It appears likely that EHH cannot fix the problems of his own making at CSX.What happens now? I would really like to hear from those of you who are knowledgable in the law on this matter.
Will the STB intervene in some big way, such as taking over the operations at CSX?
Will congress seize control of CSX like they did the whole industry during WW1?
Will congress move to break up CSX and even restore some lines that were abandoned to introduce more competition?
I understand that the republicans,who control congress, are loath to regulate big business, but let’s not forget that the CSX customers are big businesses too, with there own influence over congress. Let me remind everyone that I am not a lawyer. That’s why my questions may sound silly. Some of you lawyers out there, or others who are knowledgable in the law,please chime in. Thanks in advance.
Things won’t get that bad. As business is lost, the remaining business will be handled OK. This will be the most profitable business. Whether it will be enough, despite reduced costs, to make investors happy is another matter.
Specific service problems at specific locations that are not improved, and I am predicting that eventually there will be none of these, can be handled by directed service orders. I believe this has been done at least once in the past. This means forcing CSX to allow another railroad on its property, and the evidence to preduce the need for directed service is not likely to arise.
I do not think that in the long run, investors will be happy with HH’s performance, and I think a rebuilding administration will take over eventually, with top people moving from other Class-Is.
Don’t see any of those alternatives being enacted.
However, this could be the ‘wake up call’ that the Institutional Investors that voted EHH into the CEO position need to take have their board members force EHH out of the CEO position and onto the unemployment lines.
If you were to ask the proverbial “man on the street” I doubt that one in twenty knows that CSX has a problem or who EHH is. Under those circumstances, Congress is not going to act.
The regulators will hold hearings that will be ignored by the media at large. I don’t think the STB is any more eager to act in an meaningful way absent public support than is Congress.
A solution you didn’t list is EHH’s replacement. Perhaps someone else would be a better choice to dig their way out of the current situation. This could occur through large investors realizing there is a problem and acting or his deteriorating health making continuing impossible.
Finally, maybe he is right and CSX has turned the corner – the fall months will see marked improvement. I don’t think that likely but not impossible.
If the RR improves this week and can keep the momentum, then nothing much will happen to EHH and CSX.
If things don’t improve, or slide back down hill by the end of the month, the I’d bet the CSX board shows EHH the door. The external noise and pressure will be too great.
I give CSX about a one in three chance of making much progress this month. They just changed too many things too fast to know where they really are and need to be with resources.
Unfortunately I suspect his $84M is locked in. Maybe the rest of the shareholders could seek to get it from Paul Hilal that created the mess with his Mantle Ridge hedge fund.
Indeed, the metrics really aren’t that bad, and we’re already seeing signs of improvement. You can tell that by mid-August that EHH and crew realized that they had done too much to quickly, so stopped forward progress on their plans and backed up a bit in some areas to let everything else catch up.
I’m still seeing consistent “EHH is going to kill the company” posts, comments, etc, and I hate to say it directly but it is a pretty misinformed opinion. One man cannot kill a multi-billion dollar franchise which runs not off its brand but rather its assets, like a railroad does.
Its very clear that EHH and his team miscalculated in their moves. That is a mistake.
But since they’ve begun to shown that they’re learning from their mistakes, the STB, and for now the investors, are unlikely to throw them from the boat…at least as long as this trajectory continues.
No, CSX isn’t going to die. No, EHH is not evil. And no, the railroad is no longer in the downward spiral.
I’ve been watching this situation closely and can equate it to the meltdown when UP and SP merged. There is a period of adjustment both sides must acclimate to. OTOH, I see Harrison trying to make too many changes too quickly and producing confusion on the part of employees and at least temporarily reduced services to customers. While his gme plan may work out in the end in the mean chaos will rein accompanied by both delayed and lost shipments.
CSX is a different railroad than Harrison has run in the past. Whether he suc
In the beginning, it appeared that EHH (along with his handlers) was well on his way to running CSX straight into the ground.
As noted, it looks like they’ve seen the error of their ways, at least as it applies to how fast they were making changes, and have, indeed, slowed down. That they are taking a second look at some of their earlier pronouncements (reportedly the decision to close the hump at Selkirk is getting a review) is encouraging.
OTOH, I was in Utica (NY) the other day when a westbound manifest ambled by. There was a little bit of everything in the consist (behind four locomotives), and they didn’t appear to be in much of a hurry. Used to be even the manifests rolled through there at a solid 50 per.
EHH made a lot of enemies, if you will, on his arrival. It remains to be seen if he can win some of them back over with solid progress as things progress.
There’s the distinction I was trying to make but you seem to have missed: Sears and Kmart have value in their brand and sales. CSX’s value is in their assets.
Transportation - and in a single-entity business where a natural monopoly exists like a railroad - is a business that is so hard to single-handedly kill.
I suspct you look at the man who controls Sears/K-Mart.
Didn’t that guy start by mounting a dead horse and went from there?
There’s the distinction I was trying to make but you seem to have missed: Sears and Kmart have value in their brand and sales. CSX’s value is in their assets.
Transportation - and in a single-entity business where a natural monopoly exists like a railroad - is a business that is so hard to single-handedly kill.
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EHH, Paul Hilal and Mantle Ridge are doing their best to make CSX a financial cripple when they dump their stock and control. CSX won’t be dead, it will have had the financial life sucked out of it.
Your claim that “EHH, Paul Hilal and Mantle Ridge are doing their best to make CSX a financial cripple when they dump their stock and control. CSX won’t be dead, it will have had the financial life sucked out of it” is total and utter nonsense. Mantle is long on CSX, they need price to rise, not fall.
Suck out the cash reserves, let maintenance get deferred and suck out what isn’t spent as maintenance in dividends.
Hedge Funds are not long term players in a compay - suck up all the available and liberatable cash, keep pumping up the stock value up until the dump. Then get out and get out fast!