Canadian National Railway-Kansas City Southern merger a big win for workers, region

The Kansas City Southern railroad has a long and distinguished history in this city. Now this nearly 135-year-old local institution, which was formed to connect Kansas City to the rest of the country, has announced plans to connect it to the rest of the continent by merging with Canadian National Railway.

As the chief operating officer of Canadian National, as well as a native Kansan, I am excited to tell you why this transaction is going to be great for Kansas City. I have spent a great deal of my life in this area. My first job in the rail industry was with the Atchison, Topeka and Santa Fe Railway just 6 miles from the current headquarters of Kansas City Southern. I have attended too many Royals and Chiefs games to count, and I still remember my feeling of sharp disappointment when the Kings left town. I care about this place deeply, and I want to see it thrive.

My most important message for you is that the headquarters of Kansas City Southern will stay where it belongs: in Kansas City. That is a firm commitment. We have enormous respect for the railroaders at Kansas City Southern, and their immense talent is a big part of why we are interested in this transaction.

When the companies combine, we will have a unique opportunity to grow together. Our strategy is based upon a simple premise: that we can make the overall economic pie bigger by convincing more shippers to use our trains if Canadian National and Kansas City Southern are united. Our combined networks would create a unique transportation system that runs from Canada to Mexico, from the Atlantic to the Pacific — with Kansas City at the center of it. We would be the only transcontinental railroad poised to benefit from the immense and still largely untapped opportunity created by the USMCA, or United States-Mexico-Canada Agreement on trade.

The combined company would be able to offer shippers in all three countries the things they value most: speed, simplicity, reliability and safety. We would create new services that are faster and more direct than anything now in existence. As a result, we are confident that we will win business from companies that are now using trucks, barges or other less direct railroads. This would boost revenues and opportunities for our combined company.

Just to cite a few of many examples, we can see promising openings to win new business from aluminum plants in Canada sending their product south to Texas, from car parts manufacturers in Mexico running north to Michigan, and from foreign exporters reaching into the Midwest. We plan on growing our market share with the steel, fertilizer, fuel, plastics and lumber industries, among many others.

We would also help farmers in the Midwest take advantage of single-line service to Mexico, as well as linking them directly to multiple deep-water ports on both the Atlantic and Pacific in a far more efficient way. This would open new markets and help them sell more goods — yet another source of potential job creation in this region.

I should add that the benefits would be more than just economic. Our plan would also take thousands of trucks off the roads, reducing congestion and pollution. We would use the latest technology to increase rail safety throughout the network. Finally, we would invest in our communities, as we have always done, and maintain our commitment to being model corporate citizens.

Add it all up, and the Canadian National-Kansas City Southern merger is a clear win for the place where I have spent a big part of my life. It promises a prosperous future for a company that has been such an important part of Kansas City’s history.

Rob Reilly is chief operating officer of Canadian National Railway.