Canadian Pacific trumpets support for recovery plan
By Susan Taylor
(Reuters) - As pressure mounts from an activist investor, the head of Canadian Pacific Railway CP.TO came out campaigning for his recovery plan - and job - on Friday, with a letter to employees that trumpets shareholder and customer support for his turnaround scheme.
The latest volley in an increasingly heated and public tussle with shareholder William Ackman and his Pershing Square Capital Management, CP Chief Executive Officer Fred Green also said the railway was keen to speed up the pace of improvements.
The letter, posted on the CP's website, did not set any new targets for the railway's lackluster performance or shed new light on the improvement plan.
Green repeated that CP expects "meaningful improvements" in its operating ratio - a key industry metric - starting in the first quarter of 2012.
"We are determined to further accelerate the pace of change at CP and to safely deliver significantly improved operational and financial results," Green's letter said.
"I think they're reaching to find things in how to respond," said Edward Jones analyst Brian Yarbrough. "There's nothing new there."
Canadian Pacific is fighting back against a planned proxy battle by Ackman, who wants the former chief executive of rival Canadian National Railway (CNR.TO: Quote) to take the reins at CP and more quickly improve its operating ratio.
CP, which lags its North American peers in the key efficiency measurement, wants to improve its operating ratio to the low 70 percent range by 2013 from 78 in 2010. Continued...