CSX as an inevitability


Posted On: May 15, 2018
Posted On: March 01, 2018
Posted On: February 22, 2018


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Mar 01, 2018
Among the seven surviving Class I railroad companies operating within these United States today, the one which has long stood out as the most virulently anti-passenger is CSX Transportation.

That road's overt efforts at undermining passenger train services wherever possible eventually came to be expected.  What's surprising is how the company has now turned on itself.

Certainly, the presence of hedge fund managers in CSX's headquarters a year ago clearly indicated what direction the board wished to take their hapless charge.  Worse yet, arriving with the slash-and-burn crowd was one E. Hunter Harrison, well known for using his "Precision Scheduled Railroading" ruse to bleed companies dry.

After Harrison suddenly died last December of a still-undisclosed illness, his hand-picked successor - one James Foote, who just happens to have absolutely no experience running a railroad - declared his intention to continue sailing toward the iceberg.

It's only a clump of frozen water!

Today, at CSX's annual investor and analyst conference in New York City, Foote claimed that "substantial opportunities exist to further optimize the network, leverage excess capital, create savings and grow our franchise."  Scary words, those.

According to Reuters, the leaders of CSX are determined to "outline a path forward" after Harrison's demise.  With that goal in mind, the railroad's management team has provided investors with a "longer-term plan for boosting profitability and streamlining operations."

I wonder.

How can the so-called "leaders" of CSX "outline a path forward" when they long ago lost their own way?

How can anyone have confidence in management's "longer-term plan" when their long term plan to follow the guidance left by E.H.H. has already been disclosed?

How can a railroad expect anyone else to believe in its product when its officials really don't believe in it themselves?!

"Boosting profitability" is just newspeak for operating a business with the singular goal of inflating the corporation's price per share - at least 'til the major players have a chance to make a killing.  "Streamlining operations" means sacking more employees and abandoning more infrastructure.  Is Foote and his "team" really that brain dead, or are they simply convinced everyone else is?!

So far, instead of bringing "significant operational and financial benefits," Precision Scheduled Railroading has done little but alienate once faithful customers and awaken once tranquil regulatory agencies.

In response to problems like these, the Canadian Pacific - another Class I victim of Hunter Harrison - has decided to go on a self-described "charm offensive" in an effort to apologize its way to prosperity.

Sadly, this "charm offensive" is bound to fail, "longer-term."  Fools can be quite charming, but they can't effectively run a railroad.

In Tuesday's Wall Street Journal, we learned Foote's charm plan is to "get on an airplane, go to someone's office with my hat in my hand and say, 'I'm sorry about last year, we screwed up and we didn't do a really good job for you'."

If the shippers subjected to this charade have the best interest of their OWN shareholders in mind, they should respond, "NO, you did a BAD job - and it wasn't a screw up; it was premeditated!  Your sorrow doesn't deliver our freight and your reassurances for the future are absolutely worthless."

If I had an opportunity, I'd also ask Foote about the last time he was out on the property.  Instead of getting on a airplane, why doesn't he get out on his RAILROAD and ride over a few of CSX's subdivisions, talk to the front-line people respectfully AS FELLOW HUMAN BEINGS and actually witness the system's current issues in an up-close-and-personal fashion?!

You know, that's one way a nice business car can come in handy!

Alas, it is not to be.

According to an article in today's New York Times, Foote made another statement to those big city investors.  In eight words, he demanded their attention and loyalty, daring his audience to try and look away.  At once, it's difficult to watch, yet impossible to ignore.  Sort of like the proverbial train wreck.

"What are we here for? To make money!"

What a raison d'etre.

Fooey on Foote.  If the board hasn't taken action yet, then it won't now - and with no offence toward current and retired employees intended, CSX deserves whatever it gets.

Garl B. Latham