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.

The post Railway CEO Hunter Harrison, 73 appeared first on Alberta Farmer Express.

Customers have complained of longer transit times, unreliable switching operations, inefficient car routings and poor communications with CSX customer service.

CEO Hunter Harrison, who implemented cuts when he was appointed to the job in March, defended his strategy of “precision scheduled railroading” at a hearing at the U.S. Surface Transportation Board (STB) in Washington.

The session marked the first public forum for shippers and trade groups to air grievances and give Harrison the chance to defend his strategy. The STB has been reviewing the railroad’s performance weekly and acting as intermediary between CSX and disgruntled customers.

Since he took over, Harrison closed CSX rail yards, lengthened trains, mothballed locomotives and slashed overtime pay and hundreds of jobs. He also changed the way rail cars are sorted in yards and replaced “unit” trains carrying a single commodity like coal or grain with trains carrying diverse freight.

He apologized to shippers for service disruptions, which he blamed on derailments and internal mistakes, including closing too many yards.

Speaking after Harrison, Cargill vice-president Brad Hildebrand asked the STB to publish minutes of its weekly calls with CSX management and asked CSX to return resources to its network.

“In a nutshell, (precision scheduled railroading) means having to do with less,” he told the regulators.

While some customers have noted improvements, others said CSX’s disruptions continue to create costly logistical headaches for companies from the chemical and agricultural sectors to the automotive industry and steel producers.

Their supply chains, plants and distribution channels rely on CSX’s rail network across the eastern U.S.

Harrison said his strategy was critical to his previous turnarounds of two Canadian railroads — Canadian Pacific Railway and Canadian National Railway — and said the “best is right around the corner.”

“We’ve made some mistakes. This is not a failure of precision scheduled railroading,” he said.

Harrison told the STB his turnaround plan has been implemented across CSX’s system but requires “fine-tuning.” He hinted at more possible layoffs and other yard changes.

Chemours Company asked the STB to require a “flight plan” from CSX outlining future system changes and how they will affect shippers.

In what could be a distant threat to CSX’s revenues, Chemours and trade groups renewed their calls for changes to federal regulations to allow shippers served by CSX to gain greater access to other operators.

Two trade groups asked the STB to require a service recovery plan from CSX with granular performance data and penalty-enforced deadlines.

Dow Chemical’s supply chain vice-president Greg Jozwiak urged the STB to improve rules to expedite relief during disruptions.

“The reality is the procedures take too long,” Jozwiak said. “We need a service remedy counted in days, not weeks or months.”

— Eric M. Johnson is a Reuters correspondent based in Seattle.

The post CSX customers demand end to shipping bottlenecks appeared first on Alberta Farmer Express.

In a letter released by the regulator on Monday, CSX CEO Hunter Harrison laid out the tenets of his “precision scheduled railroading” approach, which he said would improve service, cut costs and better use the railroad’s assets.

But the CEO of the Jacksonville, Fla.-based railroad adopted a much more conciliatory tone than in recent communications over service issues at CSX.

Previously, Harrison had responded to criticism of service issues at CSX by blaming pushback from employees to his new plan.

In mid-August, 44 trade groups asked federal regulators to investigate “chronic service failures” at CSX which they said had rippled out across North America’s rail network.

Harrison responded to that with another letter saying those claims were “grossly exaggerated.”

In his Aug. 24 letter to the U.S. Surface Transportation Board (STB), CSX’s CEO said that this month the railroad had placed “personnel at challenged field locations to bridge communications gaps and target concerns at the local level.”

The company has also resumed operations at a yard in Avon, Indiana, as CSX “pursue(s) optimal processing efficiency to best serve our customers.”

Harrison is a railroading legend who previously served as CEO of Canadian Pacific Railway and Canadian National Railway (CP, CN) where he dramatically boosted profits with his “precision scheduled railroading” approach.

“I remain confident that as CSX implements its PSR model, customers will receive a markedly superior service model,” Harrison wrote in his letter to the STB.

— Reporting for Reuters by Nick Carey.

The post CSX tackling service issues, CEO tells rail regulator appeared first on Alberta Farmer Express.

Investors rushed to bid up shares of CSX after news reports that former Pershing Square partner Paul Hilal was teaming up with Canadian Pacific Railway’s outgoing CEO Hunter Harrison to shake up the Jacksonville, Fla.-based firm.

The stock’s jump added more than US$6 billion to CSX Corp’s market value. Harrison, a well-known turnaround expert, has overseen a three-fold increase in CP’s stock price in five years at the helm. He has also tried to engineer consolidation in the North American rail industry in the past.

A person familiar with the matter said Hilal is aiming for a turnaround of the company rather than its sale. Hilal declined to comment.

While Harrison’s pursuit of a deal could now get another chance, regulatory and political obstacles remain.

Many large rail customers spoke out against CP’s bid last year for No. 4 U.S. railroad Norfolk Southern. The bid failed last spring in the face of criticism from lawmakers and customers, including package delivery giants FedEx and UPS.

“Still, we know Harrison wants to see that sort of deal. And we know CP wanted it as well. Perhaps what we are now seeing is a backdoor way for that deal to happen,” Gordon Haskett head of research Don Bilson, said in Thursday’s note.

Harrison has previously said that CSX has several strengths as a merger target, but stressed that he never made a formal offer for the U.S. railroad.

Keith Creel, who takes over as chief executive of CP on Jan. 31, told analysts on Wednesday that he expects future industry consolidation.

“I don’t know if it’s going to be two years, three years, five years,” he said. “But it’s inevitable. Volume growth is going to come. Railways are not going to be built (so) consolidation will occur. And I can certainly see that happening within my career.”

Hilal’s fund, Mantle Ridge LP, has raised more than US$1 billion and is in the final stages of working out an agreement with Harrison on their partnership.

CSX spokesman Gary Sease said the company and the board will evaluate Mantle Ridge’s views and looks forward “to discussing our core strategy.” The deadline for CSX shareholders to nominate directors is Feb 10.

Opposition to a CSX merger is already reemerging.

The CEO at Union Pacific said the No. 1 U.S. railroad remains opposed to mergers between major railroads in the U.S.; Lance Fritz told Reuters “we still think Class 1 mergers in the United States are not a good idea.”

Union Pacific had publicly opposed CP’s bid for Norfolk Southern.

Harrison has repeatedly touted U.S. rail industry consolidation as a way to improve efficiency and profitability. That view may find stronger support in the administration of U.S. President Donald Trump.

But there are also red flags for companies like Union Pacific. Trump has criticized the auto industry for building cars in Mexico for import into the U.S. and has threatened to impose a “border tax” or roll back the North American Free Trade Agreement (NAFTA).

Fritz said about 12 per cent of Union Pacific’s business is linked to Mexico, but added he is an “optimist” about the prospects for NAFTA even though Trump campaigned as a fierce critic of the North American Free Trade Agreement.

“While I think NAFTA is ripe for modernization in labor practice, environmental practice and e-commerce, it also represents a boon to the U.S. economy,” he said. “It benefits the U.S. consumer and creates U.S. jobs.”

— Michael Flaherty reports on corporate governance and activist shareholders for Reuters from New York. Additional reporting for Reuters by Nick Carey in Detroit and Allison Lampert in Montreal.

The post Activist investor activity reignites rail merger hopes appeared first on Alberta Farmer Express.

Calgary-based CP on Wednesday announced full-year net income of $1.599 billion on $6.232 billion in gross revenues, up from $1.352 billion on $6.552 billion in 2015. Fourth-quarter net income came in at $384 million on $1.637 billion in revenues, up from $319 million on $1.687 billion in the year-earlier period.

Harrison, who announced Wednesday he will retire from CP effective Jan. 31, said the fourth quarter was “weighed down by challenging operating conditions, including unexpected and extreme weather on the West Coast that compounded the impact of an already delayed grain harvest.”

For 2016 overall, he said, the railway’s revenues were weighed down by “a precipitous decline in crude oil shipments and weakness in grain movements, particularly in the first half.”

CP in 2016 moved about 270,000 carloads of Canadian grain — down five per cent from 2015 — including 75,000 carloads in the fourth quarter, down six per cent. Canadian grain revenue for 2016 was down 10 per cent at $962 million, for revenue per carload of $3,559, down five per cent. Fourth-quarter Canadian grain revenue per carload came in at $3,758, up one per cent from the 2015 Q4.

In its U.S. grain segment, CP’s carloads for 2016 came in at about 162,000, up three per cent, for revenue per carload of $3,202, down four per cent. Fourth-quarter U.S. grain carloads came in at 44,000, up 10 per cent from the 2015 Q4, for revenue per carload of $3,488, up seven per cent.

In its fertilizers and sulphur segment, CP’s carloads for 2016 slipped three per cent, to 60,000, while revenue per carload rose eight per cent to $4,769. In potash, meanwhile, revenue per carload rose one per cent to $2,904 on about 116,000 carloads, down six per cent.

CP on Wednesday announced its chief operating officer, Keith Creel, will replace Harrison as CEO effective Jan. 31. However, Harrison is taking vacation leave “immediately” until then, during which time Creel will act as CEO.

Citing an unnamed source, the Reuters news service reported Wednesday that Harrison and U.S. investment fund manager Paul Hilal were finalizing a partnership expected to spur a financial turnaround for a U.S. railroad — specifically, Jacksonville, Fla.-based CSX.

Hilal previously worked for activist investment firm Pershing Square, whose investments in CP led to Harrison’s installation as CEO back in 2012.

CP on Wednesday said Harrison approached its board to discuss his retirement and “potential related modifications to his employment arrangements that would allow him to pursue opportunities involving other Class 1 railroads.”

Harrison’s retirement, CP said, will include a “separation agreement” with a “limited” waiver of his non-competition obligations to CP. In return, Harrison is to “forfeit substantially all benefits and perquisites he is entitled to receive from CP going forward, including his pension.”

A previously-agreed-upon consulting agreement between CP and Harrison “will not take effect” following his retirement, and Harrison has agreed to sell all shares he owns in CP by May 31.

“I have had a wonderful experience and depart with many friends and with full confidence in Keith’s ability to build on the great success we have enjoyed,” said Harrison, who came to CP following a stint as CEO for CP’s Montreal rival Canadian National Railway (CN).

CN also underwent a change of command in July, when chief financial officer Luc Jobin took over the CEO post from Claude Mongeau, who stepped down for health reasons. –– AGCanada.com Network

The post CP’s revenue, Prairie grain handle down for year appeared first on Alberta Farmer Express.

Ackman, who heads New York-based Pershing Square Capital Management, joined CP’s board in 2012 and served on its finance and corporate governance and nominating committees. He had spearheaded a successful effort to install ex-Canadian National Railway (CN) CEO Hunter Harrison at CP’s helm and bring in new board members.

Ackman “saw an opportunity at CP, worked hard to bring me in to the fold, and delivered for shareholders and the board,” Harrison said in a CP release Tuesday. “Over the last four years we have built a better CP and that model remains in place to continue to deliver not just for shareholders, but for customers and employees.”

Market watchers have seen CP’s reversal of fortunes since Pershing Square’s initial investment in 2011 as a major coup for Ackman. CP on Tuesday described itself as “the worst-performing Class 1 railroad in North America” prior to Ackman’s involvement.

Since then, the company said, it has “generated more than $14 billion in shareholder value and its share price has outperformed the S+P/TSX Composite by 120 per cent through the end of 2015.”

The company on Tuesday named Jill Denham and William Fatt as new board members. Denham chairs the boards of Munich Reinsurance Canada and human resources firm Morneau Sheppell, and is a board member at National Bank of Canada and Kinaxis Inc.

Fatt, a former chief financial officer for CP’s parent firm Canadian Pacific Ltd., is also a board member with the Jim Pattison Group and the Bank of Nova Scotia.

With US$1.5 billion freed up from the sale of its CP stake, Pershing Square has made its first addition to its portfolio in nearly a year, announcing a 9.9 per cent stake in beleaguered Denver-based restaurant chain Chipotle Mexican Grill.

The once-high-flying Chipotle chain, which was tied to E. coli, salmonella and norovirus outbreaks last year and has seen its share price drop 13 per cent since January, saw a jump of over five per cent on Tuesday shortly after Ackman’s involvement was announced.

Ackman said Tuesday the company’s shares, which closed at US$438.45 on Wednesday, up almost six per cent from the previous day, were undervalued and he would be speaking with management. — AGCanada.com Network/Reuters

The post U.S. activist investor Ackman leaves CP board appeared first on Alberta Farmer Express.

“To ensure success during this crop year, the broader supply chain must work together to collectively harness our energy so that the entire Canadian economy can reap the maximum benefit,” said CP CEO Hunter Harrison. “We have been preparing for this crop year for months and we are ready.

“The grain supply chain in Canada, like most efficient supply chains, works best when demand is well distributed throughout the year. The rail supply chain has returned to normal since the extraordinary crop and winter of 2013-14 and CP has continued to move record amounts of grain. This means there is now excess capacity in the supply chain, including thousands of rail cars in storage ready to move the latest crop.”

Meanwhile CN says it’s “fully prepared to move the coming Western Canada grain harvest safely and efficiently over the crop year. CN has the motive power, freight cars and people to do the job.

“At the same time, the entire Canadian grain supply chain, from Prairie elevators to terminals at West Coast ports, will need to work collaboratively and at full capacity throughout 2016-17 to move the crop,” CN spokesman Mark Hallman adds. “CN will be operating 24 hours a day, seven days a week to do its part.

“CN’s operating plan is designed to enhance rail network capacity and to provide efficient hopper car cycle times between origin and destination. With the assets, team and solid operating plan in place, CN is ready to move its share of the coming crop to market.”

Meanwhile Wade Sobkowich, Western Grain Elevator Association executive director, says overall grain shippers are entering this crop year with an optimistic outlook.

“Many conditions are different than those which existed in 2013, such as less demand for shipping in other sectors and an early acknowledgment of the large crop size,” Sobkowich said.

Back in June, the WGEA sent a letter to the railways and the federal government noting that the Prairies were heading toward a harvest between 63 million and 74 million tonnes with more than additional eight million tonnes carry-over.

“We felt it important to provide both railways with as much advance notice of these projections as possible, so you may ensure enough capacity is available to meet shipper demand for the upcoming crop year,” Sobkowich said.

While the comments from CP and CN are encouraging, disconnects remain between the grain companies and the railways. Sobkowich points out while the railways call for 24-7 operation of grain terminals, that “will do nothing more than result in more sitting around and waiting for cars to arrive, and impose an unnecessary cost burden to the entire industry.” The important element is speedy unloading of rail cars once they are delivered.

“Grain facilities do not sit idle unless it is because they do not have rail cars,” he says. “When rail cars are presented at port terminal facilities, with appropriate notice and with a regular and consistent cadence, they are unloaded by terminal operators in a timely way.”

The grain companies communicate their delivery requirements “to both railways on a regular and frequent basis, so the railways have a good understanding of grain shippers’ collective demand on a week-to-week basis.” The companies need to know “in advance the capacity it will be offering in the various weeks, in each of the corridors.”

Grain companies face penalties from the railways if they fail to load and unload rail cars in a timely way, or if they do not use rail cars provided to the elevator, he said.

“This places accountability on grain shippers to perform.”

Currently, the railways are not held financially accountable if they don’t meet their delivery commitments, he added.

Harrison urged the grain companies to make more use of Thunder Bay to relieve the pressure on the Port of Metro Vancouver.

Sobkowich says grain companies make sales in a way that returns as much value for grains, oilseeds and pulse crops as possible and pointed out the delivery route should be a decision made by the shipper, who is the customer of the railways.

“That is not for the railways to dictate, that is for us to decide,” Sobkowich said.

Thus far, federal cabinet ministers say they are monitoring the situation but for now are leaving it to the railways and grain companies to deal with any issues.

The post Railways asking industry to all pull together appeared first on Alberta Farmer Express.

In mid-November, CP disclosed a $28 billion offer for the Virginia-based company, which has rebuffed all advances from the railroad (all figures US$).

CP proposes sending its CEO, Hunter Harrison, to run Norfolk Southern as part of that trust. But the rules of the U.S. Surface Transportation Board require the companies to run independently of each other while it reviews any deal.

The Justice Department said in a statement that it had told the STB that the voting trust would also fail to preserve the companies’ independence during the review.

Calgary-based CP, Canada’s second-largest railroad, has said a merger would result in savings of more than $1.8 billion annually. It did not immediately respond to a request for comment on Friday.

If Norfolk Southern accepts CP’s bid, this would be the first such review by the STB since the regulator’s merger rules were rewritten in 2001. The new rules are tougher and include additional regulatory hurdles.

The letter comes in response to a March 2 petition from CP to the STB seeking a “declaratory order” on its voting trust proposal.

In its statement, the Justice Department said that by effecting a management change in Norfolk Southern, CP’s proposal “is even more pernicious in its failure to preserve competition than a typical voting trust.

“The STB should find that the proposal fails under each prong of the revised regulatory requirement — it creates unlawful control violations and is against the public interest,” the statement said.

Experts had said the voting trust structure CP proposed would face tough scrutiny from the STB.

On Thursday, the U.S. Department of Defense also raised concerns with the STB over CP’s proposed voting trust.

Last Tuesday, Rep. Bill Shuster, chairman of the U.S. House of Representatives’ transportation and infrastructure committee, also stated his opposition to CP’s proposal.

“I do not believe it is in the best interests of the U.S. freight transportation system, railroad employees, rail shippers and the short line railroads,” he said in a statement. “I believe it is time for all parties to move on from hypothetical merger proposals.”

— Reporting for Reuters by Nick Carey in Chicago and Timothy Ahmann in Washington, D.C.

The post U.S. Justice Dept. urges rejection of CP voting trust appeared first on Alberta Farmer Express.

Calgary-based CP said it was now offering $32.86 in cash and 0.451 of a share in a new holding company that would own both Norfolk Southern and CP. To alleviate regulatory concerns, CP said it was prepared to close the transaction using a voting trust (all figures US$).

The proposal was flatly rejected by Norfolk, however, which said it had reviewed a voting trust structure and it did not see this winning approval from regulators who typically take close to two years to review any rail mergers in the U.S.

“Canadian Pacific’s revised, reduced proposal is not only less than what the Norfolk Southern board has already found to be grossly inadequate, it is even more uncertain and risky given the decrease in the cash consideration,” Norfolk Southern CEO James Squires said in a statement on Tuesday.

Shares in Norfolk Southern fell 2.75 per cent to $89 in trade before the morning bell on Tuesday.

U.S. regulators have long been skeptical about rail mergers. Canadian National Railway’s (CN) bid to buy Burlington Northern Santa Fe was blocked by authorities in 1999-2000.

The new holding company would be listed both on the New York and Toronto stock exchanges, CP said.

To ensure against any unlawful control violation, CP said an independent trustee would be appointed to oversee either CP, or Norfolk while in trust. It also said that while in trust, its CEO Hunter Harrison would sever all ties with CP and become CEO of Norfolk, with his No. 2 Keith Creel assuming the helm at CP.

Harrison has built a reputation as a turnaround expert in the rail industry and has dramatically improved CP’s metrics since taking the helm of the company.

CP said even if regulators ultimately decide that a merger will not be permitted, operational improvements will by then have materially increased the value of Norfolk benefiting all shareholders.

“We view this announcement positively as it demonstrates CP’s strong commitment to pursuing the acquisition,” Desjardins analyst Benoit Poirier said in a note, adding that the level of complexity in the CP proposal indicates that a thorough analysis has been performed in order to set up a deal that may be viewed favorably by regulators.

— Allison Lampert and Euan Rocha are Reuters correspondents covering the transportation sector from Montreal and mergers and acquisitions from Toronto respectively. Additional reporting for Reuters by Sneha Banerjee in Bangalore.

The post CP revises offer for Norfolk Southern, rebuffed again appeared first on Alberta Farmer Express.

That might explain why CP, Canada’s No. 2 railway with extensive operations in the U.S., and the No. 3 U.S. railway, CSX Corp., have been talking about combining, even though such a deal would face tough regulatory barriers and alarm customers.

A source familiar with the situation said the two held exploratory talks this month and are contemplating whether to take them further. Both companies have declined to comment, but CSX CEO Michael Ward said on Wednesday that more big U.S. rail mergers could hurt service.

Harrison, 69, the former CEO of Canadian National Railway (CN), has touted the value of consolidation for years. He says creation of a new transcontinental railroad could improve congestion around Chicago, where east- and west-based railways meet and hand off cargo, a process that can take days.

“There is a point, and we are approaching that point right now in Chicago during winter, when you can’t handle all the business. Now what are we going to do in 10 years?” Harrison said at a CP investor event on Oct. 1.

“Do we wait to get in solid gridlock and then address it?”

Harrison has spent his career preaching the benefits of tightly scheduled systems at railways across North America — first at Illinois Central, then at CN, and now at CP. A deal with CSX would add scale to the dream.

The man who hosts “Hunter camps” to personally train workers has never been shy about making sure his script is followed. At CN, a screen installed in his office let him monitor every train in the network, and he was known for calling workers directly to ask why a train was not moving.

“I think it’s always been in the back of his mind, when he said mergers were good — it wasn’t just that mergers in general were good. It was that mergers and thereby extending his system was good,” said rails analyst Anthony Hatch.

Combining CP and CSX to create a transcontinental railway could inspire copycat deals among other Class I rails, transforming the U.S. system. The U.S. Surface Transportation Board, which must approve any deal, might balk.

Hatch said the time is wrong to propose a deal, given shippers’ frustration with railways, perhaps especially with CP, and he sees integrating CSX as complex and risky.

Rodney Kreunen, who was Wisconsin’s state railroad commissioner from 1996 to 2008, recalls a meeting a decade ago at which Harrison said that railroads must combine to be truly efficient: “I’m not surprised that he would be interested in CSX,” Kreunen said.

When Harrison was at CN, but before he became CEO, its 1999-2000 bid to buy Burlington Northern Santa Fe (BNSF) was blocked by U.S. regulators.

Any new deal could kick off years of regulatory wrangling. And with a successor in the wings, Harrison, who has said he will likely not be around by 2018, must get moving.

Five decades

Harrison, who took his first railway job — greasing bearings on rail cars — more than 50 years ago, seemed to be finished his career in 2009 when he ended a six-year stint as CEO of CN.

But when billionaire investor William Ackman’s Pershing Square Capital Management prepared an activist campaign to re-energize CP in 2011, Ackman went looking for Harrison to be his champion. He found him raising show horses in Connecticut.

Harrison makes the trains run on time, moving more cargo with less equipment, and that makes his railways profitable. That was the pitch that convinced CP’s investors to vote in Pershing’s slate of directors, and that made Harrison boss of another Class I railway in 2012.

“If you can apply some of their (CP management’s) precision scheduling railroad techniques to other rails, you’d have a much more efficient system,” Ackman said on Thursday. “I defer to Hunter… but I think he believes that there are combinations that will need to happen.”

Morningstar analyst Keith Schoonmaker in Chicago said Harrison has “set a standard” for railroads in the U.S. “Physically he’s not very big and there is nothing magical about his appearance. But when he starts speaking, you want to listen.”

CP’s operations have improved under Harrison, but the railway, like most of its rivals, has been plagued by problems in Chicago.

“Chicago is a cesspool of North American railroads. It’s a roach motel — anything can go in, nothing can leave,” said Trains magazine correspondent Fred Frailey, who has covered the industry for three decades.

Much of the cargo has to switch railroads in the busy interchange, changing crews. Delays ripple out across the continent.

In a Reuters interview on Oct. 2, Harrison said CP has offered to buy, lease or at least operate the small switching lines that knit together North America’s major railways at Chicago.

“We think we’re pretty good at operating terminals, and we could do a better job.”

— Allison Martell reports on the Canadian rail sector for Reuters from Toronto; Nick Carey is a Reuters correspondent based in Chicago. Additional reporting for Reuters by Paritosh Bansal in New York.

The post As clock winds down, CP’s CEO hunts for his dream deal appeared first on Alberta Farmer Express.