New York | Reuters –– CSX Corp. CEO Hunter Harrison has died, the U.S. freight railway operator said on Saturday, just a few days after announcing that the veteran rail executive it hired earlier this year to boost its profits had taken a medical leave of absence.
Harrison, 73, died “due to unexpectedly severe complications from a recent illness,” the company said in a statement, adding that he would be succeeded for now by acting CEO Jim Foote.
“We are immensely grateful for the opportunity to have worked with the railroad legend,” Foote said in a letter to employees of CSX, which has over 33,000 km of track, mostly east of the Mississippi River, adding that it would “honour his legacy by staying focused” on his business plan.
Tennessee-born Harrison was best known in Canada as the chief executive of Canadian Pacific Railway (CP) from 2012 until January this year. At the request of U.S. activist investor Bill Ackman, Harrison took up the CP post following his retirement as CEO of Canadian National Railway (CN) in 2010.
“Professionally, Hunter was unmatched in this industry. He will go down as the best railroader ever, plain and simple,” CP’s current CEO Keith Creel said in a separate statement Saturday.
“What he has done at multiple railroads and for our industry the last 50-plus years is incredible, which includes bringing CP back to its rightful place among leaders in the Class 1 space in what some have called the greatest corporate turnaround in history.”
Hired in March as CSX’s CEO, at the urging of another activist investor, Paul Hilal, Harrison had been in the midst of an ambitious and sometimes controversial effort to overhaul the railway by laying off employees and streamlining operations.
Seen using an oxygen tank when meeting with investors last month, he had been hired at CSX on a four-year contract with an estimated value of US$300 million.
“The board will continue to consider in a deliberative way how best to maximize CSX’s performance over the long term,” CSX chairman Edward Kelly said in a statement that called Harrison a “larger-than-life figure.”
News of Harrison’s leave from CSX, announced late Thursday, sent the No. 3 U.S. railway’s shares tumbling as much as 10 per cent in Friday trading on the Nasdaq. Despite that, the stock is up 47 per cent so far this year.
Harrison, who led turnaround plans at both CN and CP, first came to the Canadian rail sector as CN’s chief operating officer following his stint as CEO at U.S. railway Illinois Central, which CN bought in 1998. He had previously taken a medical leave at CP in 2015, after surgery and a bout with pneumonia.
While CSX’s turnaround plan went over well with shareholders, its execution triggered service disruptions and ran afoul of regulators and customers.
CSX, which on Friday brushed off questions about whether the board has been slow to disclose Harrison’s health problems, provided no further details about his cause of death.
Foote, who also holds the titles of chief operating officer and chief sales and marketing officer, had worked with Harrison at CN, but has never headed a major railroad.
He has said he would follow through with the wide-ranging overhaul now under way, but some investors on Friday expressed doubts about whether he could deliver on Harrison’s ambitious plan, which included closing numerous railyards where train cars are sorted and the potential sale of some short-line rail segments.
— Christian Plumb is a business editor for Reuters in New York City. Additional reporting by Eric Johnson. Includes files from AGCanada.com Network staff.