CN CEO thinks mega-mergers are in the future

Trains Magazine General Discussion
1

BNSF, NS, CN, KCS merge into American National. UP, CP, CSX merge into - well - Union Pacific.

IMHO, the railroads should stay where they are and keep their separate identities.

This is from trainorders. Don’t have a link to the actual news article. The poster on trainorders says it’s an article written by Mark Wilson on the Traffic World website.

WASHINGTON, D.C. — Hunter Harrison, president and CEO of Canadian National, said the likely future for North American railways is that two über railways will replace Union Pacific, Burlington Northern Santa Fe, CN, Canadian Pacific, CSX Transportation and Norfolk Southern Railway.

During a keynote speech to the third annual Canada Maritime Conference, held in Vancouver on Sept. 30 and Oct. 1, Mr. Harrison, 63, promised to unveil his proposed design before he relinquishes control of the most efficient Class One railway on the continent.

He said the six will coalesce into two, but the result will be unlike past merger outcomes. “I have a different model but I am not prepared to unveil it yet. But before I retire I will put that model on the table,” he said.

Mr. Harrison is proposing an end game to industry consolidation at a time when CN is having trouble winning regulatory approval to take over a 150-mile shortline skirting Chicago.

Suburbanites, with what Mr. Harrison termed a NIMBY (not in my backyard) mentality, are trying to block CN’s $300-million bid to acquire a major portion of the Elgin, Joliet & Eastern rail line.

“There is unprecedented political pressure being exerted on this transaction,” he said, while avoiding mentioning that then presidential candidate and now president-elect Barack Obama had sided with residents who don’t want increased train traffic. Mr. Harrison said that maybe the issue would “settle down after the presidential election.”

A final round of giant railway mergers would make it easier to implement

2

Yeah right, must’ve been a CN guy writing that. No railroad that screws over its customers, puts employees in uncontrollably dangerous situations, and forgets about track maintenance, at least in my part of the woods, could be called that. And thats facts, not a hate on CN.

3

No facts, just hate on the CN. It is well known that the CN has the lowest operating ratio of the class 1s.

4

I don’t see any of the class one railways merging with each other anytime soon. I can maybe see the KCS possibly merging into a class one railway, a good chance of that being CN, but I can’t see any BNSF/CN or UP/CSX mergers anytime soon.

5

I agree! And I also do not see the FRA approving any “mega-merger” in the foreseeable future.

6

Lets hope Mr Harrison retires first so he cant run one of these new mega railroads.

7

My guess was he was referring to CN’s fairly recent employee fatalities due to lackof maintennance.

From wikipedia:

[quote]
In December 1999 the Ultratrain, a petroleum products unit train linking the Saint-Romuald (Quebec) Ultramar oil refinery with a petroleum depot in Montreal, exploded when it derailed and collided with a freight train travelling in the opposite direction between Sainte-Madeleine and Saint-Hilaire-Est, south of Montreal, killing the crew of the freight train. The train derailed at a broken rail caused by a defective weld; The report by the Transportation Safety Board of Canada called into question CN’s quality assurance program for rail welds as well as the lack of detection equipment for defective wheels. In memory of the dead crewmen, two new stations on the line have been named after them (Davis and Thériault).

On May 14, 2003, a trestle collapsed under the weight of a freight train near McBride, B.C., killing both crew members. Both men had been disciplined earlier for refusing to take another train on the same bridge, claiming it was unsafe. Subsequent inquiry revealed that as far back as 1999, several bridge components had been reported as rotten, yet no repairs had been ordered by management. Eventually, the disciplinary records of both crewmen were amended posthumously.

On August 5, 2005, a CN train had nine cars derail on a bridge over the

8

What comes first? Mega mergers or 100MPH freight trains?

9

These CN CEO comments sound completelyt out of context, and sort of like they’re out of the 1890s - a true monopolist at work. Good thing is he seems clueless about the political environment - if he thinks the next administration is going to give a green light to mega mergers and lower regulation, he’s smoking something. Freight customers are already complaining about rail rates. If anything, you’re going to see Oberstar’s commitee get increased power and influence, and thus more regulation and wariness about corporate railroad power than less.

I certainly hope they get rid of the “paper barriers” that prevent some shortlines from engaging with the business scope that they could.

KCS of all them, I could see a last merger. Especially since the economy stinks and what seems to me to be their bread-and-butter, imports from Mexico, could be a short-term financial liability.

10

It’s about time that Uncle Hillbilly gets pee tested. Whatever he does behind that closed and bolted door to his den has too often put him into an altered state of mind. In fact he should have his head scanned to see what’s effecting the brain. There has to be a very serious medical problem that’s behind his antisocial behaviour and delusional ranting. But he still has his fans.

11

Just a hate eh?

Is CN treating their employees like crap hating?

Is CN trying to make Missabe engineers run ore trains down Proctor hill without dynamic braking hating?

Is CN screwing over Minntac by not delivering limestone on time hating?

Is CN almost cornfielding two Missabe trains and at least one on the former WC hating?

Is CN allowing their employees (supervisor actually) to verbally berate an engine crew AND passengers, AND employees of a Depot that had no bearing whatsoever on the incident, so much that it was in the paper, all because their employees has no idea what “holding a warrant” and “we will be breaking radio contact” mean, hating?

Is CN having power troubles on the Missabe due to their own fault hating?

Is CN’s lack of track maintence which lead to derailments on a railroad that previously had maybe a derailment every year or so hating?

Is the fact that on CN 54 per cent of inspected locomotives had safety defects, and more than one-third violated the Labour Code hating?

Or that 26 per cent of inspected level crossings had inadequate sightlines, hating?

How about employees feeling pressured, and current practices allowing locomotives to continue in service despite defects. Is that hating?

Maybe the fact that employee morale is at an all time low isnt CN’s fault either…

12

I like trains but don’t like all railroad management practice. But I worked on the RR for a few years,so I saw both sides.

13

Maybe 100 MPH intermodal doublestacks. But that’s about it.

14

Doesn’t Mr. H. realize he might “jaw” his RR (CN) out of existence with his kind of talk?

I don’t think that kind of shrinkage will come to pass, actually. FRA has no reason to permit and and several to keep the status quo.

15

Who knows maybe Hunter Harrison and Gov Blagolevich of IL are poker buddies. They both think that they are above the law at times they BOTH SWEAR THEIRS IS THE ONLY WAY THAT IS RIGHT TO RUN EITHER A RR HH OR A STATE. Both inspire fear instead of loyalty in their workers and BOTH SEEM TO BE SOCIOPATHS AT TIMES. Only differance I can see between the 2 is Harrison is baukrupting his company by deferring maintance ala the PennCentral and we all know how well that worked. Blago is bankrupting IL the old fashion way through CRONYISM either you are his friend give him campaign cash or your projects GETS NO FUNDING. Heaven forbid you speak out against either of them Harrison has a history of axing those disloyal. Blago just closes needed Prisons State Parks and other facilities if you vote against him.

16

Regardless of your points, many of which are subjective, the CN is the most effiicent railroad when measured by operating ratio.

17

Is it really worth it at the price it comes at?

18

That is a different conversation all together!

19

Remember that Hunter Harrison has to answer to the Board of Directors and the shareholders first.

20

Is there even a single person out there who sees this as possibly happening? (Doesn’t even hear crickets)