CSX Chief Said to Be 'Fully Engaged' -- WSJ
An undisclosed medical condition hasn't slowed CSX Corp. Chief Executive Hunter Harrison from modernizing and disrupting longstanding practices at the railway, the company's chief financial officer said Thursday.
Mr. Harrison's health has been a point of concern among shareholders since the 72-year-old with a history of medical problems joined with an activist investor to take the helm of CSX in March.
Chief Financial Officer Frank Lonegro dismissed concerns over Mr. Harrison's use of a portable oxygen machine, saying that Mr. Harrison is working tirelessly and pushing managers to make significant changes in just 10 weeks at the helm.
"I've gotten a dose of leadership when he had supplemental oxygen. I've gotten a dose of leadership when he hasn't had supplemental oxygen," Mr. Lonegro said at an industry conference. "They were equally blunt and equally as effective."
One of the most visible changes is the closure of hump yards that sort long freight trains, a costly and time-consuming process where trains roll down a hill to be built at their next destination. CSX has already closed five of 12 humps, and Mr. Lonegro said that CSX could be left with between two and four such facilities, long considered essential to running a railroad.
"Hunter has totally debunked that in our minds," he said. "Hunter's philosophy is move the freight as fast as you can as far as you can and touch it as few times as you possibly can."
The results are already evident, he said, with trains moving faster, dwelling in terminals for shorter periods and leaving and arriving on time more frequently.
Still, Mr. Harrison's health looms over the company, especially ahead of a June 5 shareholder vote on paying $84 million to make up for compensation that Mr. Harrison forfeited when he left Canadian Pacific Railway Ltd. to pursue the top job at CSX.
Mr. Lonegro told investors that Mr. Harrison's health isn't an issue.
"He is fully engaged in the business," he said. "He is deeply and intimately involved."
Mr. Harrison has declined to discuss his medical condition, but told the Journal that doctors have cleared him to work, and that he is able to lead a turnaround of the big U.S. railroad.
"Don't judge me by my medical record; judge me by my performance," he said this week.
Mr. Harrison took a medical leave in 2015 after leg surgery and a bout of pneumonia. He has a four-year contract with CSX but has threatened to quit if his pay package is rejected.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
May 19, 2017 02:47 ET (06:47 GMT)