As clock winds down, CP Rail's Harrison hunts for his dream deal
By Allison Martell and Nick Carey
TORONTO/CHICAGO (Reuters) - Veteran railroad boss Hunter Harrison has won over many critics since taking over as chief executive of Canadian Pacific Railway (CP.TO: Quote), but he still has unfinished business - creation of a consolidated North American railway - and he is running out of time to do it.
That might explain why CP, Canada's No. 2 railway with extensive operations in the United States, and the No. 3 U.S. railway, CSX Corp CSX.N, have been talking about combining, even though such a deal would face tough regulatory barriers and alarm customers.
A source familiar with the situation said the two held exploratory talks this month and are contemplating whether to take them further. Both companies have declined to comment, but CSX Chief Executive Michael Ward said on Wednesday that more big U.S. rail mergers could hurt service.
Harrison, 69, the former CEO of Canadian National Railway (CNR.TO: Quote), has touted the value of consolidation for years. He says creation of a new transcontinental railroad could improve congestion around Chicago, where east- and west-based railways meet and hand off cargo, a process that can take days.
"There is a point, and we are approaching that point right now in Chicago during winter, when you can't handle all the business. Now what are we going to do in 10 years?" Harrison said at a CP investor event on Oct. 1.
"Do we wait to get in solid gridlock and then address it?"
Harrison has spent his career preaching the benefits of tightly scheduled systems at railways across North America, first at Illinois Central, then at CN, and now at CP. A deal with CSX would add scale to the dream.
The man who hosts "Hunter camps" to personally train workers has never been shy about making sure his script is followed. At CN, a screen installed in his office let him monitor every train in the network, and he was known for calling workers directly to ask why a train was not moving. Continued...