CSX Shakes Up Management Team, Hires New Operating Chief -- Update

By Paul Ziobro Features Dow Jones Newswires

CSX Corp. is shaking up its management ranks, replacing several top executives and bringing in a new operating chief from one of Chief Executive Hunter Harrison's past railroading stops.

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The changes come as the railroad, one of two major operators east of the Mississippi River, has been working to fix services issues after Mr. Harrison took over the company earlier this year and revamped its operations.

On Wednesday, CSX said James Foote is joining as chief operating officer and will take over all duties currently overseen by longtime CSX executives Cindy Sanborn, who currently serves as COO, and Fredrik Eliasson, currently chief sales and marketing officer. Both Ms. Sanborn and Mr. Eliasson will resign next month.

Mr. Foote, 63 years old, served as head of sales and marketing at Canadian National Railway Co. during Mr. Harrison's stint turning around the railroad from 2003 until 2009. More recently, he served as CEO of Bright Rail Energy, which is developing a product to help existing locomotives run on natural gas.

Mr. Harrison said the new executive's deep understanding of and experience with his so-called precision scheduled railroading philosophy was a key reason for adding Mr. Foote as his top lieutenant.

Mr. Harrison's network changes led to widespread delays and congestion for most of the summer months, leading to a hearing before federal railroad regulators earlier this month. The CEO blamed some of the problems on pushback from some employees as well as derailments. He has said the service issues have been mostly resolved.

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The appointment of Mr. Foote may clear up some, but not all, questions around who could one day succeed Mr. Harrison at the top of CSX, a topic that has dogged the company since the new chief took the top spot in March.

The 72-year-old Mr. Harrison has an undisclosed health condition that limits his travel and requires him to frequently use an oxygen tank. His health has concerned investors and was an issue during his hiring as much of the fortunes of CSX are tied to Mr. Harrison's skills in executing the turnaround.

Mr. Harrison last week said the company would likely have more answers ahead of a presentation to analysts that it had scheduled for Oct. 30, but he said Wednesday it would be postponed to "a later date." While Mr. Foote is a clear No. 2, Citi analyst Christian Wetherbee said he may not be the long-term answer to succeed Mr. Harrison. The appointment does provide more experience to help implement the turnaround that has hit bumps in the early stages.

Ms. Sanborn, a 30-year CSX veteran, and Mr. Eliasson, who spent two more than decades at the railroad, were once seen at top candidates to run CSX. On Wednesday, CSX also said its general counsel, Ellen Fitzsimmons, will retire next month.

Later Wednesday, CSX said it would buy back $1.5 billion in shares.

Write to Paul Ziobro at Paul.Ziobro@wsj.com

(END) Dow Jones Newswires

October 25, 2017 18:32 ET (22:32 GMT)