CP Rail blames derailments on 'internal flaws,' investing in safety
By Solarina Ho
TORONTO (Reuters) - Canadian Pacific Railway said on Wednesday the recent derailments of trains carrying crude and potash were caused by broken wheels and a broken rail, and the company was investing in technology to prevent such problems in the future.
Speaking at the company's annual general meeting in Toronto, Ontario Chief Executive Officer Hunter Harrison said the recent accidents were the result of "internal flaws" and were avoidable.
"You can always prevent them, but they were internal flaws in both the rail and the wheel," Harrison told reporters after the meeting.
Repeating comments made when CP reported its quarterly results last week, Harrison said CP's safety record has improved in terms of the severity of accidents - the railroad defines a severe accident as a derailment on its main track network involving three or more cars.
Harrison took over last year after a bitter proxy battle between CP and New York activist shareholder William Ackman resulted in both CEO Fred Green and Chairman John Cleghorn stepping down.
"What a difference a year makes," Harrison, an industry veteran with a history of turning around struggling companies, told shareholders. "We're on the way to becoming again the best railroad in North America."
Last week, CP reported its best first-quarter result in its 132 year history. Shares, which were down 1.9 percent on Wednesday, have climbed some 70 percent since Harrison took charge last June.
Harrison said he expected to stay at the helm for another 2 1/2 to 3 1/2 years before handing the reins to chief operating officer, Keith Creel, a decades-long protégé of Harrison's.
(Reporting by Solarina Ho; Editing by Janet Guttsman and Kenneth Barry)
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