Harrison said he expects there will be 400 to 450 fewer jobs

[CliqueofOne]

CN Rail wants $8B in revenues by 2009, EPS growth of 8% to 12%, CEO says

ALLAN SWIFT
Canadian Press

Tuesday, May 25, 2004

MONTREAL (CP) - Canadian National Railway Co. hopes to grow earnings by eight to 12 per cent annually over the next five years as it cuts jobs and costs and increases revenues, CN chief executive Hunter Harrison told an investors conference Tuesday.

Harrison said he expects there will be 400 to 450 fewer jobs with the Canadian Auto Workers union during the next 12 to 18 months. The 5,000 CAW-affiliated shop, trainyard and clerical workers in Canada went through a bruising month-long strike in February and March.

He also said there will also be more co-production opportunities with companies like Canadian Pacific Railway, and consolidation of more major trainyards.

Harrison told the railway's annual investors' conference that Canada's biggest railway is in a good position to deliver on its promises to boost financial results.

"We have a strong franchise, the rail industry's best profit margin, and a solid record of growing shareholder value," Harrison told the conference in Toronto.

"Our goal is to extract even greater benefits from our innovative scheduled railroading practices, and to accelerate our relentless drive to push change and innovation throughout the organization," he said.

In his presentation, Harrison said CN wants to:

- Gain market share and improve pricing to achieve $8 billion in annual revenues by 2009. This compares with $5.9 billion in revenues in 2003.

- Reach an operating efficiency ratio of less than 65 per cent, which means that for every dollar of revenues, the railway would have 65 cents in costs. This compares with 70 per cent in 2003, an industry best.

- Aim to raise earnings per share by eight to 12 per cent annually over the next five years.

CN said its financial outlook is based on sustained economic growth in North America, oil prices falling to about $30 US a barrel - far less than the current spot price - and the Canadian dollar trading at about 75 cents US and some other key assumptions.

Harrison said he does not know if there will be any major mergers or acquisitions among the remaining large North American railroads, "but we're well positioned; we will not be hurt by any mergers."

CN is going to continue to focus on acquiring or leasing smaller railways and other transportation assets like terminals, he said, in order to keep control.

Harrison said CN plans "significant investments" in the Port of Prince Rupert in British Columbia, following the recent acquisition of BC Rail. He believes it will become a major gateway for goods from China, as other west coast ports become congested.

He boasted that CN can now run a train between Chicago and Prince George, B.C., some 1,400 kilometres beyond Edmonton, in four days. It used to take seven to nine days to travel between Edmonton and Chicago.

"That gives you some indication of the order of magnitude that scheduled railroading has done for us," Harrison told the group.

The company's stock (TSX:CNR) closed at $51.48, up 63 cents, on the Toronto Stock Exchange.
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[Anonymous]

I don't know why anyone would ever want to work for that guy.

I know a lot of the BC Rail guys aren't to pleased about going to work for him.

CUT CUT CUT