CP Rail’s Harrison details new plan to cut nearly quarter of workforce - Polidicks

[QUOTE]Around mid-July, just weeks after Hunter Harrison took over as chief executive of Canadian Pacific Railway Ltd., the venerable railroader met with about 30 of the company’s general managers. The straight-talking Tennessee-native, never one to mince words, made it clear he wasn’t happy. Those in attendance said he looked around and told them matter-of-factly he’d need only about half of them — at the most. It was perhaps the first salvo in a war Mr. Harrison, 68, has launched against bureaucracy and inefficiency at CP. His plan of attack will be laid out at a two-day investor meeting this week in New York City. Improving the railway’s operations will include cutting the company’s workforce by nearly a quarter over the next four years and effectively putting a “For Sale” sign on major parts of its network. I’ve been doing this for 46 or 47 years, and I’ve been damn successful at it Those were just some of the measures Mr. Harrison highlighted in an exclusive interview with the Financial Post ahead of the meeting. After five months on the job, he was even more certain he’ll reach his objectives at the country’s second-largest railroad, and he sent a message to those who doubt him. “I’ve been doing this for 46 or 47 years, and I’ve been damn successful at it,” he said. “I don’t know how they’re in a position to argue with me.” “Anybody that doesn’t believe it can place a bet in Vegas, because they’re going to start taking odds on it.” Mr. Harrison was appointed CEO of CP at the end of June after a lengthy proxy battle waged by Bill Ackman’s Pershing Square Capital Management L.P. to see him replace Fred Green in the role. During the fight, several CP board members including former chairman John Cleghorn, became casualties. With the current board firmly in his corner, Mr. Harrison is pressing ahead with his plans for the railway and surrounding himself with a team he said will help him reach his goals. Throughout the campaign, Pershing Square and Mr. Harrison maintained they would be able to hit a 65% operation ratio — an important gauge of the company’s profitability that measures operating costs as a percentage of revenue — by 2015. The lower the figure, the better, and CP’s operating ratio was stuck at a stubbornly high 81% in 2011. Mr. Harrison said because he got a later start than expected, the company now is targeting a mid-60s operating ratio by mid-2016. That could range from 64%, in the case of strong economic growth, to as high as 67% if the economy dives again, he said. “The range is still mid-60s, which I think would be a pretty outstanding performance,” Mr. Harrison said, adding that CP is already ahead of schedule on the way to meeting that goal. Analysts have speculated that an improvement of that magnitude could drive CP’s share price up to between $140 and $160 from around $90. CP also wants to generate up to $1.4-billion in free cash flow annually by 2016 as revenue grows and costs come down, Mr. Harrison said. Mr. Harrison has set a road map that will dramatically revamp CP’s operations, stripping hundreds of excess locomotives and rail cars from its operations and increasing the average train length to 8,000 feet and 8,000 tons from an average of 6,000 feet and tons when he took over.[/QUOTE] [url=http://business.financialpost.com/2012/12/04/exclusive-cp-rails-harrison-details-new-plan-to-cut-nearly-quarter-of-workforce/]Source[/url] [IMG]http://financialpostbusiness.files.wordpress.com/2012/12/hunter-harrison.jpg?w=620[/IMG]

Ugh, I want rail in Canada to be an attractive transportation choice for people and cargo. I hope they know what they are doing.

[QUOTE=OogalaBoogal;38718959]Ugh, I want rail in Canada to be an attractive transportation choice for people and cargo. [/QUOTE] It hasn't been a viable (or affordable) alternative for half a century.

[QUOTE=MIPS;38719863]It hasn't been a viable (or affordable) alternative for half a century.[/QUOTE] But I wish it was.

I'd prefer to see CN take the lead. They always had some really inspiring ideas on what rail transit would be. [img]http://www.grahambleathman.co.uk/images/Canadianmonorailmed.jpg[/img]

[QUOTE=MIPS;38723197]I'd prefer to see CN take the lead. They always had some really inspiring ideas on what rail transit would be. [img]http://www.grahambleathman.co.uk/images/Canadianmonorailmed.jpg[/img][/QUOTE] Those totally look like dicks lol.

[QUOTE=IKTM;38723390]Those totally look like dicks lol.[/QUOTE] [img]http://facepunch.com/image.php?u=446107&dateline=1315344148[/img]