IMO, EHH's legacy will be mixed at best. The idea of operating efficiently is good, the implemetation not so much.
Cutting costs is easy. Building revenue is hard. Which one can you do forever? Which one did railroads (and, unfortunately, most other businesses) choose to adopt? [play Jeopardy music]
Hint, how is throwing away or ignoring your customers a sustainable business practice?
Euclid daveklepper 1. I suggested when HH first arrived at CSX that he would be a great success if he concentrated primarily on obtaining new business. Instead, he conecntrated on cost-cutting and disabling the hub-and-spoke organization of business and the subsitution of his pecision railroading organization, which mean dilberately walking away from certain customers and their business. Was he right? Please provide some specific, detailed examples of Harrison deliberately walking away from certain customers and their business.
daveklepper 1. I suggested when HH first arrived at CSX that he would be a great success if he concentrated primarily on obtaining new business. Instead, he conecntrated on cost-cutting and disabling the hub-and-spoke organization of business and the subsitution of his pecision railroading organization, which mean dilberately walking away from certain customers and their business. Was he right?
1. I suggested when HH first arrived at CSX that he would be a great success if he concentrated primarily on obtaining new business. Instead, he conecntrated on cost-cutting and disabling the hub-and-spoke organization of business and the subsitution of his pecision railroading organization, which mean dilberately walking away from certain customers and their business. Was he right?
Please provide some specific, detailed examples of Harrison deliberately walking away from certain customers and their business.
Again I ask for specific examples of EHH walking away form certain customers and their business.
Decreasing revenues in a raising tide says all that needs to be said.
Never too old to have a happy childhood!
BaltACD Decreasing revenues in a raising tide says all that needs to be said.
Maybe it says what you want it to say.
Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say.
BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say.
Ol'yes but
Euclid, I gave you precisely what you asked for by directing you to the speicifc news wire report about the closing of specific intermodal traffic lanes that CSX was handling. Please go back though this thread and you will find the specific news item.
And then please stop askig the same question. It is rather tiresome and has been answered.
Anyway, the cooperation with the historical group gives hope for the future. Possibly they have been starting to give the same degree of cooperation with their customers. I certainly hope so.
Okay, I will assume that EHH deliberately walked away form certain customers and their business. After stating that, you ask, "Was he right?"
Do you have the answer to that question? If not, do you know where I can find the answer?
EuclidIf not, do you know where I can find the answer?
In EHH's grave.
Thanks to Chris / CopCarSS for my avatar.
Euclid, now you and I are asking the same question, and only the future holds the answer. If NS finds ways to capitalize on increasing truciing costs, finds ways to profitably serve markets (particularly intermodal markets) that CSX/HH walked away from, and shows value to investors greater than CSX, then of course HH was wrong. On the other hand, that is a very big IF, and the future will have the answer.
It will also be interesting to see if CSX re-enters markets taht they walked away from.
Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means?
What do you think it means?
I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said.
Euclid Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means? I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said.
Murphy Siding Euclid Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means? I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said. What's your opinion about CSX having decreasing revenues while thay say business is increasing?
What's your opinion about CSX having decreasing revenues while thay say business is increasing?
I don't have an opinion on that. I would like to see the basis of information that you use to frame the premise that "CSX is having decreasing revenues while they say business is increasing."
Euclid Murphy Siding Euclid Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means? I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said. What's your opinion about CSX having decreasing revenues while thay say business is increasing? I don't have an opinion on that. I would like to see the basis of information that you use to frame the premise that "CSX is having decreasing revenues while they say business is increasing."
Murphy Siding Euclid Murphy Siding Euclid Murphy Siding Euclid BaltACD Decreasing revenues in a raising tide says all that needs to be said. Maybe it says what you want it to say. What do you think it means? I have no idea what it means. In business, revenue rises sometimes and falls sometimes. Sometimes it rises and falls with the tide, and sometimes it rises amd falls opposite the tide cycle. You can't always go by the tide. Pehaps a little more needs to be said. What's your opinion about CSX having decreasing revenues while thay say business is increasing? I don't have an opinion on that. I would like to see the basis of information that you use to frame the premise that "CSX is having decreasing revenues while they say business is increasing." So you're saying they don't?
So you're saying they don't?
No I have no conclusion about it. I am just asking how you determine that CSX is having decreasing revenues while they say business is increasing. Are you quoting something that CSX said? If not, what is the source of the information, and what exactly does it say?
Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment.
daveklepper Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment.
Since the operating ratio decreased, it means CSX made more operating profit on revenue prior to extraordinary items.
Okay, let’s say that is all true. Why is that a problem? If the assents were not needed, as your comment assumes, then certainly it is better to sell them than it is to keep them. If that resulted in a profit, what is wrong with that? What can be wrong with selling an unneeded item and having the proceeds add to the profit of the business?
It seems to me that what most people here want to read into this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets; and if they did not do that, there would be no profit, and that would therefore invalidate EHH business philosophy.
Selling unneeded assets can lead to a future profit in addition to the immediate proceeds of the sale; because selling unneeded assets ends the need to maintain and operate those assets in the future.
Even if showing a profit is not due to increase in customers and traffic, why is that a problem? CSX-EHH have always said that business will slow down until the operation changes are assimilated. And after that, business will return to levels higher than before the changes.
charlie hebdo daveklepper Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment. Since the operating ratio decreased, it means CSX made more operating profit on revenue prior to extraordinary items.
I don't know if that's necessarily true. If the operating ratio went down and revenue went down as well, profits would go down.
The trouble with operating ratio as the prime measure.
Example:
You ship one car and the shipper pays you $100. It costs you $70 to move the car from A to B. OR = 70%.
Another shipper wants to pay you $100 to move a car from A to C. It will cost you $80 to move that car.
Do you take the business? Why or why not?
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Murphy Siding charlie hebdo daveklepper Actually, Euclid, from what I remember, CSX's profits have not declined but increased. The problem is, that the increase in profits has resulted from the sale of assttes not needed under the HH rationalization scheme, and that revenue from operations has declined. This is from memory, and admittadly I have no proof at the present moment. Since the operating ratio decreased, it means CSX made more operating profit on revenue prior to extraordinary items. I don't know if that's necessarily true. If the operating ratio went down and revenue went down as well, profits would go down.
Depends on how much the OP wemt down (profit margin) and how much the revenue declined. I don't have the CSX figures handy, but (purely as an example) if gross revenue declined from $500 mil. to $450 and the OR from 68 to 58, net income would go up from $160 mil. to $189 mil.
Euclid...this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets...
EHH was doing exactly what the vulture investors backing him wanted him to do - extract every possible penny out of CSX, business viability be damned.
If business is going to rebound after the slowdown, don't you want some assets in reserve to handle that increase?
I believe it's been argued here already that one reason business is down on CSX is because it's been deliberately dumped. I'm not sure just how a twice-a-week shipper fits into PSR. Seems like it would be an impediment - which means it has to go. Eventually, you prune all the branches from the tree, and you don't have a tree any more.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
In 2016 CSX had revenue (from operations) of $11,069 mil., operating expenses $7,680 mil. Operating Income $ 3,389 mil. Operating Ratio = 69.4.
In 2017 CSX had revenue (from operations) of $11,408 mil., operating expenses $7,741 mil. Operating Income $ 3,667 mil. OR = 67.9.
Wall Street Movie sums this up-
GEKKO: All together, these men sitting up here [pointing to Teldar management] own less than 3 percent of the company. And where does Mr. Cromwell put his million-dollar salary? Not in Teldar stock; he owns less than 1 percent.
GEKKO: You own the company. That’s right — you, the stockholder. And you are all being royally screwed over by these, these bureaucrats, with their steak lunches, their hunting and fishing trips, their corporate jets and golden parachutes.
CROMWELL: This is an outrage! You’re out of line, Gekko!
GEKKO: Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents, each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can’t figure it out. One thing I do know is that our paper company lost $110 million dollars last year, and I’ll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents.
tree68 Euclid ...this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets... EHH was doing exactly what the vulture investors backing him wanted him to do - extract every possible penny out of CSX, business viability be damned. If business is going to rebound after the slowdown, don't you want some assets in reserve to handle that increase? I believe it's been argued here already that one reason business is down on CSX is because it's been deliberately dumped. I'm not sure just how a twice-a-week shipper fits into PSR. Seems like it would be an impediment - which means it has to go. Eventually, you prune all the branches from the tree, and you don't have a tree any more.
Euclid ...this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets...
Well you say that, but what is your proof that vulture investors backing EHH wanted to extract every penny out of CSX? I have heard it so many times that it is beginning to sound like a conspiracy theory.
I understand that EHH showed up with a plan to trim the fat from the operation, get rid of the dead wood so to speak. That requires job reductions, and anybody in management proposing that will be hated from here to eternity. Maybe it is no coincidence that the entire argument against EHH sounds just like a labor grievance, which tend to sound like a political debate.
If we are to believe this anti-EHH script, there was absolutely no dead wood to cut, and so if anything was cut, it is a sign of vulture investors looting the company. If it were a free lunch for vulture capitalists, why are they just picking on CSX?
Also, I can't help but notice that you carefully quoted me above to take my comment out of context in order to completely reverse its meaning to make it sound like I too am rabidly anti-EHH.
Here is what I said in its full context (responding to Dave Klepper):
"Okay, let’s say that is all true. Why is that a problem? If the assents were not needed, as your comment assumes, then certainly it is better to sell them than it is to keep them. If that resulted in a profit, what is wrong with that? What can be wrong with selling an unneeded item and having the proceeds add to the profit of the business?
It seems to me that what most people here want to read into this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets; and if they did not do that, there would be no profit, and that would therefore invalidate EHH business philosophy."
You have quoted only the part in bold, which reverses the meaning of what I actually said.
You all prefer to debate fantasy. The audited statements show greater profits. Of course Balt thinks everything is fake.
Euclid Here is what I said in its full context (responding to Dave Klepper): "Okay, let’s say that is all true. Why is that a problem? If the assents were not needed, as your comment assumes, then certainly it is better to sell them than it is to keep them. If that resulted in a profit, what is wrong with that? What can be wrong with selling an unneeded item and having the proceeds add to the profit of the business? It seems to me that what most people here want to read into this scenario is that a lack of profit invalidates EHH business philosophy, and to get around that, CSX is cheating by showing a profit from the sale of assets; and if they did not do that, there would be no profit, and that would therefore invalidate EHH business philosophy." You have quoted only the part in bold, which reverses the meaning of what I actually said.
charlie hebdo You all prefer to debate fantasy. The audited statements show greater profits.
You all prefer to debate fantasy. The audited statements show greater profits.
Of course, they do! That's the whole idea - increase the bottom line and take the profits.
I think what most people here are saying is that the method of increasing the bottom line is to gut the operation. Sell off anything that isn't nailed down and count the proceeds as profit.
Eventually you run out of stuff that isn't nailed down, so you shed business so you have more excess capacity - to sell off.
The flip side would be to make an effort to grow the business (instead of driving customers away) and go for long term growth.
While the evidence is chiefly anecdotal here on the forum - there's still a feeling that the reality of EHH's tenure was to loot and run.
charlie hebdo You all prefer to debate fantasy. The audited statements show greater profits. Of course Balt thinks everything is fake.
The profits can't be fake because then there would be no evidence of investors looting the company.
tree68 charlie hebdo You all prefer to debate fantasy. The audited statements show greater profits. Of course, they do! That's the whole idea - increase the bottom line and take the profits. I think what most people here are saying is that the method of increasing the bottom line is to gut the operation. Sell off anything that isn't nailed down and count the proceeds as profit. Eventually you run out of stuff that isn't nailed down, so you shed business so you have more excess capacity - to sell off. The flip side would be to make an effort to grow the business (instead of driving customers away) and go for long term growth. While the evidence is chiefly anecdotal here on the forum - there's still a feeling that the reality of EHH's tenure was to loot and run.
The 2017 report shows greater profits on the operation. The looting and selling off (if that is true, let's see a list of assets sold) that some have a "feeling" about has nothing to do with that profit. One year doesn't tell much. Time will tell. The 2018 report should give a clearer picture as to whether the strategy of pruning high cost, low revenue, i.e., marginal operations is working. And whether there is an effort to find new, more profitable business or not.
Our community is FREE to join. To participate you must either login or register for an account.