To save face in failure, declare victory and change direction. That's likely what's happening with PSR and the obsession with the OR. Bringing in an "outsider" was I think a smart move...sometimes those of us who have been in transportation for decades are set in our ways and can't see the forest for the trees. An outsider who isn't vested in PSR brings a fresh perspective, and perhaps that's what's needed most of all. Hopefully Hinrich is able to get his team behind him..
BaltACD My look at bringing in Hinrich and letting Foote go, the CSX Board was seeing the damage that EHH's PSR principles were doing to the employees, the customers and to the ability to sustain the bottom line. The PSR principles can ring up big 'profits' for the short term as those profits are beind derived from STEALING from the elements that are required to sustain the operation over the long term. Cutting crews so that customers that got daily service on get service three times a week doesn't leave a good taste in the customers experience and sets customer on a path to see if they can meet their own standards by getting ZERO rail service. Furloughing employees into a 'hot' job market means those employees are GONE - during their short railroad career, they got all the WORST the industry can present and other jobs become more to their liking. Stinting on plant investment and maintenance just runs the property down, if carried on long enough to the levels of Penn Central. Fortunately the CSX board seems to have seen through the brown bull haze of PSR's 'quick profits' to see the damage being done.
My look at bringing in Hinrich and letting Foote go, the CSX Board was seeing the damage that EHH's PSR principles were doing to the employees, the customers and to the ability to sustain the bottom line. The PSR principles can ring up big 'profits' for the short term as those profits are beind derived from STEALING from the elements that are required to sustain the operation over the long term.
Cutting crews so that customers that got daily service on get service three times a week doesn't leave a good taste in the customers experience and sets customer on a path to see if they can meet their own standards by getting ZERO rail service. Furloughing employees into a 'hot' job market means those employees are GONE - during their short railroad career, they got all the WORST the industry can present and other jobs become more to their liking. Stinting on plant investment and maintenance just runs the property down, if carried on long enough to the levels of Penn Central. Fortunately the CSX board seems to have seen through the brown bull haze of PSR's 'quick profits' to see the damage being done.
During Michael Wards era at CSX here's the kicker... Between 2009-2010 CSX traffic growth had produced a lower OR. It declined 3 percentage points from 71% to 68%.. In fact the OR was already dropping during the so called rail renaissance which began in 2003. IIRC CSX was hovering around a 77% OR. by 2010 it had dropped to 68%. During an era of traffic growth before and after the 2008 GFC mind you..
Never too old to have a happy childhood!
oltmanndYou can't grow volume without a top-performing product. That means all parts have to work well together. Managment's prime job is to facilitate work that supports the product.
Wick Moorman tried 10 years ago with NS. Problem is there was no buy-in from just about every manager below him. And if the mngmt doesn't buy into it, what hope is there for the labor?
Decades and decades of mistrust aren't going to be erased overnight. And with the last contract process, we're still a long way away from harmony.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.
ns145The cynical side of me wonders, however, how long he will last at CSX especially since the actions proposed to be taken will by necessity adversely affect the OR and profit margins.
It should NEVER have been about profit margins and OR. It's net that matters. Or more precisely, the net present value of all future net profits.
Net is volume x margin. Somehow, everyone forgot about the volume part - because it's harder to understand and do.
You can't grow volume without a top-performing product. That means all parts have to work well together. Managment's prime job is to facilitate work that supports the product.
Maybe that's sinking in, finally.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Then there's that "wisdom" that says that the railroad brings you on, trains you, then spends all its time trying to fire you.
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...
tree68 ns145 ... especially since the actions proposed to be taken will by necessity adversely affect the OR and profit margins. This by itself is probably enough to doom him and his efforts.
ns145 ... especially since the actions proposed to be taken will by necessity adversely affect the OR and profit margins.
This by itself is probably enough to doom him and his efforts.
He addressed the profit margin issue head-on in his speech.
Some on Wall Street have questioned how CSX’s focus on employees and customers would affect its profit margins. But Hinrichs says that’s the wrong way to look at the issue.
“What’s it costing us to have our employees not motivated, our employees mad, our employees quitting and leaving?” Hinrichs asks. “Or we hire new employees, we do all the work to train them, we bring them in, they go to the yard, and the guys say, ‘Why are you working here? They treat you like crap, you should leave. And by the way, they want to get rid of you.’ ”
All I can say is "wow". That's exactly what veteran railroaders say to new hires. Saw this kind of thing for years on the old Yardlimits.com forums. He's not pulling any punches.
ns145... especially since the actions proposed to be taken will by necessity adversely affect the OR and profit margins.
Haven't seen or heard the speech. Hinrich is not a CEO that was raised in the rail industry, he was raised in a rail customer industry - Ford.
If Hinrich can get everyone on CSX to pulling the same direction the results could be interesting.
I'm a little shocked that there has been no discussion on this forum of CSX CEO Joe Hinrich's brutally frank assessment of the Class I's failings in dealing with customers and employees and the subsequent fallout with the STB. He even makes the point that the industry tee'd itself up for a major backlash from Congress after the East Palestine disaster. His comments were posted on the News Wire page two days ago: https://www.trains.com/trn/news-reviews/news-wire/first-step-toward-improving-rail-service-is-treating-employees-better-csx-ceo-says/
I am normally very skeptical of rail CEO speeches because they are usually completely disconnected from reality. This speech could have been prepared by a major rail labor union leader. He addresses just about every major problem in the industry that has been driving me nuts over the past few years and he doesn't sugar coat anything. He seems to be the real deal in terms of shaking things up at CSX. The cynical side of me wonders, however, how long he will last at CSX especially since the actions proposed to be taken will by necessity adversely affect the OR and profit margins.
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