Hunter Harrison and corporate culture

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Posted by oltmannd on Monday, March 20, 2017 4:30 PM

schlimm

 

 
oltmannd

 

 
schlimm

 

 
oltmannd

schlimm: EHH knows a lot more about management than ANY of us. Wait and see.  If CSX were so efficient already, why is its OR so high?

It's OR isn't high.  Actually, it's at an all time low over the past couple years.

 

 2016 CSX operating ratio = 69.4 percent.  2016 CP record-low operating ratio = 58.6 percent

 

 

 

 

Apples and oranges.  Length of haul, traffic mix, highway competition, Labor rate with fringe.  All different.

What was CSX's OR in the 1990's when EHH started doing his thing?  Around 90.  Now below 70.  20 point drop in 20 years.  Just lucky?

 

 

 

In 2010, prior to EHH, CP's OR was 81.3. Over a 20 point drop in 5.5 years.  Just lucky?

 

No.  He just did what CSX, NS, BNSF and UP did - which is the same as what he did at IC and CN.

It's all done.  Everywhere.  Everyone has done PCS.  EHH gets credit for doing it first and doing it the most.  But, there's no "there" there at CSX to do!

 

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by Murphy Siding on Monday, March 20, 2017 7:38 PM

PCS?

Thanks to Chris / CopCarSS for my avatar.

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Posted by cprtrain on Thursday, March 23, 2017 1:04 AM

Ulrich

At CN Claud Mongeau came after EHH and Luc Jobin recently took over from Mongeau due to the former's health issues. Both of EHH's successors at CN could arguably be called planters, in keeping with the above analogy. There's a time to cut and there's a time to plant.. and as far as business goes there are CEO's who specialize in one or the other. Rarely does one find an individual who is equally adept at both. Some CEO's are agents of rapid change while others are more mainstream caretaker types who grow the business without rocking the boat too much. We need both types. 

 

True that there are different management styles. HH was a disaster at CP. They lost some major accounts in the last few months due to poor service. He ran the railroad into the ground, destroyed service and morale. It will take CP a decade to recover. The employees who were sacked have had their lives destroyed. May he rot in hell.

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Posted by MarknLisa on Monday, March 27, 2017 4:54 PM

Interesting article in Railway Age about live in a post-EHH Canadian Pacific

http://www.railwayage.com/index.php/freight/class-i/precision-railroading-with-a-humane-face.html?channel=50

 

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Posted by SD70M-2Dude on Monday, March 27, 2017 7:37 PM

cprtrain

True that there are different management styles. HH was a disaster at CP. They lost some major accounts in the last few months due to poor service. He ran the railroad into the ground, destroyed service and morale. It will take CP a decade to recover. The employees who were sacked have had their lives destroyed. May he rot in hell.

+1

Greetings from Alberta

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Posted by tree68 on Monday, March 27, 2017 8:06 PM

cprtrain
He ran the railroad into the ground, destroyed service and morale.

And this goes back to his want/need to wring every last dollar out of the railroad - and into the hands of the investors.  

 

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Posted by oltmannd on Tuesday, March 28, 2017 10:20 AM

Murphy Siding

PCS?

 

Let's try PSR...Stick out tongue

 

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by Los Angeles Rams Guy on Wednesday, March 29, 2017 9:53 PM

SD70M-2Dude

 

 
cprtrain

True that there are different management styles. HH was a disaster at CP. They lost some major accounts in the last few months due to poor service. He ran the railroad into the ground, destroyed service and morale. It will take CP a decade to recover. The employees who were sacked have had their lives destroyed. May he rot in hell.

 

 

+1

 

+1 from me as well.

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Posted by Paul_D_North_Jr on Wednesday, April 12, 2017 8:55 AM

I can't quickly find the thread that's mainly about about E. Hunter Harrison being hired by CSX, so I'll post this here as being closer than the other 2 current ones: 

John Fishwick Takes on Railroad Mogul in “CSX Train Robbery” 

http://baconsrebellion.com/john-fishwick-csx-train-robbery/ 

Short version: It's about lawyer John P. Fishwick, Jr. (yes, a son of former N&W President John Fishwick) objecting to EHH"s pay package, calling it "repulsive" and "exhorbitant", having a Facebook page on it, etc.:

"He has taken up a new cause, blocking the out-sized compensation package of Hunter Harrison, a 72-year-old executive hired by CSX Corp. As a CSX shareholder, Fishwick objects to the company reimbursing Harrison $84 million in compensation he forfeited by leaving Canadian Pacific." 

- PDN. 

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Posted by samfp1943 on Wednesday, April 12, 2017 9:16 AM

Paul_D_North_Jr

I can't quickly find the thread that's mainly about about E. Hunter Harrison being hired by CSX, so I'll post this here as being closer than the other 2 current ones: 

John Fishwick Takes on Railroad Mogul in “CSX Train Robbery” 

http://baconsrebellion.com/john-fishwick-csx-train-robbery/ 

Short version: It's about lawyer John P. Fishwick, Jr. (yes, a son of former N&W President John Fishwick) objecting to EHH"s pay package, calling it "repulsive" and "exhorbitant", having a Facebook page on it, etc.:

"He has taken up a new cause, blocking the out-sized compensation package of Hunter Harrison, a 72-year-old executive hired by CSX Corp. As a CSX shareholder, Fishwick objects to the company reimbursing Harrison $84 million in compensation he forfeited by leaving Canadian Pacific." 

- PDN. 

 

       Seems as if Mr. Fishwick is about to fling a polecat into the middle of the family picnic.  Whistling 

    [Just what this 'affair' needs, another side-show.]Bang Head

Sam

 

 


 

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Posted by Paul_D_North_Jr on Wednesday, April 12, 2017 10:35 AM

Maybe more like a cowboy interrupting a 'train robbery' - might not win, but they'll know he was there.

Wonder if a sheriff-type will eventually show up . . . ? 

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Posted by blue streak 1 on Wednesday, April 12, 2017 12:44 PM

There are several unknowns about what Hunter is doing.  Here on the A&WP subdivision CSX is installing PTC satellite antenna and other equipment from Palmetto - LaGrange at least.  CSX is running very fast trains with extra power on front to maintain speed and then very slow trains.  How this affects PTC implementation is unknown ?

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Posted by Shadow the Cats owner on Thursday, April 13, 2017 6:04 AM

With the PTC install the railroads have a deadline to make and even EHH and his disdain for capital improvements can not stop that one from happening at all.  He attitude so reminds me of and this one is a current CEO the United CEO and how they have handled the passengers issues recently.  He is tone deaf to everything that happens to his railroad in his pursuit to his holy grail of a below 60% OR.  He could care less of customer complaints labor issues just drive it down then I'm out of here and leave the pieces for the next guy to pick up. 

 

 

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Posted by Paul_D_North_Jr on Thursday, April 13, 2017 2:39 PM

Back around 2008, the EJ&E was acquired by CN.  Some pretty stringent monitoring of grade crossing signals and traffic impacts of the additional trains were required, as a result of either the environmental studies and/ or STB conditions imposed as a result of local community opposition (Barrington comes to mind, IIRC).  

After a while (2010 or so) it was discovered that CN was either not doing that properly, or was not correctly reporting or altering the data/ results.  The STB got pretty upset at that, to the point that it imposed a (nominal) fine and a consulting firm (HDR, IIRC) was appointed to audit and validate those results.  Again, as I recall, the corporate culture was implicated as one cause or factor in that happening.

EHH was the CEO of CN at the time. 

Here's the link to the thread here on this at the time -

"CN Fined for under reporting delays to auto traffic on EJE": 

http://cs.trains.com/trn/f/111/p/184327/2016253.aspx#2016253 

- PDN.  

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Posted by Bruce Kelly on Thursday, April 13, 2017 3:33 PM

Goes hand-in-hand with what one industry official told me last week regarding EHH's time at CN:

"CN had a solid infrastructure with 6500’ sidings every 8-10 miles, makes it easier to rip one up and relay it to create 12000’ sidings every 15-20 miles."

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Posted by Paul_D_North_Jr on Thursday, April 13, 2017 6:23 PM

That would be consistent with a philosophy of trains twice as long and half as frequent ~= same volume. 

- PDN. 

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Posted by Ulrich on Thursday, April 13, 2017 6:37 PM

..at a lower cost

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Posted by cx500 on Thursday, April 13, 2017 11:07 PM

Creating 12,000' sidings is rarely as simple as using the rail from the 6,000' siding 7 miles away.  Geography in the form of rivers, hills and such can make creating a wider grade prohibitively expensive before achieving that length.  In easier terrain, usually extensively farmed, grade crossings every mile or so are typical.  At least one, maybe two, will have to be closed so a train waiting for a meet won't have road traffic blocked.  Getting permission for the closure from the local authorities despite protesting locals takes much time and effort.

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Posted by SD70M-2Dude on Friday, April 14, 2017 1:15 AM

Bruce Kelly

"CN had a solid infrastructure with 6500’ sidings every 8-10 miles, makes it easier to rip one up and relay it to create 12000’ sidings every 15-20 miles."

Paid for by the Canadian taxpayer I might add.  And the 15-20 mile spacing of sidings turned out to be a royal headache after business spiked and the "half-as-frequent" longer trains mentioned by Mr. North became just as frequent as the old ~6,000' ones, only with half the sidings to put them in...

Goes back to believing in the future of your business, and your ability to attract more of it.

Greetings from Alberta

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Posted by Bruce Kelly on Friday, April 14, 2017 8:25 AM

Grade crossings, including farmer or private crossings, aren't always closed when they're in the way of sidings. Take a look at just one sliver of BNSF's Northern Corridor, the ex-GN main line segments between Wenatchee and Spokane, WA, and between Sandpoint and Bonners Ferry, ID, and you'll find the majority of passing sidings have one, two, and in some cases three road crossings through them. And yes, these create considerable headaches for operations. First train to arrive for a meet typically holds back until the other train is close, but if the clearing train has a fleet coming against it or something hot coming from way behind (like Amtrak or a Z9), it may have to pull into the clear and cut crossings. Much time lost doing that and patching things back together, especially when a ride isn't available to help. In the case of EHH's roads (he also pulled up sidings in order to extend others at CP), I can't tell you whether they forced the closure or rerouting of some crossings, or forced CN or CP to engineer their siding extensions to avoid blocking crossings.

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Posted by cx500 on Friday, April 14, 2017 11:15 PM

Holding back to avoid blocking crossings is usually done by slowing down enough so the meet happens promptly.  Stopping and waiting before reaching the siding frequently means blocking other crossings.

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Posted by Bruce Kelly on Friday, April 14, 2017 11:43 PM

The "blocking other crossings" scenario would apply to a couple of the approaches to sidings between Sandpoint and Bonners Ferry, but not all. And out there on the Columbia River Sub between Wenatchee and Spokane, coming to a complete stop short of the siding will, in most instances, mean nothing more than leaving the train standing in the middle of some coulee or wheat field or patch of forest until the dispatcher tells them, "that other guy's getting close...start pulling in."

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Posted by cprtrain on Saturday, April 15, 2017 8:52 PM

Harrison is wearing the black hat and ishwick is wearing the white hat. I hope that the good guy wins. Harrison is nothing but a carpet bagger.

Paul_D_North_Jr

I can't quickly find the thread that's mainly about about E. Hunter Harrison being hired by CSX, so I'll post this here as being closer than the other 2 current ones: 

John Fishwick Takes on Railroad Mogul in “CSX Train Robbery” 

http://baconsrebellion.com/john-fishwick-csx-train-robbery/ 

Short version: It's about lawyer John P. Fishwick, Jr. (yes, a son of former N&W President John Fishwick) objecting to EHH"s pay package, calling it "repulsive" and "exhorbitant", having a Facebook page on it, etc.:

"He has taken up a new cause, blocking the out-sized compensation package of Hunter Harrison, a 72-year-old executive hired by CSX Corp. As a CSX shareholder, Fishwick objects to the company reimbursing Harrison $84 million in compensation he forfeited by leaving Canadian Pacific." 

- PDN. 

 

Harrison is the bad guy and wears a black hat while Fishwick is the good guy wearing a white hat.

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Posted by CPRcst on Sunday, April 16, 2017 12:39 PM

Hunter and his minions achieved their goals by letting a lot of "unprofitable" business slip away. During my 30+ year career at CP, Canadian Tire was one of the top two or three customers, evolving from trailers to containers. Only rarely did you see Canadian Tire containers on a CN train. CP even loaded lumber in eastbound Canadian Tire containers, which would have otherwise returned empty to the distrbution centre. 

This morning, Easter Sunday, at a crossing on the CN Main,I watched a train which consisted mainly of Canadian Tire containers, reminded me of CP intermodal hotshots in the pre-Hunter days. When you tell your biggest customers you don't want their business, what's left? 

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Posted by Norm48327 on Sunday, April 16, 2017 1:24 PM

CPRcst,

From information I gather on line CN is eating CP's lunch and taking customers Harrison said were not worthhy of keeping and profiting from that. Chasing them away made no sense other than to get the OR down to 60. That indicates he was only looking out for the stockholders. It will take the Beaver a lot of time to rebuild the dam and raise new kits. Hopefully, Beavers are resilient crittes.

I have this gut feeling Harrison is going to fail at CSX. Don't ask me why, it's just there in my mind.

Norm


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Posted by Paul_D_North_Jr on Sunday, April 16, 2017 5:20 PM

Hubris ? 

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Posted by oltmannd on Sunday, April 16, 2017 9:27 PM

Norm48327

 

I have this gut feeling Harrison is going to fail at CSX. Don't ask me why, it's just there in my mind.

 

After closing a few small humps, dead silence.  

I'll go with "Who knew operating CSX was so complicated?" 

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by kgbw49 on Sunday, April 16, 2017 11:13 PM
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Posted by cprtrain on Monday, April 17, 2017 7:44 PM

In 20 years time, MBA students will analyze Harrison's strategies and realize that "short term gain" does not equal "long term growth". I've seen hundreds of Canadian Tire containers moving on CN. CP drove Canadian Tire to CN and have lost the business. Cutting costs = cutting service. Cutting staff = losing experience. Firing staff without cause = destroyed morale. Harrison did all 3 at CP. Three strikes and Hunter strikes out. It will take CP a decade to recover.

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Posted by Ulrich on Tuesday, April 18, 2017 9:52 AM

Canadian Tire purposely diversifies its vendor base, hence containers on both CN and CP. Both railroads enjoy better routing in different markets.. i.e. makes more sense to use CN to Edmonton and northern AB markets  and CP to Calgary and southern AB markets. Canadian Tire has been using both railroads for years. 

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