schlimm The tone and value of this discussion would be improved if we stayed with Hunter Harrison's performance, based on specifics, not on salaries, the work experience of posters, or generalities about what the CN is doing now. Surely there are some members who can discuss with knowledge his career prior to CN.
The tone and value of this discussion would be improved if we stayed with Hunter Harrison's performance, based on specifics, not on salaries, the work experience of posters, or generalities about what the CN is doing now. Surely there are some members who can discuss with knowledge his career prior to CN.
Sure..started out in 1964 with the Frisco ...stayed on after the BN acquistion..worked for the IC which was bought by CN...three employers in 45 years..started out as carman...ended up as CEO.. my guess therefore is that the folks at Frisco/BN, IC, CN were generally happy with his performance...
Or it was easier to promote him than fire him?
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
How so? What would make it hard to fire him or anyone else for that matter? If he's not performing and there's a paper trail to back it up..then firing someone is as simple as saying "you're fired"..
Maybe it's a railroad thing? I've seen a few people get promoted and shipped away when they should have been fired. Makes it easier for everyone involved, I guess.
I'm sure it happens..but promoted on up to CEO just to get rid of him..I don't think so.
coborn35 2. He made a mockery of the CN's customer service. Just because a company is forced to keep doing business with someone doesn't mean they like it. I guarantee if I could start a competing short line able to haul the volume and frequency CN does, Minntac and Minorca would leave the CN behind as a bad memory for limestone shipments. Could you make a return on your investment. Anyone can provide service 24/7 at the customers wishes, very few could do that and still make a profit. 3. Single handedly destroyed everyone's pride and love for their job. I have NEVER, EVER seen a railroad as demoralized as the Missabe. This time tomorrow, one of my good friends will have become the youngest engineer in the history of the Missabe at age 19. He has already told me he doesn't care about his job anymore. In the beginning, he worked hard to get the extra cars moved and customer spotted. He said he realized that the more work you do, the more chances you have to fail some asinine rule and get fired. He got an investigation for going to the bathroom last month. Hunter has been gone for over a year and a half, so your 19 year old friend would have had very little if any time working under him. It is kind of hard to blame your friends lack of work ethic on someone who is long gone. 4. Harrison plain doesn't understand railroading. He clearly didn't understand weather at least. You see, in the winter in northern MN it gets cold and snows. In his grand idea to run 11,000' trains, over a 2.2% grade, in the dead of winter, he had some oversights. In the summer, they (DWP) installed Helper Link onto locomotives so they could shove these land barges up the hill and cut off on the fly. It worked great. Then, in the middle of winter Hunter, in all his infinite wisdom, decreed that helpers were no longer needed. 3 engines was enough to drag afore mentioned 11,000' train up the 2.2% grade in the middle of the winter. So one evening, a land barge was scheduled to go out, and they actually had a few good trainmasters in Superior at this time. They knew the train would never in a million years make it up that hill without pushers. They needed to make a decision...push the train and get hell, or not have the train leave and get hell. They were between Hunter and Hunter. So they took the phones off the hook, locked the doors, and shoved that *** train up the hill. They were both personally fired by EHH a few days later. II have worked for more than a few CEOs, and none have ever gotten down to that level of detail on the railroad to know if a train had to be pushed over a hill or not. That is what they pay people below them for. So this story is either, 1 BS, as EHH would have bigger fish to fry than one move on the railroad the size of the CN, or 2, I have gained some respect for EHH to get THAT envolved in his railroad.....I am leaning towards number 1.....
2. He made a mockery of the CN's customer service. Just because a company is forced to keep doing business with someone doesn't mean they like it. I guarantee if I could start a competing short line able to haul the volume and frequency CN does, Minntac and Minorca would leave the CN behind as a bad memory for limestone shipments.
Could you make a return on your investment. Anyone can provide service 24/7 at the customers wishes, very few could do that and still make a profit.
3. Single handedly destroyed everyone's pride and love for their job. I have NEVER, EVER seen a railroad as demoralized as the Missabe. This time tomorrow, one of my good friends will have become the youngest engineer in the history of the Missabe at age 19. He has already told me he doesn't care about his job anymore. In the beginning, he worked hard to get the extra cars moved and customer spotted. He said he realized that the more work you do, the more chances you have to fail some asinine rule and get fired. He got an investigation for going to the bathroom last month.
Hunter has been gone for over a year and a half, so your 19 year old friend would have had very little if any time working under him. It is kind of hard to blame your friends lack of work ethic on someone who is long gone.
4. Harrison plain doesn't understand railroading. He clearly didn't understand weather at least. You see, in the winter in northern MN it gets cold and snows. In his grand idea to run 11,000' trains, over a 2.2% grade, in the dead of winter, he had some oversights. In the summer, they (DWP) installed Helper Link onto locomotives so they could shove these land barges up the hill and cut off on the fly. It worked great. Then, in the middle of winter Hunter, in all his infinite wisdom, decreed that helpers were no longer needed. 3 engines was enough to drag afore mentioned 11,000' train up the 2.2% grade in the middle of the winter. So one evening, a land barge was scheduled to go out, and they actually had a few good trainmasters in Superior at this time. They knew the train would never in a million years make it up that hill without pushers. They needed to make a decision...push the train and get hell, or not have the train leave and get hell. They were between Hunter and Hunter. So they took the phones off the hook, locked the doors, and shoved that *** train up the hill. They were both personally fired by EHH a few days later.
II have worked for more than a few CEOs, and none have ever gotten down to that level of detail on the railroad to know if a train had to be pushed over a hill or not. That is what they pay people below them for. So this story is either, 1 BS, as EHH would have bigger fish to fry than one move on the railroad the size of the CN, or 2, I have gained some respect for EHH to get THAT envolved in his railroad.....I am leaning towards number 1.....
An "expensive model collector"
Actually Number 2 might not be far off. I have read where he would man the RTC desk for certain times in certain areas if there were "trouble spots" so he could get a personal feel for what was happening.
Dan
CNW 6000 Actually Number 2 might not be far off. I have read where he would man the RTC desk for certain times in certain areas if there were "trouble spots" so he could get a personal feel for what was happening.
That's a good thing...no?
[quote user="Ulrich"]
[/quote]
"...Maybe it's a railroad thing? I've seen a few people get promoted and shipped away when they should have been fired. Makes it easier for everyone involved, I guess.."
This might be an application of The Peter Principle :
http://en.wikipedia.org/wiki/Peter_Principle
FTA:"...The principle holds that in a hierarchy, members are promoted so long as they work competently. Eventually they are promoted to a position at which they are no longer competent (their "level of incompetence"), and there they remain, being unable to earn further promotions. Peter's Corollary states that "in time, every post tends to be occupied by an employee who is incompetent to carry out their duties" and adds that "work is accomplished by those employees who have not yet reached their level of incompetence". "Managing upward" is the concept of a subordinate finding ways to subtly "manage" superiors in order to limit the damage that they end up doing..."
From having read stories in TRAINS articles referencing various jobs in lower to middle level management and the individual's anecdotal stories of various interactions between Upper level ( or { upper to middle level managers] there seems to be a distinct favor in the railroad management scenario of the 'Attila the Hun' style of managing day to day situations. Specifically, I have seen references to the "Daily Operational Meeting Conference Call" (or what ever name it might be known as within a specific organization as. )
The descriptions seem to say that the guy intiiating the call seems to be able verbally castigate and flail their underling managers because they have not met quotas or operational measures set by the management, or their has been a major screw-up by a lower level employee or manager that has tied the organization into knots?
Basically, it seems to be a call from a saddistic manager who is bent on flagelating his maschochistic reportees.
Might it not be a learned management behavior in the railroad management business? and that is the style that E.Hunter. Harrison was schooled in?
Ulrich Sure..started out in 1964 with the Frisco ...stayed on after the BN acquistion..worked for the IC which was bought by CN...three employers in 45 years..started out as carman...ended up as CEO.. my guess [my emphasis added] therefore is that the folks at Frisco/BN, IC, CN were generally happy with his performance...
Sure..started out in 1964 with the Frisco ...stayed on after the BN acquistion..worked for the IC which was bought by CN...three employers in 45 years..started out as carman...ended up as CEO.. my guess [my emphasis added] therefore is that the folks at Frisco/BN, IC, CN were generally happy with his performance...
Just repeating a thumbnail bio adds nothing to what we know. What is useful is first-hand accounts or impressions or at least re-telling of a first-hand that.
For example, a friend who worked for years for one of HH's employers prior to CN told me:
"I have mixed reactions about him. He seemed to get the railroads he ran to be more efficient. However, he is a micromanager."
C&NW, CA&E, MILW, CGW and IC fan
schlimm Ulrich: Sure..started out in 1964 with the Frisco ...stayed on after the BN acquistion..worked for the IC which was bought by CN...three employers in 45 years..started out as carman...ended up as CEO.. my guess [my emphasis added] therefore is that the folks at Frisco/BN, IC, CN were generally happy with his performance... Just repeating a thumbnail bio adds nothing to what we know. What is useful is first-hand accounts or impressions or at least re-telling of a first-hand that. For example, a friend who worked for years for one of HH's employers prior to CN told me: "I have mixed reactions about him. He seemed to get the railroads he ran to be more efficient. However, he is a micromanager."
Ulrich: Sure..started out in 1964 with the Frisco ...stayed on after the BN acquistion..worked for the IC which was bought by CN...three employers in 45 years..started out as carman...ended up as CEO.. my guess [my emphasis added] therefore is that the folks at Frisco/BN, IC, CN were generally happy with his performance...
Not really...firsthand accounts,stories, and complaints might make interesting reading...but results and track record are all I really care about...and I summed them up as above. I don't care about Harrison's (or anyone else's) personal proclivities unless he/she is a family member living under my roof.
n012944 I have worked for more than a few CEOs, and none have ever gotten down to that level of detail on the railroad to know if a train had to be pushed over a hill or not. That is what they pay people below them for. So this story is either, 1 BS, as EHH would have bigger fish to fry than one move on the railroad the size of the CN, or 2, I have gained some respect for EHH to get THAT envolved in his railroad.....I am leaning towards number 1.....
It's a common enough luxury for "up-from-the-ranks" management types to "return to their 'roots' " and take charge and 'play' at their former position from time to time, such as a 'boss train driver'. As long as it's rare and just for 'fun', no problem (yeah, I'm guilty of that too). But if it was more frequent than that, then as you say, why was CN still paying to have a whole cohort of VP of Operations, General Managers, Superintendents, Trainmasters, Chief Dispatchers, etc. for whom EHH felt he had to step in and do their job ? The remedy is to re-educate* or replace them, not take their place. Something may have been out-of-whack there, but I don't know what it was . . .
- Paul North.
*What euphemism did the Soviets call those camps where the inmates re-learned correct politics ? Perhaps that's what Hunter's weekend 'training seminars'/ indoctrinations really were ?
In spite of Ulrich's contentions to the contrary, there is something to learn about EHH beyond repeating already well-known aggregate financial stats and reiterating his career path. Even in this thread, we have heard several examples and generalizations of his micro-management style. Without judging whether or not that style is an effective one, we learn something about what he specifically did in certain situations.
Ulrich It remains to be seen...because it sure doesn't look like that now. New locomotives on the way...1 billion being spent on infrastructure improvement...public acknowlegement that customer relations needs work. These are all postitive signs.
Or is that an objective demonstration that EHH was in fact deferring needed expenses, and CN now has to play 'catch-up ball' ?
And FWIW, I've owned several hundred CN shares (less "cash-ins" of the splits) in my IRA account since 1999, so I've got some 'skin in this game", too. (I also keep/ hoard all of the annual reports and proxy statements . . . )
Paul_D_North_Jr Ulrich: It remains to be seen...because it sure doesn't look like that now. New locomotives on the way...1 billion being spent on infrastructure improvement...public acknowlegement that customer relations needs work. These are all postitive signs. Meaningless statistic without context. For example, CSX is spending $2.2 Billion this year - so is it more than twice as good as CN ? How does the CN figure compare with prior years ? Per Track-Mile ? Per Route-Mile ? Per Ton-Mile ? (either Gross, or Revenue/ Net) Per Carload ? How does those figures compare with CP's, which runs in much the same terriitory ? Or other western Class I's - UP or BNSF ? Or is that an objective demonstration that EHH was in fact deferring needed expenses, and CN now has to play 'catch-up ball' ? And FWIW, I've owned several hundred CN shares (less "cash-ins" of the splits) in my IRA account since 1999, so I've got some 'skin in this game", too. (I also keep/ hoard all of the annual reports and proxy statements . . . ) - Paul North.
Ulrich: It remains to be seen...because it sure doesn't look like that now. New locomotives on the way...1 billion being spent on infrastructure improvement...public acknowlegement that customer relations needs work. These are all postitive signs.
To me it looks as if the company is moving in the right direction...Is 1 billion the right number to spend on infrastructure? I don't know...All I can tell you is that to me the signs are there...the spending..the new locomtives..the profitability...all of that bodes well...CN appears to have its act together. They're not without their problems to be sure, but on the whole it appears to be a good company with a good future. That's all I'm saying. I read whatever I can about them and I don't see anything that would have me sell my shares tomorrow.
One measure of performance of a corporation is stock prices. Compensation for top execs is often closely tied to the stock price of their corporations. In the period of EHH's tenure as CEO, CN stock went from $41 in Jan 2003 to $55 per share when he stepped down in Jan 2010. That is 34% increase over 7 years, or an average of ~5% per year.
I do not, nor have not worked for CN or IC, but have been a shareholder of both for a number of years and also have been a vendor for about 15 years. I have talked to HH once, for perhaps 45 seconds, not long enough to have gained knowledge about him personally, but long enough to thank him for his service to the railroad and my holdings. Now, that full disclosure is taken care of...
I have a customer of a fairly large trucking and logistics company in Chicago that arrives at work every morning at 5am and personally is involved in routing and dispatching drivers and loads. He probably has in excess of 200 drivers and while that is not a HUGE operation, it is pretty darned big. I asked him "why?". He responded that how else would he know that his customers were being serviced? Micro managing? Yes. His other operations people were in the room with him and they have been there for 15-20 years and understand this is who he is.
The former CEO of my employer was an absolute SOB and difficult to deal with at times. He was very brilliant and laser focused on the goal of the company. You do not have to like the boss, most of them really dont want to be friends with you (that is something my CEO told me...that is ok, he allowed me to reach goals in my life that wouldnt have been done elsewhere).
Now, to the numbers...
For the past 7 years CN has had revenues betweeen $6.5B and $8.5B, generally increasing until the bottom fell out in 09 (slid to $7.3B with recovery to $8.3B last year. During those 7 years CN invested between 16.4% and 19.1% of their revenues in capex. The trend has increased over the period of time and last year they invested $1.586B or 19.1% of revenue.
During the same 7 years CSX revenues have ranged between $8.0B and $11.2B with their capex ranging from 12.8% to 17.7%.
CP's revenues ranged from $3.9B to $4.9B with capex between 14.6% (last year) and 20.8% in 2005.
Capex for CN has been very steady in the past 7 years, both in $$$ amounts and %%% amounts, with an increase in every years except 2009:
2004 - $1.070B
2005 - $1.186 B
2006 - $1298B
2007 - $1387B
2008 - $1424B
2009 - $1402 B
2010 - $1586B
I could list the other Class 1's but my guess is that all are in the 15% -20% for capex, with the lineal amounts growing the past decade.
WC's business model was vastly different than CN's. There was business on the WC that simply wouldnt make sense for CN. Ditto Missabe. Ditto EJE (tho I havent heard of anything negetive lately). The EJE and WC along with IC were purchased for the infrastructure that allows CN to handle LONG HAULs, not for the limestone that moves 200 miles. I have former customers that it simply didnt work out...they wanted services or products we couldnt handle, usually at certain price points.
So, as an operations guy...I cannot comment. As a customer...no comment. As a trackside railfan...really dont care what colors the locomotive are. As a shareholder...
Ed
You are happy with a 5% increase on your investment annually?
No, but 5% is your number..my own is more like 10%, and for a blue chip stock that's not too shabby at all....don't forget about the 2:1 stock split in Feb. 06..
You are right. I stand corrected. 10% is better, but only average.
Actually much better than 10% if you've held the stock for awhile due to a 3 for 2 stock split in Feb. 04 and a 2 for 1 stock split in Sept. 99..and if you've reinvested all your dividends..well... you can see why I like CN.
Ok, lets look at real numbers (source: Morningstar).
Compare the returns of CNI, all publically traded railroads, and S&P500 over the last few years:
time: CNI Rails SPY
5 years 13.83% 11.42% 3.21%
10 years 19.26% 14.23% 2.84%
15 years 24.97% 10.84% 6.87%
These returns are the compound annual return rate and without going into math geek mode, it essentially means that CNI has had an average rate of return of 13.83% for the past 5 years....each year. 19.26% for each year for 10 years.
Comparing CNI to SPY is a little misleading, as CNI is a North American company, not an American company while the S&P500 is an American index...but the difference is HUGE.
Further, my dividend return yearly off of my initial investment is 34.5%...PER YEAR. Why? I bought in early (IC) at a low price and IC and CNI has constantly increased their dividend (yield on current price is 1.7%).
So, am I with CNI? Yes I am.
10% equity returns HAVE been average, based on returns from 1926. However, looking at the numbers I posted above, in which SPY has returned 2.84% over the past 10 years, one would tend to be very content with a 10% return.
Look, the railroad stocks have been outstanding investments the past 10 years. CNI has returned enormous returns, over both the railroads and the indices.
That being said, the CNI's return on capital is only about 9% and return on equity is only about 19%. Railroads require enormous amounts of capital investment in order to be attractive. The past decade has allowed the industry to begin to achieve the returns necessary.
ed
[quote user="samfp1943"]
It has been some time for me, but I seem to recall that the Peter Principle had, as a prediction, that one would only ever rise to the level where one is deemed incompetent. I find it very hard to accept that not one person in three different roads, at least one of which had a sound and rational corporate culture with good leadership, didn't conclude that EHH was a dud at his current level and either coach him extensively or stall him inedefinitely. However, regardless of what I have guessed, his extensive tenure and corporate progression seem to fly in the face of all the poor opinions and negative assumptions about his skills, orientation to his work, or his record of success for those who have to assess that record in order to decide whether or not to hire him, or to continue to employ him in his current capacity.
Crandell
Crandell: The undisputed fact that HH was made a CEO twice does not mean, however, that there is nothing more to be said about him, positive or negative or simply fleshing out who he is beyond the basic bio. All you have without a deeper exploration is a cardboard figure. I am surprised you, as someone in social sciences, don't seem to have the curiosity to want to know more about him.
I have no particular interest in him at all, Schlimm, but neither do I think it morally right or ethically right to impugn a person here where he is unlikely to be afforded an opportunity to refute any claims of fact about him. All there is is invective and opinion, or third party anecdotes a bit short on beef.
Aside from that opinion, I don't know what other reason to know more about him I should have merely because of my educational background....? I enjoy some information about higher-ups in all forms of business, and will sometimes enjoy a well-written biography. I don't think we're going to get anything much of that caliber here.
Might as well get rid of news stations, newspapers, magazines, internet forums, and chat rooms eh Crandell? Cant refute claims there either.
Mechanical Department "No no that's fine shove that 20 pound set all around the yard... those shoes aren't hell and a half to change..."
The Missabe Road: Safety First
One story I heard is that he left BN under a cloud after he started removing part of the third track in the Chicago commuter district without authorization. A potential career limiting move. No doubt the Chicago area folks can comment on how well the territory would function today with only two tracks to play with. So to fully understand his strengths and weaknesses we would have to know the complete reasons for his moves from company to company.
Certainly one strength Harrison had was a detailed understanding of the business he was in charge of. All too often we see MBA types running companies, and believing that knowing how to "manage" provides all the necessary skills. There is a difference between a pretty Power Point presentation and actually understanding the customer's desires and how you can actually serve them. The small short lines understand this; the Class 1s are mostly too proud of their bigness to worry about the details that could lead to greater success.
John
coborn35 Might as well get rid of news stations, newspapers, magazines, internet forums, and chat rooms eh Crandell? Cant refute claims there either.
I take what I see there with about as much skepticism. Some interviews are with respected authorities and experts, while some just solicit opinions. Being prudent has served me well so far.
selector I think it morally right or ethically right to impugn a person here where he is unlikely to be afforded an opportunity to refute any claims of fact about him. Crandell
I think it morally right or ethically right to impugn a person here where he is unlikely to be afforded an opportunity to refute any claims of fact about him.
Immoral? Unethical? Impugning? Invectives? Pretty strong statements. You seem to miss the distinction between a public figure and an ordinary one. You also imply that anything said here about HH is negative and not accurate. One of the driving forces in the social sciences and education in general is to expand understanding. And the of gathering oral accounts, anecdotes (some of those here have been 1st or 2nd party) etc. is a significant part of biography and history.
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