Gardner Named Amtrak President

Amtrak said on Monday that one of its vice presidents will become its president on Dec. 1.

Stephen Gardner

Stephen Gardner, currently Amtrak’s executive vice president and chief operating and commercial officer, will replace William Flynn.

Flynn, who became Amtrak’s president and CEO in April, will remain with the passenger carrier as CEO and a member of its board of directors.

The promotion of Gardner to president had been widely expected by many rail industry observers.

Railway Age reported that Gardner has been making most of the major decisions and setting policy during his time as an Amtrak senior vice president.

His elevation to the president’s chair coincides with the election of Joseph Biden as president. Gardner, like Biden, is a Democrat.

Earlier in his career, Gardner served in staff positions for Congressional Democrats on Capitol Hill, including Delaware Senator Tom Carper.

He joined Amtrak in 2009 after having helped develop railroad and transportation policy for the U.S. Senate Committee on Commerce, Science and Transportation.

Before coming to Washington, Gardner worked for Guilford Rail System (now Pan Am Railways) and the Buckingham Branch Railroad.

Railway Age said Gardner is widely recognized as one of the principal authors of the Passenger Rail Investment and Improvement Act of 2008.

The magazine said Gardner was unlikely to become Amtrak’s president so long as Republicans controlled the White House and the Department of Transportation.

In a prepared statement, Amtrak said the change in leadership was “part of a broader set of actions taken . . . to ensure that Amtrak is well positioned for success in fiscal year 2021 and beyond.”

The statement said Gardner will lead day-to-day operations and oversee marketing, operations, planning, government affairs, and corporate communication.

Historically, Amtrak’s president has been its top executive, but during the tenure of the late Joseph Boardman the company added the CEO title to his duties.

Amtrak’s statement said the carrier faces “two urgent challenges in 2021” including weathering the COVID-19 pandemic and bolstering Amtrak’s future.

Amtrak’s presidency has been a revolving door in recent years with no one person holding the position for more than a few years.

Charles “Wick” Moorman, a former CEO of Norfolk Southern, came out of retirement in 2016 to serve as Amtrak president and CEO in what at the time was described as a transitional appointment.

Moorman became co-CEO of Amtrak with Richard Anderson in June 2017, an arrangement that continued through the end of 2017.

Anderson, a former CEO of Delta Air Lines, served as Amtrak’s top executive until being replaced in April 2020 by William Flynn, a former CEO of Atlas Air.

Amtrak to Get New President and CEO on April 15

Amtrak will get a new president on April 15 and the passenger carrier has again dipped into the airline industry executive ranks.

William Flynn

William Flynn, who will replace Richard Anderson, is currently CEO of Atlas Air Worldwide but once worked as an executive at CSX.

Flynn’s appointment was announced late Monday morning after the news was broken by The New YorkTimes.

An Amtrak news release said Anderson, 64, a former CEO of Delta Air Line and Northwest Airlines, will continue at Amtrak as a senior adviser through the end of the year.

Flynn, 66, will be the third time Amtrak president and CEO in just over three years.

Charles “Wick” Moorman, the former CEO of Norfolk Southern, stepped down on Dec. 31, 2017 and Anderson, who had been co-CEO of Amtrak with Moorman since July 2017.

Moorman had joined Amtrak on Sept. 1, 2016. He replaced the late Joseph Boardman.

Flynn held several positions at CSX between 2000 and 2002, including the post of senior vice president of strategic planning and senior vice president at CSX Transportation.

He also held senior management positions at CSX subsidiary Sea-Land Services.

Atlas has three carriers, Atlas Air, Polar Air Cargo and Southern Air. It has 3,200 employees and operates in 89 countries.

It carries air freight and operates military and passenger charter flights.

Flynn has been at Atlas for 13 years and has four decades of transportation and logistics experience

One of Atlas’ customers is Amazon. News reports indicate that Atlas has has been embroiled in tense labor negotiations with its pilots over the past three years.

The Wall Street Journal reported that Flynn’s Amtrak salary will be $475,000 and he is expected to serve as CEO for five years.

That is relatively small amount compared to the $6.9 million in compensation, including base pay and bonuses, which Flynn earned at Atlas in 2018.

Flynn received his undergraduate degree from the University of Rhode Island and a master’s degree from the University of Arizona.

East Broad Top Railroad Sold to Foundation

Looking toward the shops in Rockhill Furnace, Pennsylvania, in August 1962. You can see freight and passenger cars, EBT M-1 gas-electric car, two steamers (I believe 12 and 14), and Johnstown Traction 311. (Photograph courtesy of Robert Farkas collection)

The East Broad Top Railroad has been sold to a non-profit group whose backers include Charles “Wick” Moorman, Bennett Levin and Henry Posner III.

The sale was announced on Friday by the EBT Foundation, which will own 27 miles of the EBT from the south end of the concrete-arch bridge over the Aughwick River below Mount Union to the road crossing in Wood Township.

The foundation said it also acquired the narrow-gauge railroad’s shops, rolling stock, and equipment from the Kovalchick family.

In a news release, the parties noted that the EBT is a National Historic Landmark and is listed on the National Register of Historic Places.

Although events will be held this year, regular operations are not expected to get underway until 2021.

“This is the best possible outcome for the railroad, which has been in my family for two generations,” says Joseph Kovalchick, whose father, Nick Kovalchick, purchased the EBT after its coal mines closed in 1956.

The Kovalchick family will continue to own coal-company property that had been jointly owned with the railroad.

Kovalchick said in a statement that his father never intended to scrap the railroad after buying it.

“But it is clear that a for-profit business model is not sustainable. Our faith in the new model is reflected in both the sale and the Kovalchick family’s ongoing role on the board of the new non-profit,” he said.

Financial details of the transaction were not disclosed.

Brad Esposito, a 20-year veteran of the Buffalo & Pittsburgh led the effort to purchase the EBT.

He was joined by EBT enthusiasts David Brightbill, Lawrence Biemiller, and Stephen Lane.

Esposito will become the general manager of the railroad.

He said the EBT Foundation is committed to preserving and operating the EBT as a steam railroad that will provide education about the role of railroads in local and national history as well as help to promote local and regional tourism and economic growth.

The EBT closed in 2011 and work needs to be done to rehabilitate its tracks, locomotives and passenger cars.

This work will also include installation of a fire-suppression system in the shops and roundhouse, and stabilization of structures in the Rockhill Furnace complex.

The foundation plans to work with the volunteer group Friends of the East Broad Top, which has sought to preserve the property since 1983.

It will also work with the Rockhill Trolley Museum, a volunteer organization that since 1960 has operated over the former EBT’s Shade Gap Branch.

Also involved in advising the foundation are Linn Moedinger, former president of the Strasburg Rail Road, and Rod Case, a partner at the consulting firm Oliver Wyman who leads its railway practice.

The Allegheny Ridge Corporation, which manages the region’s state-designated Heritage Area, was also listed in a news release as a supporter of the foundation.

The EBT was built between 1872 to 1874 to haul coal to a new iron furnace in the center of the state. At one time it also interchanged coal with the Pennsylvania Railroad.

The 33-mile EBT survived the collapse of the local iron industry at the turn of the 20th century and was purchased in 1956 by the Kovalchick Salvage Company of Indiana, Pennsylvania.

The railroad has a gauge of 4 feet, 8.5 inches and is the the only original narrow-gauge railroad surviving east of the Rocky Mountains.

Its shops complex dates to the 1880s and was expanded between 1905 and 1907.

Housed in the roundhouse in Rockhill Furnace are six narrow-gauge steam locomotives built for the EBT by Philadelphia’s Baldwin Locomotive Works between 1911 and 1920.

The roundhouse also contains an M-1 gas-electric car built in 1927 with plans and parts from Philadelphia’s J.G. Brill Companyand Westinghouse Electric.

The EBT passenger car fleet is believed to date to the 1890s.

Track remains in place over nearly the entire 33-mile main line between Robertsdale and the former PRR connection in Mount Union.

Norfolk Southern now operates the former PRR mainline between Harrisburg and Pittsburgh.

The railroad’s new website is eastbroadtop.com

Searching for a Balanced Portrait of EHH

I’m not sure I’ll spend $28 plus tax to buy Howard Green’s book about E. Hunter Harrison titled Railroader: The Unfiltered Genius and Controversy of Four-Time CEO Hunter Harrison.

More than likely I’ll check it out from a library.

Reviews of the book at the Trains and Railway Age websites suggest it would be worth the time to read Green’s book.

If nothing else, I’m curious if Green created the balanced portrayal I’ve been seeking about Harrison.

Harrison is someone about whom there doesn’t seem to be much middle ground although the editor-in-chief of Railway Age, William C. Vantuono, came close to that in an overview written shortly after Harrison’s death.

Much has been written about Harrison over the years in the railroad trade press and business press in the United States and Canada.

No other living railroad CEO approaches the stature of Harrison. Not even Charles “Wick” Moorman the retired CEO of Norfolk Southern and Amtrak who is much revered by railfans has the larger than life eminence that Harrison had.

The cover story of the August 2018 issue of Trains focused on Harrison’s time at Canadian Pacific. A sidebar story asked whether Harrison was the most misunderstood man in railroading.

That piece quoted only railroad executives or investors who had been part of Harrison’s inner circle.

They had some interesting things to say about Harrison, but, of course, they tended to adore him. That’s no surprise. They owed much of their career success to Harrison.

Keith Creel, who followed Harrison into the CEO chair at Canadian Pacific said,”if  you knew him, you loved him. If you didn’t know him, you probably misunderstood him.”

CP chairman Andrew Reardon said that behind Harrison’s gruff persona was a heart of gold.

Mark Wallace, who served as Harrison’s chief of staff at CN, CP and CSX, said Harrison’s charitable nature was overlooked, pointing out that since 2014 CP contributed more than $12 million to charities, including children’s hospitals.

Harrison’s “heart of gold” might be news to the thousands of men and women who lost their jobs due to his cost cutting and obsession with running an efficient railroad.

Creel had it at least half right. Some loved Harrison but others didn’t and it wasn’t because they misunderstood him.

Actually, his adversaries and critics understood Harrison quite well. Perhaps it is Hunter’s supporters who need to understand a few things.

Therein lies the challenge of assessing Harrison’s legacy. What you think of Harrison hinges on how his edicts, personal style and management philosophies affected you.

If he made you a lot of money, you think Harrison is God. If he laid you off, you think he is Satan.

Harrison achieved great success, but at what cost? Harrison is not misunderstood so much as he had the ability to attract attention in ways that few can and do.

To fairly assess Harrison’s legacy will take an analytic mind and an ability to see past the love and hatred that he engendered in so many.

It also will take time, which has a way of putting things into context and helping authors to take the longer view.

All great men and women have abilities and drive that average people lack. They are able to parlay those things to great advantage by seizing the opportunities that come their way and creating opportunities where none seem to exist.

Harrison may have been the genius that his supporters claim he was and at the same time the ogre that his critics considered him to be be. Somewhere between those extremes is another portrait. Maybe Green was able to show that and maybe it is a story still waiting to be told.

I’ll be looking for that when I finally get my hands on Green’s book.

Some Doubt Private Investment Will Help Rails

Private sector investment in railroad projects is unlikely, a congressional committee was told this week.

The comments were made at hearing held by the U.S. House Transportation and Infrastructure subcommittee hearing on rail infrastructure on a proposed Trump administration infrastructure renewal plan.

The Trump plan would rely on private investment as well as public funding.

The witnesses at the hearing said that the federal and state governments can be expected to play a role in sustaining and expanding the nation’s rail network, but the private sector is unlikely to be much of a player when it comes to railroad investment.

“What you’re talking about clearly goes beyond what the private sector at this point is prepared to do,” said Ed Hamberger, president of the Association of American Railroads.

In particular, Hamberger referenced the capital needs of Amtrak. The carrier’s co-CEO, Charles “Wick” Moorman had told the committee that the critical, huge infrastructure projects that Amtrak faces will require federal investment.

Without that, Moorman said, the system runs out. “We can do a lot of work on state of good repair, we can improve the way we spend money, but it’s going to take a lot of federal investment,” he said.

“I think Mr. Moorman’s needs go far beyond what the private sector can do,” Hamberger said.

One news report said that Democrats on the subcommittee pushed for public funding of intrastructure projects while Republicans members remained silent about that.

Even President Trump has reportedly expressed doubt about the scope of the private sector’s role in infrastructure rebuilding.

Trump reported said during a closed meeting of the House Ways and Means Committee that public-private partnerships were not the solution for repairing the nation’s roads, bridges, and ports.

The Trump administration has been talking investing $200 billion in federal fund to leverage $800 billion of private investment. However, details about that plan have yet to be announced.

“I understand that the private sector has a role, the states have a role, but I think the federal government has to have a bigger role,” said U.S. Rep. Albio Sires, D-N.J. “Without the support of the federal government, I don’t think these projects can be done. Does anyone here believe that the private sector is the sole answer to this? If you do, please tell me, because I don’t believe this.”

Moorman Upbeat on Passenger Rail Future

Amtrak President Charles “Wick” Moorman gave an upbeat assessment of the future of passenger rail even as he acknowledged that the passenger carrier faces challenges fixing decaying infrastructure in the Northeast Corridor.

Speaking to the National Press Club in Washington, Moorman said Amtrak’s need for federal funding was no excuse for not operating “like a great company.”

Moorman

Nonetheless, Moorman said that getting pressure from government officials and tight budgetary resources have taken their toll.

He said that in the 1990s and 2000s Amtrak lost sight of its customers as a result. As an example he cited carpet cleaning.

Amtrak saved $1 million by not shampooing the carpets in its passenger cars as often, but passengers noticed the dirty carpets.

“That’s not the experience we want to create for our customers,” he said.
Providing a better customer experience has been one of four focuses that Moorman has brought to Amtrak after becoming its president last year.

“The customer experience is ticketing, the station, our employee interactions, and our equipment,” he said.

The equipment used by Amtrak is, in Moorman’s words, starting to look “stale,” but the carrier has taken steps to improve it. “It’s old, but that doesn’t mean it can’t be good,” he said.

Moorman said rail passenger transportation in general is not a particularly good business model.

The creators of Amtrak chartered it as a for-profit corporation even though they knew it was not a good business model.

However, Moorman said, they sold it to President Richard Nixon and the Congress at the time as a concept of “create this and [it] will become profitable.”

In essence, Moorman said Amtrak is a government contractor that unlike other contractors can’t always present to government officials a bill that factors in the costs of doing business plus a profit to benefit shareholders.

“We rely on what are in effect user fees – passenger fares,” he said. “And because the marketplace doesn’t sustain the passenger fares we need to make that profit, we ask the government to make up the difference.”

Among Amtrak’s many challenges Moorman said the one that worries him the most is the aging Northeast Corridor infrastructure.

He said the NEC has eight major bridges and only one is younger than 100 years old. The B&P Tunnel in Baltimore is 127 years old and well past its “sell-by date.”

Moorman expressed confidence that the idea of having a national rail passenger network is taking hold and predicted the development of more corridors offering rail passenger service between urban areas.

He also circled back to the need to provide good customer service.

“For 46 years, a lot of people [at Amtrak] were there trying to keep the flame alive, understanding that someday the world would come to the point where people started to say, ‘We really need to have passenger rail as an option.’ I think that day has come,” Moorman said.

“The better we run Amtrak, the better we deliver on projects, the more people understand how good our company is, the easier every funding conversation is,” he said.

In a related note, Moorman said disruptions at New York’s Penn Station may extend into the fall.

He told the New York Post that Amtrak has the ability to finish the remaining work at Penn Station with subsequent weekend outages extending beyond the planned July to early September work curfew.

“We’ve done an exceptional and extraordinary amount of planning on the material side and we know it all fits, and we have a lot of skilled people,” he said.

After those repairs are concluded, Moorman said Amtrak will need to to schedule signal and power system repairs at a later date.

Moorman’s Letter to Amtrak Employees

Charles “Wick” Moorman became president of Amtrak on Thursday, Sept. 1, 2016. He wrote the following letter to Amtrak employees. Make of it what you will.

Wick Moorman

My name is Wick Moorman and it is a pleasure and a privilege for me to be joining you as your new CEO.

I want to start my time at Amtrak by saying how honored I am to follow Joe Boardman. I’ve known Joe for many years, and his work at Amtrak and FRA has left us a strong and useful legacy to build on. During his eight years in leading the company, Amtrak delivered record ridership and revenue levels, while making critical investments in our assets and our people to prepare for future growth. That success is a testament to the strength of the entire Amtrak team, and to Joe’s commitment to leaving Amtrak stronger than when he arrived. That’s what I hope to accomplish myself as your new CEO, as we work together to make Amtrak a safer, more efficient, and modern company, that’s growing our business and delivering increasing value to our customers and the nation.

Let me tell you a little bit about myself, and why I have chosen to come to Amtrak.

The first thing you should know about me is that I am a life-long railroader, and from childhood I have been fascinated by the technology and romance of our business. After high school, I studied civil engineering at Georgia Tech and was fortunate enough to obtain an engineering co-op position with the Southern Railway, one of Norfolk Southern’s predecessors. Upon graduation from Tech, I joined Southern full-time as a management trainee in the Maintenance of Way department, where I was first put to work on a track gang to ensure that I knew the railroad from the ground up! It was a great way to start, and for the first 12 years of my career I worked in Southern and then Norfolk Southern’s Maintenance of Way department as a track supervisor and then as a division engineer.

Those years served as a wonderful foundation for my over four-decade career with Norfolk Southern. After a brief stint in business school, Norfolk Southern gave me the opportunity to work in transportation, human resources, labor relations, IT and strategic planning. These experiences helped me to understand what it truly takes to run a great railroad and prepared me to become Norfolk Southern’s CEO in 2005. Over the next 10 years, our company went through a period of significant change. Together, we continued to improve our safety culture. We introduced new technology and found new ways to become more efficient. And we completed several rail corridor projects that would help us grow our service capabilities and revenue levels for a long time to come.

I retired quite happily last year, with no intentions of working full-time again, but then was approached about the possibility of leading Amtrak. I started my career in the summer of 1970, not long before Amtrak started to operate. It is not an exaggeration to say I have followed Amtrak since Day One – and while my background is in freight, I have a deep appreciation for passenger rail and have ridden passenger trains all my life. Amtrak provides a great and necessary public service. It keeps people moving and businesses strong in the Northeast Corridor, and it provides connectivity and mobility to 46 of the 48 contiguous states throughout our National Network. Furthermore, as our country’s transportation needs continue to change and grow, there is more and more public interest in passenger rail service everywhere. Together, we can continue to transform Amtrak. We can expand and grow our company in ways that will help us meet these new demands, and make Amtrak the leading rail passenger carrier worldwide.

As I have talked to people over the years about my life and career, I have always stressed how extraordinarily fortunate and blessed I have been! The opportunity to become CEO of Amtrak is another chapter in that story of great good fortune, and I am excited to be starting today.

My immediate priority in the next 60 days as I transition into the new role is to spend time with the leadership team and to get out and see as many of you as I can, in order to get a better understanding of what we do, and how we do it. I also encourage all of you to let me know your thoughts on what we can do together to improve the company.

I will be communicating more with you as we close out fiscal year 2016 and kick-off fiscal year 2017. For now, thanks for everything you’re doing to keep Amtrak rolling, and I look forward to seeing you somewhere out on the railroad.

Sincerely,
Wick Moorman

Moorman to be Next Amtrak President

Former Norfolk Southern head Charles W. “Wick” Moorman has agreed to become president of Amtrak effective Sept. 1.

Moorman, who retired as president and CEO of NS in 2015, will replace Joseph Boardman.

In announcing Moorman’s appointment, Amtrak said he had agreed to take a $1 yearly salary but will be eligible for a $500,000 annual bonus if meets specified performance goals.

Moorman would be the third Amtrak head to take over after serving as president of a Class I railroad.

Graham Claytor Jr. served as Amtrak president from 1982 to 1993 after having previously been president of the Southern Railway.

Alan Boyd was president of Amtrak between 1978 and 1982 and had been president of the Illinois Central Railroad.

“I view this as public service,” Moorman told Railway Age Editor-in-Chief William C. Vantuono. “Amtrak is important to the freight rail carriers, and to the country. This is something I really want to do, and I believe I can contribute to making Amtrak a better railroad. I’m sure the work will be interesting, and I hope it will be fun as well.”

Moorman said he did not take the job for the money or because he had been unhappy in retirement.

In a news release, Moorman said he agreed to take the position because, “it is an honor and privilege to take on the role of CEO at Amtrak, and I look forward to working with its dedicated employees to find ways to provide even better service to our passengers and the nation. At Norfolk Southern, our team fostered change by placing a solid emphasis on performance across all aspects of our business, which helped develop a stronger safety and service culture throughout the company. I look forward to advancing those same goals at Amtrak and helping to build a plan for future growth.”

Moorman has more than 40 years in the railroad industry with NS and the Southern.

He began his railroad career working on a track gang during college and became a management trainee after graduation.

Moorman is a graduate of Georgia Tech University and the Harvard Business School.

He serves on the boards of Duke Energy Corporation, Chevron Corporation, the Virginia chapter of the Nature Conservancy, and the Georgia Tech Foundation.

He had held the post of NS executive chairman until late 2015.

“Wick Moorman is a proven railroader whose track record of success demonstrates his commitment and adherence to rail safety, efficiency and service to customers,” said Association of American Railroads President and CEO Ed Hamberger in a statement. “His contributions and leadership in the freight rail industry, I believe, will advance the working partnership the freight railroads have with Amtrak. The AAR and its freight rail members recognize the importance of Amtrak as a reliable U.S. passenger rail service and look forward to working with Wick in his new capacity.”

Amtrak Board Chairman Anthony Coscia said in a statement, “We are very pleased that someone with Wick’s experience and vision will lead Amtrak during this critical period as the company charts a course for future growth and improvement.”

Coscia expressed optimism that Moorman would improve Amtrak’s relationship with its host freight railroads.

“He clearly understands both worlds, and he’s going to be in a position to try to get us all to a much better place,” Coscia said.

CP Issues White Paper Making the Case for ‘Precision Railroading’ at Norfolk Southern

Canadian Pacific has given Norfolk Southern stockholders a reading assignment in advance of the NS annual meeting on May 12.

In a white paper, CP seeks to make the case for how its “precision railroad philosophy” would improve NS operations by transforming it from an “industry laggard to leader.”

“Politicians, shippers and others are calling for a strong, healthy and high-performing rail system yet no one has the stomach to challenge the status quo,” said CP CEO E. Hunter Harrison in the paper. “Clearly, moving goods reliably and efficiently is top of mind for everyone in the industry; we believe precision railroading and a CP-NS combination address those challenges.”

The white paper, which was part of a series that CP has issued over the past few months to make the case for its proposed takeover of NS, said that precision railroading has enabled CP to reduce its operating ratio, improve service, reinvest record amounts of dollars in its network and create “significant shareholder value.”

A PDF version of CP’s latest white paper can be downloaded at http://www.cpconsolidation.com.

CP described precision railroading as a tried and tested approach that has already transformed two of the worst-performing Class I railroads into top performers.

The latter was a reference to CP and Canadian National, where Harrison was CEO for several year. Harrison also applied his precision railroading approach at the Illinois Central when he headed that railroad before moving to CN.

“Over the last 20-plus years, Mr. Harrison’s execution of precision railroading has transformed three Class I railroads into the best-run railroads in the world,” CP’s white paper said. “The likelihood is high that, under his leadership and guidance, NS can achieve similar success and perform far better than its management currently believes possible.”

The white paper noted that the previous management of CP had claimed during a 2012 proxy fight with Harrison and financier Bill Ackman of Pershing Square Capital Management that precision railroading would not work at CP.

“But precision railroading is a set of non-discriminating principles that can be effectively applied to any railroad in the world,” the white paper asserts. “Geographic, network, and business mix differences are irrelevant in the application of the underlying principles that guide day-to-day decisions.”

Harrison has stated that his operating philosophy has five foundations of improving customer service, controlling costs, optimizing asset utilization, operating safely, and valuing and developing employees. “These five foundations can be applied to any railroad with the same result,” the paper said.

The white paper said that after implementing precision railroading practices, CP was able to slash transit times, increase system velocity and reduce terminal dwell times.

By increasing efficiency, CP cut its locomotive fleet size by 40 percent and saw its operating ratio fall from 81 percent to 61 percent.

“The prevailing view in the rail industry is that more locomotives, more cars and more crews allow for the movement of more volume,” CP said. “Precision railroading challenges this view.

“Because track and yard capacity is finite, adding more equipment creates congestion and slows down the system. While it may sound counterintuitive, reducing fleet size actually enables a railroad to move more volume. By running fewer and heavier trains, faster and on schedule, assets can be utilized far more productively and can yield significant savings.”

As an example of how precision railroading has worked, CP said it has increased domestic intermodal traffic by 19 percent between 2012 and 2015.

CP claims it could achieve $1.2 billion annual savings at NS by shifting it to the precision railroading model.

Among other things, Harrison has suggested that NS would be able to mothball up to a third of its locomotive fleet.

NS CEO James Squires, though, has described precision railroading as a “short-term focused operating model” that would result in service deterioration, diversion of traffic to trucks, and a loss of service-sensitive customers.

Squires said that the CP approach would mean unacceptably deep reductions in capital spending and employment levels.

NS has begun to implement its own five-year strategic plan to gain $650 million in annual savings by 2020 by reducing expenditures, seeking new traffic and increasing profitability.

CP interests are sponsoring a resolution to be voted on by NS shareholders that would direct NS management to discuss a merger with CP.

The resolution is non-binding and the NS board of directions is opposing it. The NS board also has rejected three offers from CP to buy NS stock.

Trains magazine interviewed a former CP executive who said that Harrison deserved some, but not all of the credit for improvements since he took over after the 2012 proxy fight.

The executive, who Trains did not name, said that under CEO Fred Green, CP had begun making progress by cutting $80 million from equipment rental payments, saving $150 million for the pension plan, closed intermodal terminals, reduced fuel consumption and begun operating longer trains with the use of distributed motive power.

“We were a lot further along the curve than people realize,” the former executive said.

The executive, though, did give Harrison and his team credit for being more aggressive through such moves as shutting down humps in several yards.

“Hunter’s a good railroader. He gets it,” the former executive said. “He drives the assets.”

The former CP executive operational efficiency and cost-cutting were not the sole drivers of CP’s rebound.

“Fundamentally the franchise needed top-line growth,” the former executive said. “CP needed to flex its muscles in terms of pricing. It’s done that well.”

Even before Harrison had arrived, CP management has discussed whether it was being aggressive enough with above-inflation pricing.

After Harrison arrived, CP’s total revenue increased by 18 percent between 2012 and 2015 although its total carloadings fell by 1.5 percent.

During that same period, CN saw its total revenue rise by 27 percent and its traffic grow by 8 percent. Last year CN led North American Class 1 railroads with the lowest operating ratio at 58.2 percent.

Whether the success of CN and CP in using precision railroading would translate well at a U.S.-based Class 1 remains an open question.

Trains magazine quoted railroad analyst Anthony Hatch as saying that it is not possible to draw conclusions about the growth rates of CP and CN due to their different traffic mixes, particularly their bulk and carload business.

“But you can say that CN has done a terrific job leveraging the precision railroading legacy of EHH into the New Model Railroad — one that combines efficiency, productivity, and marketing to grow faster than the rails as a whole, transports as a whole, and the continental economy,” Hatch said.

A former NS executive, though, is not enthusiastic about precision railroading as it might apply to NS.

In an interview with Trains, former NS CEO Charles “Wick” Moorman called precision railroading a recipe for disaster.

“If Hunter puts out an order to park 700 locomotives, I don’t even give it a week,” Moorman said. “The service would collapse. It’s just that easy.”

Moorman to Step Down as NS Chair on Oct. 1

Norfolk Southern announced on Tuesday that Charles W. “Wick” Moorman will step down as executive chairman of the board of directors on Oct. 1 and retire as an NS employee on Dec. 31.

Moorman will serve as senior adviser to NS President and CEO James A. Squares until the end of this year.

“I speak for the 30,000-strong Norfolk Southern team in expressing our gratitude for Wick’s leadership, friendship, and vision over some of the most remarkable years in Norfolk Southern’s history,” Squires said in a statement. “Thanks in great part to him, Norfolk Southern and the railroad industry are far more modern in our thinking, more technologically advanced in our operations, and more thoughtful in managing our footprint for our business partners and those we serve.”

“Simply put, Wick’s imprint is unique and indelible,” said Steven F. Leer, the NS lead independent director. “It is my great honor, on behalf of Norfolk Southern’s entire board, to offer congratulations and best wishes to Wick and his family.”