As someone stated "good" a definition of "good" would be on it's place, I think...
I don't disguise anything with asking legit questions from what I think (and not only me), belongs to the definition of "good": a great safety record.
CN currently has a poor safety record compared to other railways on the world (like Europe with much lover incident rates).
The CEO does great things for the shareholders (more profit) and therefore they pay him a LOT of money to get even MORE profit. By getting a worse safety record over time and "sweating the assets" by saving on maintenance. The poor records with incidents indicate that.
And CN is not alone. There are more of those poor managed companies around.When I see the infrastructure in North America I see tons of tracks in extremely poor condition. Primitive operations, wonky cars everywhere (and I've been around).
Safety at those companies is not a #1 thing. Any $ spend on infrastructure is a "cost center". Any $ saved there, brings more profit. So stuff like train control systems and signalling systems are not a high priority. And a derailment like in Casselton, ND only "cost" about 4-5 Million $. revamping all DOT-111 cars cost a multitude of a derailment. So from a corporate risk management perspective you shouldn't invest in something that is only causing "little damage".
Now this is somewhat logic, as they are companies and companies must make profit to survive. As simple as that. But, like in the petro-chemical and aviation industry: it's not working like that anymore. Lac-Mégantic, QC taught us another lesson. People can die in incidents.And even how pride you are on "even lower incidents" statistically, one incident where people die or are injured will result in enormous repercussions to the "system of railway".
So away with the witty statistics of safety improvements. The core problem is the Safety Management System. And the way it is NOT lived by the management. And how the operational staff are struggling to do their work right with the systems they (don't) have. So there is nothing to disguise. A good manager, above all a CEO, especially in a railway company should be the safety guru over all. Hence the request "the CEO is doing good" should be defined, and me asking for a definition of "good".It should be "good for all" and not only for the pockets of the shareholders.
with kind regards, Richard Plokhaar Signalsoft Rail Consultancy Ltd. http://www.signalsimulation.com
DwightBranch Ulrich For the most part the market decides what you and I and he makes. Sometimes we may not agree with it, but the market reflects what we as a society value. This is why an NFL football player makes a lot more than a physics professor, and why Larry Flint is probably wealthier than Stephen Hawking. Should Harrison make 100,000K? 1 million a year?... 40 million? Should a playboy bunny make way more than a railroad conductor? The market is the market. It isn't simply "the market" that determines salaries, it also is leverage in the "wage bargain" and also what is considered socially acceptable in various countries. In Japan, Germany etc. the ratio of executive salaries to the average worker is around 12 to 1, while in the US (the worst as we typically are) it is around 400 to 1. Recall, one of the reasons the Daimler/ Chrysler merger did not work is that in Germany it is not considered socially acceptable for an executive to make multiple millions, and at that time Robert Eaton and his fellow executives wouldn't take a pay cut from (for Eaton, from $17m to below $1 million). Is an American executive worth 17 times what a German executive is, i.e. is his value 17 times more? Not likely. His salary is due (IMHO) mostly to the general anti-regulation mood that doesn't exist almost anywhere else, and to weak labor unions. Stock market manipulations (which as we can see with the Creel example does not necessarily reflect a real improvement to the company's operations) etc. are not monitored as closely here, and collusion between stockholders and the executives lead to a socially wasteful outcome. I am curious how the $47m goes over in Canada, where most CP profits come from, the ratio there is about 20 to 1, much lower than the US.
Ulrich For the most part the market decides what you and I and he makes. Sometimes we may not agree with it, but the market reflects what we as a society value. This is why an NFL football player makes a lot more than a physics professor, and why Larry Flint is probably wealthier than Stephen Hawking. Should Harrison make 100,000K? 1 million a year?... 40 million? Should a playboy bunny make way more than a railroad conductor? The market is the market.
For the most part the market decides what you and I and he makes. Sometimes we may not agree with it, but the market reflects what we as a society value. This is why an NFL football player makes a lot more than a physics professor, and why Larry Flint is probably wealthier than Stephen Hawking. Should Harrison make 100,000K? 1 million a year?... 40 million? Should a playboy bunny make way more than a railroad conductor? The market is the market.
It isn't simply "the market" that determines salaries, it also is leverage in the "wage bargain" and also what is considered socially acceptable in various countries. In Japan, Germany etc. the ratio of executive salaries to the average worker is around 12 to 1, while in the US (the worst as we typically are) it is around 400 to 1. Recall, one of the reasons the Daimler/ Chrysler merger did not work is that in Germany it is not considered socially acceptable for an executive to make multiple millions, and at that time Robert Eaton and his fellow executives wouldn't take a pay cut from (for Eaton, from $17m to below $1 million). Is an American executive worth 17 times what a German executive is, i.e. is his value 17 times more? Not likely. His salary is due (IMHO) mostly to the general anti-regulation mood that doesn't exist almost anywhere else, and to weak labor unions. Stock market manipulations (which as we can see with the Creel example does not necessarily reflect a real improvement to the company's operations) etc. are not monitored as closely here, and collusion between stockholders and the executives lead to a socially wasteful outcome. I am curious how the $47m goes over in Canada, where most CP profits come from, the ratio there is about 20 to 1, much lower than the US.
It's still mostly about the market. Sure, there are other factors i.e. social acceptability, union bargaining powers that may indirectly affect what a CEO gets etc. But on the whole Harrison's pay is based on what the owners of CP (the shareholders) figure he's worth. He didn't put a gun to anyone's head... CP could have said no to his compensation requirements. Check out what other CEOS at other companies make. His pay is not out of line with what a CEO makes at a large Fortune 500 co. Sure, maybe he should make less, and maybe NFL football players should cap out at 40K a year. Look at what Tiger Woods gets for beating a little white ball around.
plokky Can you define "good"? How's the safety record? How many overtime hours does the staff make? How many money is NOT invested in track and rolling stock maintenance? Those are all short-term measurements that bring big gains in profit, but will "derail" the business later. Mr. Hunter is taking 47 million $ as a compensation. you could hire 470 train engineers from that money and prevent fatigue and overtime...So those people doing overtime are throwing the money in the management's pockets.Now please define "very good in what he does". I'm really curious.
Can you define "good"?
How's the safety record?
How many overtime hours does the staff make?
How many money is NOT invested in track and rolling stock maintenance?
Those are all short-term measurements that bring big gains in profit, but will "derail" the business later.
Mr. Hunter is taking 47 million $ as a compensation. you could hire 470 train engineers from that money and prevent fatigue and overtime...So those people doing overtime are throwing the money in the management's pockets.Now please define "very good in what he does". I'm really curious.
Ulrich So the CEO should make nothing?
So the CEO should make nothing?
No, of course not. He can have a decent salary. But 47 Million $ is way over the top.
No normal person can spend that in a year.
That does happen. IIRC, when Lee Iacoca took the helm at Chrysler he was working for $1.00 a year.
Norm
williamsbHow is Kieth Creel related to Hunter Harrison?
As Ulrich pointed out in one of his posts EHH plucked Creel from CN to be his successor at CP. Depending on how the lawsuit goes, that might not have been the best idea.
Bruce
So shovel the coal, let this rattler roll.
"A Train is a Place Going Somewhere" CP Rail Public Timetable
"O. S. Irricana"
. . . __ . ______
rbanddr,
While railroading is a business with an unusually long time horizon, you also have to live through the short run to get to the long term. It is a balancing act.
Mac
in railroading as in any business if u only look good u r eating your babies. that is what happened to every other fallen flag. u have to have the long vision to stay viable!
I don't doubt for a second about EHH's ability to bring CPRS' financials more in line with the rest of the Class Is. My big question is, what EXACTLY is he doing to GROW the business? As a long-time CPRS employee, I don't see this happening. In fact, I see the opposite.
Serious, if true. The folks who are making these allegations have an axe to grind. Operations metrics are generally of no interest to the average shareholder. Most don't care if the trains run on time so long as the financials look decent.
Serious, indeed, raising the question of whether the shenanigans, if actual, were confined to the operating department -- just Creel trying to look good to HIS boss -- or may have extended to financial reporting.
AgentKid You were aware there may be clouds on Keith Creel's horizon? It seems he has been named in a lawsuit alleging he fiddled with Yard Dwell Time and Average Train Speed numbers to make CN appear more favourable to investors. http://www.cbc.ca/news/whistleblower-lawsuit-says-cn-is-cooking-its-books-1.2187724 The actual lawsuit can bee viewed here: aptn.ca/pages/news/files/2013/09/CNUScomplaint.pdf Bruce
You were aware there may be clouds on Keith Creel's horizon? It seems he has been named in a lawsuit alleging he fiddled with Yard Dwell Time and Average Train Speed numbers to make CN appear more favourable to investors.
http://www.cbc.ca/news/whistleblower-lawsuit-says-cn-is-cooking-its-books-1.2187724
The actual lawsuit can bee viewed here:
aptn.ca/pages/news/files/2013/09/CNUScomplaint.pdf
In my day we called that 'cooking the data/results' which incurred severe penalties in an academic setting. Hope the regulators and the courts deal with him...through due process. There's enough 'messing around' as it is.......
Charlie
Chilliwack, BC
UlrichHarrison is bringing CP's numbers in line with industry norms. For years the Company has been the industry lightweight, always the laggard in terms of performance and profitability. If his motivation was only short term gain over long-term viability he would not have bothered to put together a succession plan, and he would not have troubled himself with luring CN's star operations man, Keith Creel, over to CP. With Creel, CP will have excellent leadership for the foreseeable future.
UlrichAs a long-term shareholder in CP I'm happy with the progress to date.. This is not to say that things are perfect, but they're at least going in the right direction quickly. Certain issues need to be addressed, and certainly any employee safety issues need to remain front and center. Employees are stakeholders too, and more importantly, many put their lives on the line; and that fact should (and I believe does) trump any shareholder interest in CP.
I must say this latest round of financial reports from the Canadian roads did surprise me. During January there were various pieces of info that were leading me to believe things were not well. There were reports in Canadian business media that both CN and CP were going to miss their fourth quarter earnings estimates because of the very cold and snowy weather we had over most of the country the last six weeks of the year. And, as an offshoot of that, there were reports that with the reduced capacity available railways were giving priority to moving crude-oil over grain. The fact is farmers produced record amounts of product this year and railways simply can't be expected to move those volumes on a moments notice. Finally, there were reports on various Canadian RR forums that in order to reduce the yard dwell time metric CP was moving trains out of yards to sidings along the line. It was said CPR stood for "Crew, Park, and Recrew".
One thing I did notice in these financial reports was the measurement of Revenue-Ton-Miles. I could relate to this, as I worked for a common carrier natural gas pipeline company and we had the same type of metric, only we called it Commodity Mileage. It is a way of quantifying the actual amount of "work" done as opposed to how much money you will earn for the "work" or how much it costs you to earn it. I also looked at changes in Operating Ratios. Taken together changes in these two numbers could be revealing. A simplified example would be, if you increased RTM's but your OR actually fell, it could mean you were beating your infrastructure and men like rented mules.
Given the widespread nature of RR activities, it also struck me that using national changes in GDP might be a reasonable number to compare changes in RTM's to. As it happened, the US Government agency that reports such things issued a report on Friday that said US GDP grew at 1.9% in 2013. So, I looked at five of the six big RR's and this is what I found.
NS RTM's increased by 4.3% and their OR increased by 1% to 71.0. CSX RTM's increased by 2% and their OR fell 0.5% to 71.1 I could not locate this info for BNSF. I will get to UP in a moment. Now we get to the interesting part. CN RTM's increased 4% and their OR increased 0.5% to 63.4 CP RTM's increased 7% and their OR fell 0.71% to 69.9. I guess the weather wasn't so bad, the grain and oil kept moving, and the people making earnings estimates should be polishing their Crystal Balls. It seems CP is no longer an industry laggard.
UP RTM's fell 1% and their OR increased 1.7% to 66.1. That big slide they had in Colorado may have had an impact here. Or do you suppose having almost the industry lowest OR has compromised their ability to earn a living? I think I see a future Fred Frailey article here.
I may never become a EHH fan but something seems to be working for CP.
actually it is really important that responsible investors get the truth from the employees as well as managment.
It seems Jeff's story is not the secondhand one I thought, and I apologize for denigrating it. I also acknowledge that there are over-the-top, overbearing supervisors to be run into in any profession, and perhaps especially in the oldfashioned world of railroading.
One wishes them a short life of trouble.
In response to Lenzfamily, it's been 40 years since my last local meeting, and that was clerks, not one of the 'ops'. I can remember several, uh, sex organs among the railroad officers of my day, though, and I'm sorry but not surprised to hear they're still out there.
dakotafred jeffhergert You need to work for a railroad to know what it's really like to work for a railroad. Some things are beyond belief, like one co worker who was called into a conference about absenteeism. He had suffered a house fire and then a child getting sick and ending up in the hospital. At the conference a low level operating officer told him that he needed to let his family know that the railroad came first. If the employee wanted, the officer could explain it to his family. Jeff With all due respect, this has the aroma of an urban myth-type tale. I'd like to see some documentation. I'm sure there are such rear ends out there, but I would be surprised to see one of them in a position of authority with a modern company. Too many roofs ready to fall in on you. Where, for instance, was the guy's union in all this? If they weren't making a federal case of it, he's been wasting his dues money all these years.
jeffhergert You need to work for a railroad to know what it's really like to work for a railroad. Some things are beyond belief, like one co worker who was called into a conference about absenteeism. He had suffered a house fire and then a child getting sick and ending up in the hospital. At the conference a low level operating officer told him that he needed to let his family know that the railroad came first. If the employee wanted, the officer could explain it to his family. Jeff
You need to work for a railroad to know what it's really like to work for a railroad. Some things are beyond belief, like one co worker who was called into a conference about absenteeism. He had suffered a house fire and then a child getting sick and ending up in the hospital. At the conference a low level operating officer told him that he needed to let his family know that the railroad came first. If the employee wanted, the officer could explain it to his family.
Jeff
With all due respect, this has the aroma of an urban myth-type tale. I'd like to see some documentation. I'm sure there are such rear ends out there, but I would be surprised to see one of them in a position of authority with a modern company. Too many roofs ready to fall in on you.
Where, for instance, was the guy's union in all this? If they weren't making a federal case of it, he's been wasting his dues money all these years.
He told us this at a union meeting. I don't think the matter went far enough to get the union involved. It wasn't an investigation, but a preliminary step that could lead to one. Usually you get a letter or an informal conference to let you know you are on their radar. (The computer tracks the availability. It automatically flags too many lay offs or not enough work hours compared to peers. Even vacations get flagged, but then managers are supposed to correct for things like that. One manager didn't recently and guys who had been on vacation were getting warning letters for absenteeism. Their records were corrected.)
I don't think that it's our company's policy to be so heavy handed in unusual circumstances, I think the officer thought he had to project that attitude about work comes first. But if they really wanted to pursue it I'm not sure anything could be done about it. A literal reading of the company policy really is work comes first.
Any yes, Fred, he could have been exaggerating, too. But it seems some (but by no means all) younger officers, whether hired into management off the street or coming out of the ranks think that sometimes you need to be a rear end to go higher. It's why I won't apply for a management position (MOP, known as roadforeman of engines or travelling engineer elsewhere) much to the chagrin of my wife. I would have no problem enforcing rules or pulling tests, but I couldn't do it the way a few officers have in the past. (Thankfully most of those have retired or moved to other locations.)
Heck, it's not only in the operating end. A conductor was telling me about his nephew who works in the "glass palace" in one of the management (like finance or IT, etc.) departments. He was getting on an elevator when he saw his supervisor coming down the hall, also to use the elevator. He held the door by putting his arm out so the door wouldn't close. His thank you for holding the door was being reprimanded for a safety violation.
lenzfamily dakotafred With all due respect, this has the aroma of an urban myth-type tale. I'd like to see some documentation. I'm sure there are such rear ends out there, but I would be surprised to see one of them in a position of authority with a modern company. Too many roofs ready to fall in on you. Where, for instance, was the guy's union in all this? If they weren't making a federal case of it, he's been wasting his dues money all these years. Fred I don't know your working background or your reasons for making the statement you did above. However, I can tell you from experience that someone who is uncertain of their future or how the union or the business can or cannot support them, along with the union's position in today's regulatory, economic (read shareholder profit) and political environment, would be thinking twice about how to 'go to the wall' and further more would think pretty carefully about proceeding in a way that would produce beneficial results for members. If I may ask, 'When was the last time you sat in a union meeting and heard the business agent or local chairman talk about such matters?' And then made a decision through your vote?? If you have, I'm willing to hear what you have to say. If not, you're blowing smoke..... As others on this forum have detailed previously, 'picking your battles' matters a lot. Spurious or other questionable claims may really muddy the waters and create further challenges, legal and/or otherwise. It's not a kind world for labour.... Charlie Chilliwack BC
dakotafred With all due respect, this has the aroma of an urban myth-type tale. I'd like to see some documentation. I'm sure there are such rear ends out there, but I would be surprised to see one of them in a position of authority with a modern company. Too many roofs ready to fall in on you. Where, for instance, was the guy's union in all this? If they weren't making a federal case of it, he's been wasting his dues money all these years.
Fred
I don't know your working background or your reasons for making the statement you did above.
However, I can tell you from experience that someone who is uncertain of their future or how the union or the business can or cannot support them, along with the union's position in today's regulatory, economic (read shareholder profit) and political environment, would be thinking twice about how to 'go to the wall' and further more would think pretty carefully about proceeding in a way that would produce beneficial results for members. If I may ask, 'When was the last time you sat in a union meeting and heard the business agent or local chairman talk about such matters?' And then made a decision through your vote??
If you have, I'm willing to hear what you have to say. If not, you're blowing smoke.....
As others on this forum have detailed previously, 'picking your battles' matters a lot. Spurious or other questionable claims may really muddy the waters and create further challenges, legal and/or otherwise.
It's not a kind world for labour....
Chilliwack BC
C&NW, CA&E, MILW, CGW and IC fan
Hunter's balance sheets and stockholder satisfaction is only one side of success. Ask the rank and file about their balance sheets and home lives....Hunter and the money may be on world tours but some in the rank and file aren't anymore and others are working so many hours they can't even see themselves in the mirror much less their families. And, of course, the customer may also be asked if he's getting his shipments on the same regular basis and time as before or if he's had to (re)adjust his schedules and operations to accommodate the bottom line of CP rather than his company.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
Now that Hunter's been there for over a year, it would be real interesting - and informative - to look at the changes Year-Over-Year of some key financial and safety performance indicators and ratios. For example (and certainly not a complete list, nor in any particular order):
I'll look into the Railroad Performance Measures for CP, and see what they have to say - Average Train Velocity, Average Car Dwell Time in Yards, Average Number of Cars on the system, etc. Other suggestions and comments are invited.
EDIT: That was a short look - evidently CP doesn't participate, though all of the other 6 Class I's do - see: http://www.railroadpm.org/home/rpm.aspx Apparently effective Sept. 2013, CP discontinued reporting to the AAR, and instead set up its own performance reporting website - see:
http://www.cpr.ca/en/invest-in-cp/key-metrics/Pages/default.aspx
Maybe more on this later when I have more time to review it in detail (meantime, others are certainly welcome to jump in.)
A sharp look at these might tell us whether maintenance is being deferred to 'goose' the earnings and share price in the short-term only, or whether the property is being maintained on an even keel for the long-term viewpoint, etc.
- Paul North.
The jury is still out on him, and on Pershing Square and Bill Ackman. If the profits reported today are reinvested in the right of way, strengthening the railroad then it will have been worth it. There are many such projects in need of attention, such as replacing stick rail on the former Soo Line in the Dakotas etc.,That is what Warren Buffett has done with BNSF, thinking long term. Many Canadians are however afraid Ackman will sell out after draining all the profits he can and inflating the stock price to dump it. That would leave a mess behind for the workers who are being asked to sacrifice now. I wouldn't say that CNR is a clear success for Hunter either, from what I have seen and heard the track is in undeniably worse shape then when it was privatized.
Deggesty Perhaps that low level operating officer should also have some such trouble--and then he would understand that there are personal matters that NEED attending to, even when they interfere with work. Does he have no compassion?
Perhaps that low level operating officer should also have some such trouble--and then he would understand that there are personal matters that NEED attending to, even when they interfere with work. Does he have no compassion?
Those type of people exist in every industry. Name me one industry that doesn't employee a single aszhat... can't be done.
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