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Activist investor disputes Canadian Pacific letter
Who runs the railroad and who has the greatest vested interest in it’s success, and why the resistance to change? Especially when the state of affairs objectively observed indicates change is needed? Every indication is this road wants to exchange success for business as usual, territoriality for a fresh perspective. All of this defies logic so perhaps logic has nothing to do with their resistance, or so it seems.
Having read the comments in the Toronto paper about HH and his stay at CN , and the conversations I have had with guys on the ground at other Canadian railroads about his way of doing things, I hope CP board is very careful about what they really want in a new executive. Would like to see comments from some people at CN who have experience with HH and his actual non statistical performance.
Let’s see, a man who thinks that employees and track are both disposable commodities. I sure hope that he doesn’t get hired. Let’s just say CP is smart in not wanting to hire him. CN has lost numerous double track sections on high-tonnage lines, and the ICG lost numerous mainlines (to abandonment or sale) which have now become extremely successful short lines, regional railroads, or parts of other class I railroads (examples: the line to Louisville, KY is now the successful regional railroad Paducah & Louisville, over 200,000 carloads annually, or over 20 million gross tons; Indiana Rail Road, their former line to Indianapolis, which runs somewhere around 14 million gross tons of traffic; the UP Chicago-St. Louis line, which is now becoming a double-track, high speed Amtrak corridor as well as (starting in this year and 2013) a major freight corridor with roughly 24 trains per day soon to be traversing the line; and finally, the KCS Meridian Speedway, the former IC line from Meridian, MS through Jackson to Shreveport, LA, which is now seeing over 20 trains per day and over 20 million gross tons of traffic annually (soon to be more) as one of the shortest, most efficient portions of the southern cross-country route, connecting eastern ports with Louisiana, Texas, and beyond. Clearly HH has been doing something WRONG.
This is really about Ackman and his attempt to create a fast share-price swap using Harriman as the straw-dog to show that he actually has ideas about improving CP.
As far as the CN/CP relative success - much of the difference is age and luck. The CP mainline crossing the C Rockies at high cost and grade - the CN much further north at a much lower crossing and (this is the luck) just happening to be next to what a century later became the biggest new coal mines in North America!
Harrison would be a bad fit for CP, and Ackman is only concerned about much money he can make for himself in the short term, not CP’s long term viabilty. CN under HH showed little concern for customers or employees. When Wisconsin Central was taken over by CN the supply of cars for small shippers dried up. For example, Timber Products (operating in Wisconsin and Upper Michigan) was unable to get cars, forcing them to ship by truck. It would also mean the end of CP’s heritage programs.
When CN took over the Wisconsin Central, the small shippers immediately had their car supply cut. Timber Products, for one example, had to return to shipping by truck because of CN’s refusal to supply cars. HH has little regard for employees either. Plus you can say goodbye to CP’s heritage progarms as well. Hopefully they can keep him out. Ackerman’s only concern is how much money he can make in the short term, not in CP’s long term viability.
When CN took over the Wisconsin Central, the small shippers immediately had their car supply cut. Timber Products, for one example, had to return to shipping by truck because of CN’s refusal to supply cars. HH has little regard for employees either. Plus you can say goodbye to CP’s heritage progarms as well. Hopefully they can keep him out. Ackerman’s only concern is how much money he can make in the short term, not in CP’s long term viability.
From a railfan point of view, Hunter Harrison would not be a good choice. From a business point of view, he’d be a great one. CP is a laggard from a business perspective.