Officer E. Hunter Harrison said: "This bargaining process is broken. After eight months of negotiations, we are no closer to a national agreement. Since the start of negotiations, the union has failed to present a unified agenda that could be used as a foundation for a negotiated settlement. CN would like to achieve workforce stability with its conductors. We now feel that regional deals are the best alternative to achieve this at the bargaining table."

Harrison continued: "CN reached three major settlements with one of Canada's largest unions in January. We hope that by focusing on regional common interests, we can reach negotiated agreements in the best interests of our employees and business."

No new talks with the UTU are currently scheduled at this time.

UTU members in Canada have been on strike at CN since Feb. 10.

CN continues to serve its customers with management personnel performing the duties of locked out UTU members.

This news release contains forward-looking statements. CN cautions that, by their nature, forward-looking statements involve risk and uncertainties, and that its results could differ materially from those expressed or implied in such statements. Important factors that could cause such differences include, but are not limited to, industry competition, legislative and/or regulatory developments compliance with environmental laws and regulations, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, the effects of adverse general economic and business conditions, inflation, currency fluctuations, changes in fuel prices, labour disruptions, environmental claims, investigations or proceedings, other types of claims and litigation, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to CN's most recent Form 40-F filed with the United States Securities and Exchange Commission, its Annual Information Form filed with the Canadian securities regulators, and its 2006 Annual Consolidated Financial Statements and Notes thereto and Management's Discussion and Analysis (MD&A), for a summary of major risks.

CN -- Canadian National Railway Company -- spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key cities of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.

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