CN sells CANAC Inc. subsidiary to Savage Companies; retains ownership of BELTPACK(R) technology (April 28, 2004)

CN has announced the sale of 100 % of the stock of its St. Laurent, Que.-based CANAC Inc. subsidiary to Savage Companies of Salt Lake City, Utah. The transaction, which is expected to close by April 30, 2004, will include CANAC’s industrial rail operations in Canada and the United States, its planning and infrastructure engineering services, as well as railway training and international services.

Excluded from the transaction is CANAC’s Remote Control Division, which produces BELTPACK(R) and other locomotive remote control products. This group will be renamed BELTPACK Corporation and remain a CN subsidiary. It will continue to serve the North American and international markets with existing staff from its current locations.

“CN is very pleased with this transaction, which positions CANAC’s core businesses for continued growth under Savage Companies’ ownership. This is good news for CANAC’s employees and customers. At the same time, the creation of BELTPACK Corporation will ensure CN ownership of the technologically-advanced BELTPACK family of remote control products that have become a mainstay of the North American railroad industry," said Claude Mongeau, executive vice-president and chief financial officer, CN, and chairman of the board of CANAC.

HARRISON RENEWS CONTRACT

In related news, CN chief executive officer E. Hunter Harrison has renewed his employment contract through the end of 2008.

“I’m delighted to renew my commitment to CN. This company’s railroaders are the best in class, and it’s a true pleasure to lead them. I believe CN’s prospects are almost limitless, and I look forward to the next five years as the company’s chief executive officer. Together I know our disciplined team – a team truly focused on execution – will keep CN at the forefront of rail industry performance," said Harrison.

He became president and chief executive officer of CN on Jan. 1, 2003, joining CN as executive vice-president and chief operating officer in March 1998, and served in that position until December 2002. He has been a director of CN since December 1999. Before coming to CN, Harrison was a director and president and chief executive officer of the Illinois Central Corporation (IC) and Illinois Central Railroad Company from 1993 to 1998.