Hunter Harrison Has Reached the End of the Line

Numerous reports on rail and financial sites stating that EHH has passed away.

We'll see what happens with CSX now.

Hunter as a greenhorn 20-something.

Kind of expected this. While I hate to cheer a death, presumably this will slow down or stop the destruction of CSX to a degree.

Or to leave CSX to flounder it's way to a merger with one or more partners.

I never had ill will toward the guy. Sad way to go. I wish the best for his family and friends.

His hedge fund backers, on the other hand, put and old and gravely ill exec at the helm of a major operation. Of course he would make mistakes, and stress his physical capacity. I hope CSX stock tanks on Monday, and that Mantle Hill gets utterly scorched.

lvrr325 wrote:Kind of expected this. While I hate to cheer a death, presumably this will slow down or stop the destruction of CSX to a degree.

The new CEO James Foote was EHH's lackey. Very little will change at CSX.

At this point, any railfan knows the gameplan anyways. They only needed Harrison to implement these plans as a way to appease a segment of the investing community, since there was nothing unique with the Hunter gameplan that one couldn't learn just by reading a book. They in essence paid for a name, since dozens of others could've implemented similar policies for much less money than they were paying him. But the investors wanted Hunter Harrison's name on the door.

You rip out double track, shutter hump yards, close helper districts and make them double over hills, cease new locomotive purchases and rebuilding programs, store owned power that isn't needed 100% of the time and make up the many shortages with expensive short-term lessors, make employees buy as much of their own safety gear as possible and make safety rules more lax in the name of the bottom line, close shops and increase reliance at a markup from 3rd party outfits, centralize dispatching despite failures 15-25 years before that showed the fallacy there (Well okay, they added a new wrinkle at CSX with this one by getting dispatches to sell their homes and relocate their families, but then leaving them in limbo where they were to live out of their vehicles), fire managers on the front lines that disagree, increase dwell times and lower average speeds until enough business is driven away to restore these figures, etc.

They sadly don't need Harrison to implement his one size fits all policies to drive business away, cut reinvestment, kill off long-term planning, destroy employee morale, etc. The Harrison plan is like running a apple orchard. Stop planting new trees to replace the old since it's an extra expense and won't show dividends for many years, while ignoring the apples higher up in the tree to focus on the branches down low that are easy pickings.

They'll be left with say 75% of the business with no long-term strategic plan to replace lost business or actually up their market share. But they'll have one heck of an operating ratio to show off on Wall Street for what traffic they're left with, and an attractive balance sheet with high stock prices for a time until someone has to go in and try to rebuild and plan for the future (At which point, the groups that pushed for this will have sold their shares long ago and moved on to their next victim to "turn around").

Leo_Ames wrote:At this point, any railfan knows the gameplan anyways. They only needed Harrison to implement these plans as a way to appease a segment of the investing community, since there was nothing unique with the Hunter gameplan that one couldn't learn just by reading a book. They in essence paid for a name, since dozens of others could've implemented similar policies for much less money than they were paying him. But the investors wanted Hunter Harrison's name on the door.

You rip out double track, shutter hump yards, close helper districts and make them double over hills, cease new locomotive purchases and rebuilding programs, store owned power that isn't needed 100% of the time and make up the many shortages with expensive short-term lessors, make employees buy as much of their own safety gear as possible and make safety rules more lax in the name of the bottom line, close shops and increase reliance at a markup from 3rd party outfits, centralize dispatching despite failures 15-25 years before that showed the fallacy there (Well okay, they added a new wrinkle at CSX with this one by getting dispatches to sell their homes and relocate their families, but then leaving them in limbo where they were to live out of their vehicles), fire managers on the front lines that disagree, increase dwell times and lower average speeds until enough business is driven away to restore these figures, etc.

They sadly don't need Harrison to implement his one size fits all policies to drive business away, cut reinvestment, kill off long-term planning, destroy employee morale, etc. The Harrison plan is like running a apple orchard. Stop planting new trees to replace the old since it's an extra expense and won't show dividends for many years, while ignoring the apples higher up in the tree to focus on the branches down low that are easy pickings.

They'll be left with say 75% of the business with no long-term strategic plan to replace lost business or actually up their market share. But they'll have one heck of an operating ratio to show off on Wall Street for what traffic they're left with, and an attractive balance sheet for a time until someone has to go in and try to rebuild and plan for the future (At which point, the groups that pushed for this will have sold their shares long ago and moved on to their next victim).

Well hell.......once enough of these pesky customers are driven away, CSX will be able to get away with single-tracking the
the former NYC from Albany on west to Chicago like EHH wanted to do.

Brutal.

Charlie

Leo_Ames wrote:At this point, any railfan knows the gameplan anyways. They only needed Harrison to implement these plans as a way to appease a segment of the investing community, since there was nothing unique with the Hunter gameplan that one couldn't learn just by reading a book. They in essence paid for a name, since dozens of others could've implemented similar policies for much less money than they were paying him. But the investors wanted Hunter Harrison's name on the door.

You rip out double track, shutter hump yards, close helper districts and make them double over hills, cease new locomotive purchases and rebuilding programs, store owned power that isn't needed 100% of the time and make up the many shortages with expensive short-term lessors, make employees buy as much of their own safety gear as possible and make safety rules more lax in the name of the bottom line, close shops and increase reliance at a markup from 3rd party outfits, centralize dispatching despite failures 15-25 years before that showed the fallacy there (Well okay, they added a new wrinkle at CSX with this one by getting dispatches to sell their homes and relocate their families, but then leaving them in limbo where they were to live out of their vehicles), fire managers on the front lines that disagree, increase dwell times and lower average speeds until enough business is driven away to restore these figures, etc.

They sadly don't need Harrison to implement his one size fits all policies to drive business away, cut reinvestment, kill off long-term planning, destroy employee morale, etc. The Harrison plan is like running a apple orchard. Stop planting new trees to replace the old since it's an extra expense and won't show dividends for many years, while ignoring the apples higher up in the tree to focus on the branches down low that are easy pickings.

They'll be left with say 75% of the business with no long-term strategic plan to replace lost business or actually up their market share. But they'll have one heck of an operating ratio to show off on Wall Street for what traffic they're left with, and an attractive balance sheet with high stock prices for a time until someone has to go in and try to rebuild and plan for the future (At which point, the groups that pushed for this will have sold their shares long ago and moved on to their next victim to "turn around").

Well thought through, concise, accurate. I can add nothing. Thank you.

Just my opinion here but Foote has never been a CEO before and CSX is no small undertaking. Even though he has many years in the railroad industry, his expertise is marketing, not operations.

He might have what it takes to handle this monster situation but I am guessing John McPherson will come off the board and become chief operations officer. He ran Florida East Coast, he does have the knowledge and experience on how to run the psr system as being a former protege of EHH. This is definitely going to be a touchy area with the stockholders and the board. The gamble they already took failed and might blow up in their faces

WSJ article yesterday included new details of the abrupt departure of Executive Vice-Presidents Sanborn, Eliasson, and Fitzsimmons.

The WSJ cites unnamed sources that “several top executives complained to the Board about Mr. Harrison’s leadership.”

Concerns included -

- His health.

- “Changes to the railroad that had rattled customers.”

- “Mr. Harrison’s push to scrap several projects CSX pursued with government funding.”

WSJ reports that “the Board was divided”, “but ultimately sided with Mr. Harrison.”

WSJ states that “three top executives quit”; Sanborn, Eliasson, and Fitzsimmons.

"Mr. Foote, in a call with analysts Friday, said Mr. Harrison had created enough disciples at CSX to carry out his work. About 150 executives participated in multi-day workshops called Hunter Camps aimed at encouraging managers to embrace change and new operating methods at CSX."

Disciples? Hunter Camps? It this a religious cult or a friggin business that the board is running here?

In hindsight they made a tactical mistake, complaining to Hunter's own Board about Hunter. I guess they were just fed up.

Thank goodness. That guy has run enough formerly-superior railroads deep into the ground, he didn't need a chance to get paid huge bucks to just burn out yet another one.

Hopefully not too late for CSX to get back on target- CSX was really starting to turn things around and kick NS in the rear-end post-Snow, until EHH came along and tried to revert back to the "old ways".

RMB357 wrote:Just my opinion here but Foote has never been a CEO before and CSX is no small undertaking. Even though he has many years in the railroad industry, his expertise is marketing, not operations.

He might have what it takes to handle this monster situation but I am guessing John McPherson will come off the board and become chief operations officer. He ran Florida East Coast, he does have the knowledge and experience on how to run the psr system as being a former protege of EHH. This is definitely going to be a touchy area with the stockholders and the board. The gamble they already took failed and might blow up in their faces

This long term shareholder never liked the gamble espoused by EHH, Foote et al. It only benefits the short term investors who want to buy low and sell high. I am far from wealthy, so the brokerage fees are just too high to buy or sell any stock on a frequent basis. I do worry about the decline in stock value and dividends that will surely come when CSX has to pay the proverbial piper for deferred maintenance, poor fleet management and lost customers. It's going to be a rough ride.

I also feel bad for the CSX employees and customers who are getting shafted by this "precision railroading" nightmare. They deserve better treatment.

Agree Matt. The employees and customers deserve much better. Now that Foote has been made a permanent fixture, it will be interesting to see who will be running the operations