Who were the 10 best railroad CEOs? (Part 1)

Posted by Fred Frailey
on Friday, October 16, 2009

Who indeed? At the recent meeting of the Lexington Group in Transportation History, Jim McClellan and David DeBoer grabbed this braintwister and wrestled it to the ground. They each recited their own list of winners (they agreed on five names and went separate ways on the other five).
 
I called this a braintwister, because how do you even go about this task? No slouches in the brains department, Jim (retired as Norfolk Southern’s corporate strategist) and David (retired as president of Greenbrier Intermodal) laid down some necessary guidelines. First of all, these people had to have run a railroad after 1960 and cannot be currently in that position. They were thinking Class I presidents only, but I would broaden the field.
 
That said, David and Jim listed the challenges that railroad chief executives faced in the past half-century. The best CEOs surmounted several of them.
 
New markets and distribution systems. Coal and grain, once a carload business, are now almost exclusively handled by unit trains. Multilevel cars for new automobiles opened a whole new line of business for railroads. Intermodal has grown from a little over 1 million units a year to about 11; once thought to be unprofitable, it is now decidedly so. Which CEOs were the pioneers in these new markets or came later to exploit them brilliantly?
 
Technology and productivity. The list of advancements here is long: safety, high-capacity cars, unit trains, traffic-control systems, mechanized track maintenance, reduced crew sizes. Each of these areas had trailblazers in the CEO’s office.
 
Finance. McClellan remembered asking at one place he worked about the capital budget for terminals. “Oh, he [the CEO] carries that around in his head.” Jim once asked a chief engineer how he allocates his capital budget. “Well, when Mr. X takes his business car over a branch line and gets a rough ride, we have to get right in there and fix it.” And he related the story of a consultant hired to build the case for abandoning a branch line. While hi-railing the doomed line, he met a tie and surfacing gang working the other way. You could also argue that those railroaders who acted most aggressively to minimize their passenger services in the 1960s showed financial leadership. We’ve come a long way in allocating capital, but some railroad executives did it better than others.
 
Industry structure and public policy. The Class I population has gone from scores to a mere seven. Structurally, they’ve slimmed down; gone are the conglomerates and unrelated businesses. Which CEOs did mergers best? For that matter, which rationalized their branch line networks in imaginative ways? Deregulation (actually, reduced regulation) led to enormous efficiencies. Who helped bring us deregulation? And who made the best use of it?
 
These are the criteria Jim and Dave wanted their audience to consider as we each made our own lists. Okay folks, start thinking and make a list. I’ll be back with their picks, and my own as well. — Fred W. Frailey
 

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