Executive duo last served together at Canadian National
http://trn.trains.com/news/news-wire/2017/10/26-csx-shake-up
We should have known something was a Foote!
[:-^]
I don’t think there’s a “groan” emoticom…
Cindy Sanborn (daughter of Dick Sanborn, a well-respected operating man back in his day) - been at CSX for many years - will resign. If you look back at the beginning of this debacle, you’ll see I wondered what would happen to her and when. That shoe has now dropped.
The replacement seems like a mere “yes-man” - a lawyer with no significant operating experience. But that won’t matter - the CEO is essentially functioning as the COO himself, so competency is not a requirement for the position, evidently. [:-,]
- PDN.
My understanding is that Ms. Sanborn is the largest non-institutional holder of CSX stock. Might this be the start of a hedge fund counter attack with Ms. Sanborn getting a number of financial types together to wrest control away from Mantle Ridge and EHH.
My understanding is that Mantle Ridge does not ‘own’ a controling interest but has leveraged control. Leverage can and does change over time.
Frankly, I hope Ms. Sanborn does just that and is successful. I do not believe HH’s version of precision railroading is good for CSX because it throws away business that could be profitable to fit a preconceived notion of how the railroad should be run. There is no evidence that a real study was made of CSX operations before drastic changes were made. The HH model works well with a simple rout structure, but not with a complex one. CSX was on the road to the most efficient way of handling a comoplex rout structure’s traffic, and HH stopped this path to success after in had produced some gains ini efficiency and profitability but before it could be fully realized.
Note the new CN-NS patnership. Loss of traffic to CSX will result from this.
That leverage goes a long way in explaining the hedge fund’s aims. If the stock price doesn’t go up significantly, the fund will take a hit paying off the exorbitant interest rates on the loans taken out to buy the shares.