died Saturday, a day after the surprise announcement that he was placed on medical leave caused the railroad company to lose $4 billion in market value.
At the time of his death at 73 years old, Mr. Harrison left unfinished his most challenging assignment, the turnaround of CSX.
He joined the Jacksonville, Fla., railway in March of this year as CEO after he ignited a shareholder revolt by joining forces with a Wall Street activist to replace CSX’s long-serving boss and some directors.
CSX said Saturday afternoon that Mr. Harrison died from “unexpected severe complications from a recent illness.”
The railroad’s chairman,
said the company “has suffered a major loss,” but the board was confident its acting CEO and the rest of its leadership team would “capitalize on the changes” introduced by Mr. Harrison.
Ever since he took the helm at troubled Illinois Central Railway in the 1990s, Mr. Harrison earned a reputation as a driven and disruptive force in a centuries-old industry struggling with high operating costs and heightened competition from shipping rivals.
His ability to rapidly pare railway budgets, speed up freight deliveries and challenge union-backed work rules at Illinois Central, Canadian National Railway Co. and
Canadian Pacific Railway
earned him many fans on Wall Street. Unions and customers frequently challenged his harsh tactics.
The sting of his contrarian views were tempered with a caramel-rich Southern drawl and folksy stories drawn from his childhood in Tennessee, where his father, a one-time policeman, earned a living as a Traveling preacher.
Mr. Harrison said in an interview with The Wall Street Journal in early 2017 that he hoped CSX would rank as his greatest triumph because the railroad was bigger, its network more intricate and investor support more substantial than any other challenge faced in his career.
His past success with railroad turnarounds earned him such a loyal investor following that News of his interest in running CSX sparked a $10 billion surge in its market value in January. Shareholders voted in June to approve a special $84 million payment to cover lost compensation at his previous job, despite the onset of health problems that required him to use an oxygen machine and work mostly from his horse farm in Florida. He had threatened to quit were they unwilling to OK it.
His initial moves to streamline CSX’s operations were thwarted by traffic congestion, customer complaints and opposition from some of the railroad’s top officials, people familiar with the matter said.
After a series of board meetings in November, Chief Operating Officer
and two other senior officials resigned, leaving Mr. Harrison a shrunken executive team in the early stages of his ambitious overhaul. By November, Mr. Harrison was largely running the company from his home office, where he met with executives and monitored train arrivals and departures from a special bank of computer screens.
Investors saw his leadership at CSX as so integral to the railroad’s transformation that the company’s stock value dropped about $4 billion on Friday after the company announced his medical leave.
Ewing Hunter Harrison was born in Memphis on Nov. 7, 1944. His father’s gift for sermons helped shape Mr. Harrison’s management style as he rose through the ranks at a variety of railroads. To spread the gospel about his new approach, Mr. Harrison organized retreats called Hunter Camps. At these pep talks he would ask managers and employees to challenge longstanding industry practices to strip away costs and speed up the trains.
He started his railroad career while still in college in 1963 as a 19-year-old laborer squirting oil under train carriages for the St. Louis-San Francisco Railway. He then moved to Burlington Northern Railroad, reaching the position of vice president of transportation and service design. In 1993, he joined Illinois Central Railroad as a senior executive and later that year was appointed chief executive. Mr. Harrison was named chief operating officer of Canadian National Railway after it acquired Illinois Central in 1998. He became CEO in 2003.
When Mr. Harrison wanted to impress Business associates, he arranged meetings in the trophy room of his sprawling Double H horse farm near Palm Beach. Rows of shelves are stuffed with ribbons, medals and trophies earned by his jumping horses.
Scattered among the laurels are photographs of Mr. Harrison and many of the executives who helped carry him to victory with his controversial methods for shaking up laggard railroads. By the time visitors left the room, Mr. Harrison had usually made his point. “I want people to understand that I am accustomed to winning,” he told a reporter in 2015.
When he teamed up with activist
to mount a proxy battle to change the leadership of Canadian Pacific in 2012, Mr. Harrison told a crowded Toronto meeting of hundreds of investors that they could “hang me in Times Square” if he failed to deliver a more profitable railway.
“Hunter was the General Patton of CEOs,” said Mr. Ackman, who worked closely with Mr. Harrison. “He was a charismatic, awe-inspiring leader and a wonderful family man.”
Shortly after he was appointed Canadian Pacific’s CEO in 2012, Mr. Harrison set the tone for extensive changes at the railroad by telling a reporter: “There is a new sheriff in town. … He may be mean and ugly, but he knows about railroading and he is going to make this company successful.”
At the time, Canadian Pacific ranked as one of the most inefficiently operated major railroads in North America. In 2011 the railroad reported it had spent about $81 dollars for every $100 in revenue it earned, an operating ratio of 81% that lagged many of its rivals. After years of cost cutting and operational changes under Mr. Harrison, Canadian Pacific reported its operating ratio had dropped to 56.2% in the fourth quarter of 2016. Shortly after, Mr. Harrison resigned to join the proxy contest for the top job at CSX.
Mr. Harrison is survived by his wife, Jeannie, and daughters Elizabeth (Libby) Julo and Cayce Judge.
—David Benoit and Paul Ziobro contributed to this article.
Corrections & Amplifications
Canadian Pacific Railway Ltd., under Hunter Harrison as chief executive, reported a drop in its operating ratio, or dollars spent to revenue, to 56.2% for the fourth quarter of 2016. An earlier version of this article stated the year incorrectly as 2017. (Dec. 16, 2017)
Write to Jacquie McNish at [email protected]
Source : WSJ