Posts Tagged ‘Hunter Harrison’

What Now for CSX? Foote Seen by Analysts as Staying as CEO, at Least in the Short Term

December 19, 2017

It remains an open question whether James. M. Foote will lead CSX long term, but many analysts believe the CSX board of directors will keep him in the short term as acting CEO in order to provide stability.

Foote became the acting CEO last Thursday after CEO E. Hunter Harrison took a medical leave of absence for a still undisclosed illness. Harrison died at his Florida home on Saturday.

“I do expect Jim to be named CEO, although I also think the board will proactively study (and look to fill) any gaps in the team,” said Taylor Glasebrook, associate portfolio manager at Neuberger Berman, the No. 8 shareholder in CSX with 10.5 million shares.

“We believe that Mr. Foote’s presence in the senior leadership team provides an important source of continuity,” Cherilyn Radbourne, a TD Securities analyst, wrote in a note to clients.

But Radbourne also noted, as have others, that Foote lacks experience in operations, having spent most of his four decade railroad career in marketing and sales.

“Our biggest concern is that Mr. Foote’s primary area of expertise is sales and marketing versus operations, and the senior management team now lacks a member with an operating background,” Radbourne wrote.

“He is a competent, experienced railroader who is familiar with precision railroading,” said John Larkin, an analyst with Stifel Equity Research. “He has been in place for a couple of months and has a head start on any others. The company has underdone enough uncertainty over the past couple of years and needs some stability.”

What Harrison’s death means for CSX in the long term is being debated by railroad industry observers.

“Harrison’s legendary ability to redesign a rail network with his Precision Scheduled Railroading model created the two most efficient operations in North America and we believe his legacy will continue at CSX,” J.P. Morgan analyst Brian Ossenbeck wrote on Sunday.

But Renny Ponvert, CEO of Management CV Inc., which analyzes top hires for money managers, told The Wall Street Journal, that hiring Harrison “was a classic triumph of short-term thinking over long-term sustainability.”

Povert said the CSX board “took a high-beta risk that appeared to pay off for the first six months. Now, they’re stuck with a consequence that could expose long-term shareholders.”

Bloomberg columnist Brooke Sutherland summed up what happened in the lead to her story this way: “CSX Corp. shareholders paid $84 million for Hunter Harrison. They’re now getting James Foote.”

In January when word got out that Harrison and the Mantle Ridge hedge fund were targeting CSX, the company’s stock value jumped 23 percent in one day.

One news report said CSX stock value has risen 48 percent this year and about 6 percent since March when Harrison took over.

The stock value fell on Friday about 10 percent, but then stabilized. On Monday CSX stock value rose 1.25 percent to $53.42.

Investors will be looking to a January CSX announcement of its fourth quarter 2017 performance for clues as to what the company plans to do going forward.

CSX also plans to hold an investors conference next March. By then the board may have already named Foote the permanent CEO and hired a chief operating officer.

Before his death, Harrison had purged the top executive ranks of most CSX holdovers.

Most of that shakeup came in late October and also brought Foote to the company to oversee operations and marketing.

Harrison had also been bringing in former Canadian National managers who understand his precision scheduled railroading model.

During a series of “Hunter camps,” which were intensive seminars led by Harrison himself that explained the concepts of precision scheduled railroading, he had identified what he termed “rock stars” who showed promise of understanding the model and being able to implement it.

CSX has signaled that it intends to continue to operate on the PSR model but some analysts have been debating whether it has the management team it needs to continue to oversee it.

Foote contended last Friday before Harrison death that most of the work in implementing PSR has been done and CSX had the people in place to fine tune things.

Some believe Foote and the current CSX management team might be better suited than was Harrison to soothe relations with shippers and employees who were upset at the rapid pace of change that Harrison brought to CSX and which resulted in service issues during the summer and early fall.

Yet some continue to doubt that Foote is the long-term answer for CSX.

“Even though Jim Foote is a capable leader we do not see him as the long-term solution as the CEO given his strength is marketing and the company is embarking on an operations-focused turnaround,” Cowen and Co. analyst Jason Seidl said in a note.

There has also been speculation in the wake of Harrison’s death that some CSX shareholders might launch litigation against the CSX board for breach of duty for having hired a CEO they knew had health issues.

The board had initially demanded that Harrison submit his medical records for review by an independent physician.

Harrison refused and the board backed down after Harrison submitted a letter from his doctor saying he was fit for the job.

One news account quoted two unnamed corporate attorneys as saying it might be difficult to win such a lawsuit because of Harrison’s known medical condition.


Harrison’s CSX Legacy Gets an Incomplete

December 17, 2017

Shortly after I learned on Saturday afternoon about the death of CSX CEO E. Hunter Harrison, I logged into to get a sense of how railfans were reacting to the news.

As I expected, many, although not all, posters wrote harsh, bitter and even over the top comments along the lines of “good riddance.”

A poster who goes by the screen name Darkcloud wrote, in part, “While it might be sad for his family, he ruined a lot of lives of rail workers who didn’t have the safety net of wealth to fall back on that he and his family do. Good men with good records fired under false pretenses or minor errors. Fired to ‘send a message’ or to save a few more dollars to pay for [the] obscene salary he demanded when already a set for life multi-millionaire.”

The business press by contrast offered a more gentile and longer view of Harrison’s passing.

Typical of those accounts was one published at that described Harrison as a turnaround chief executive officer.

“By relying on a strategy of cutting costs and implementing procedures to make all parts of the operation more efficient, Harrison transformed Canadian Pacific Railway Ltd., Canadian National Railways Co. and Illinois Central Corp. into rail industry leaders. His reputation among analysts and investors was so strong that CSX shares jumped 23 percent on a single day in January 2017 when reports emerged that Harrison was in talks to take the helm,” Bloomberg reporter Frederic Tomesco wrote.

Can these disparate points of view be reconciled? Yes, if you keep in mind that how you view Ewing Hunter Harrison is shaped by the angle from which you view him.

History books are more likely to portray Harrison in the manner that Bloomberg did than with the emotionally wrought language often employed on chat lists.

And yet both speak to the same point. Harrison was a controversial but hard to ignore figure revered on Wall Street and respected by business writers and railroad trade journals, but often loathed by many who worked on his railroads.

There is no denying that Harrison will be remembered for his concept of precision scheduled railroading that he honed on the IC and then took to CN, CP and CSX.

There also is no denying that the tools that Harrison used to make his railroads more efficient included reducing payroll and demanding in no uncertain terms that workers and manager do things his way.

He lived by the credo of doing more with less; that meant fewer employees and assets, and pushing to get a little more out of both than his predecessors had done.

“Run a tight ship, and you can expect a reasonable return; manage it badly, and the sheer weight of assets will sink you,” Harrison wrote in his 2005 book How We Work and Why: Running a Precision Railroad

Harrison sought to frame himself as concerned with the welfare of his railroad’s employees and even hinted that he was pro labor. Yet at CP he ordered mid-level managers to learn how to operate trains in the event that the unions went on strike.

Likewise, Harrison sought to frame what he was doing at CSX as in the best interests of the railroad’s shippers even as many of those shippers flooded the U.S. Surface Transportation Board with complaints about shoddy service.

CSX acknowledged having service issues during the transition to the precision scheduled railroading model.

But Harrison was an old school manager who saw himself as being in the railroading business and not necessarily the transportation business, a viewpoint that was not unique to him.

He would never accept the premise of that statement, but even by his own words, Harrison acknowledged that CSX was trying to get shippers to change their behavior rather than the other way around.

A few weeks ago he dismissed shipper complaints as long-standing efforts by shipper trade groups to get the federal government to impose regulations on railroads.

This spoke to a paternalistic bent of “I know what is best for you” that no doubt irritated some CSX customers. What is best for shippers is not always what is best for CSX and vice versa.

Of late, Harrison and CSX executives had been touting the improvements that the railroad has made in such metrics as average train speed and dwell time of cars in classification yards.

Some of Harrison’s critics and even his admirers have wondered if precision scheduled railroading could work at CSX with its labyrinth route network and more complex mix of traffic than IC, CN or CP.

We’ll never fully know the answer to that question because Harrison won’t be around to see the process through. His CSX legacy is and always will be incomplete.

He led CSX for less than a year and although the surviving managers are likely to continue the precision scheduled railroading model, they won’t have Harrison around to lean on for guidance, leadership and inspiration.

Whatever successes or failures that CSX has in the coming months and years will be on those managers and not Harrison even if he established the direction that the railroad is going.

I’ve always believed that our society places too much emphasis on the efforts of individual presidents and chief executive officers.

We see them as larger than life figures and tend to attribute to them an organization’s good and bad behavior at all levels.

To be sure, the man or woman at the top sets a tone that percolates downward through the top managers that he or she hired and oversees. Some CEO’s do better at that than others.

Yet the focus on personality can overlook the context in which the top executive operates and might attribute to personality what is actually the work of culture and external forces and how an organization responds to those.

Yes, the personality, talent and skill of the CEO play a role in organizational behavior, but Class 1 railroads are complex organizations that engage in multiple juggling acts to seek to satisfy multiple masters.

Whether you thought Harrison did that well or not depends on your perspective as the commentary about his passing well illustrates. But critics and admirers both can agree that he was a towering figure in the railroad industry who stood over many of his peers and will be remembered for much longer than many of them because of his efforts to be a transformative leader.

Hunter Harrison Dies at Age 73

December 16, 2017

CSX CEO Ewing Hunter Harrison died on Saturday at age 73, just over a day after the railroad announced that he had taken a medical leave of absence.


In a news release, CSX said that Mr. Harrison died at his home in Wellington, Florida, of unexpected severe complications from a recent illness.

“With the passing of Hunter Harrison, CSX has suffered a major loss,” said CSX Chairman Edward J. Kelly III in a statement.

“Notwithstanding that loss, the Board is confident that Jim Foote, as acting chief executive officer, and the rest of the CSX team will capitalize on the changes that Hunter has made. The Board will continue to consider in a deliberative way how best to maximize CSX’s performance over the long term.”

Mr. Harrison’s death came a day after the news of his medical leave resulted in CSX stock losing $4 billion in market value. Last Wednesday the stock had reached a record price of nearly $60 a share.

James M. Foote, who came to CSX in late October to oversee marketing and operations, had been named acting CEO after Mr. Harrison went on medical leave.

Many Questions, Few Answers From CSX

December 16, 2017

Now the questions begin and thus far there have been few answers, but much speculation.

E. Hunter Harrison

Acting CSX CEO James M. Foote spoke to investors, analysts and journalists early Friday morning, but said little about why his boss, E. Hunter Harrison, had to step away on what the railroad described as a medical leave of absence.

Nor would Foote say when Harrison would be back to work or even if he plans to maintain regular contact with him during the interim. “We just can’t talk about it, simple as that,” Foote said.

The news sent CSX stock prices plummeting on Friday. After hitting a high of $57.59 per share on Dec. 13, CSX stock opened on Friday at $51,90 per share, but rallied to close at $52.93.

Foote did say that Harrison became ill last week after one of his regular multi-day sessions known as Hunter Camps in which he lectures managers about the principles of precision scheduled railroading. That illness “led to medical complications,” Foote said.

It had been reported earlier this year that Harrison has a medical condition that forces him to use an oxygen tank and often work from his home in Wellington, Florida.

Railway Age has reported that Harrison has been suffering from emphysema.

When hedge fund Mantle Ridge was pressuring the CSX board of directors last spring to replace CEO Michael Ward with Harrison, the board wanted a panel of independent physicians to review Harrison’s medical records.

But Harrison balked at that and CSX dropped the demand.

From the viewpoint of investors, they want to know the degree to which CSX has a CEO succession plan in place and whether Harrison’s absence will adversely affect the efforts to build the new top-level management team.

Back in late October, Harrison oversaw a management shakeup that sent three high-ranking executives out the door.

Harrison said on Nov. 29 that he was “trying to stay back a little bit” to allow Foote and other executives some room to steer the company. At the time, Harrison said it was part of his succession plan.

Above all, investors and others are wondering how Harrison’s absence might affect CSX long term.

“Hunter Harrison is a unique talent and leader and if he is unable to return to the company it would raise real questions over CSX’s long-term margin potential,” Citi analyst Christian Wetherbee wrote in a note to investors.

Although Foote worked with Harrison for 11 year at Canadian National, he has never been the head of a railroad.

When Foote was brought in to be executive vice-president and chief operating officer, Harrison said it was because of his knowledge of precision scheduled railroading, the operating model that Harrison has implemented at three other railroads that he headed including the Illinois Central, CN and Canadian Pacific.

Foote has 40 years experience in the railroad industry, but much of it has been in sales and marketing. He has limited railroad operating experience.

Although Foote was given responsibility for operations as well as sales and marketing at CSX, he said earlier he was spending 70 percent of his time on the sales and marketing side.

Now he will need to divide his time more evenly between operations and sales.

“There’s only one genius in the room at all times that knows the railroad business like nobody else does. We all know that, we all appreciate his vision,” Foote said last month.

During the early Friday conference call, Foote sidestepped questions about whether the CSX board had been slow in warning that Harrison has health problems.

“The board acted properly and promptly based on the information that we had,” Foote said. “As I said, it was a short period of time ago when he was not only actively involved publicly with the financial community but actively involved holding these mentoring meetings with employees, which was really just only days ago.”

No CSX board members participated in the Friday conference call. Five of the current board members also are new at CSX, having been suggested by Mantle Ridge.

Foote said CSX has already done most of the “real heavy lifting” associated with implanting precision scheduled railroading, including closing or curtaining operations at numerous classification yards.

CSX has also imposed several cost cutting measures, laid off employees and experienced service disruptions that left some shippers disgruntled.

Service problems that peaked during the summer and continued into the fall, led the U.S. Surface Transportation Board to conduct a public hearing on CSX service in October.

“I believe that the battleship has turned, the precision scheduled railroading framework has been put into place, and the company has amassed the critical talent – through education of the internal team and supplementation with a complement of strong PSR operating veterans and a strongly supportive board – sufficient to follow through and execute on the PSR operating plan,” Foote said on Friday morning.

He said the management team in place has implemented a foundation consistent with Harrison’s vision.

“I do not see any reason to diminish our expectations concerning the pace and magnitude of our future progress,” Foote said.

Some analysts have expressed doubt about whether Harrison intended for Foote to become his successor. They believe that Harrison meant for Foote to be the No. 2 executive at CSX.

Whatever reservations that the CSX board had about hiring a CEO they knew had health issues were swept away when CSX stock value skyrocketed even after reports surfaced that he might take over the railroad.

CSX stock was trading for $35.89 per share back on Jan. 3. It zoomed to $44.33 per share on Jan. 19 after word got out that Harrison would leave CP early and set his sights on become CEO at CSX.

The stock has had its periodic ups and down since then, but has consistently traded between $45 and $55 per share for most of the year.

By comparison, since 2013, CSX stock has traded from a low of around $20 a share to a high of $37.56 in November 2014.

Cowen and Co. Managing Director Jason Seidl told Railway Age on Friday that in the wake of Harrison’s medical leave uncertainty will remain surrounding CSX for several months.

“ . . . we think there will be a prolonged period of heightened uncertainty around the stock. The company’s near- and long-term outlooks are unclear, in our view. We are unsure if Harrison will return to run the company.”

Seidl described Foote as a capable leader, [but] “we do not view this as a long-term solution for the company and expect the [CSX] board to start looking inside and outside the organization for a long-term successor to Harrison.

“Perhaps the biggest question that remains to be answered is what Mantle Ridge, the Paul Hilal-led hedge fund that installed Harrison as CEO, is going to do, now that Harrison is, for all intents and purposes, out of commission, possibly permanently,” Seidle said.

CSX has plans to conduct an investors conference in March that had originally been scheduled to be held last October.

Analysts will be looking toward that conference for information about CSX’s longer-term operating plans.

In the meantime, Seidl expects CSX to announce another round of employee layoffs in early 2018. He also expects the railroad to begin announcing divestitures about the same time.

Seidl pointed out to Railway Age that Harrison has swept aside most of the key CSX managers who had run the company before his arrival last March.

“Who is the replacement senior management team at CSX now, after Harrison let so many senior people go? Are there people who will know how to run things when the winter hits?” he said.

Baird Equity Research analyst Benjamin Hartford in a report issued Thursday said that Harrison’s influence at CSX “is immense,” and his absence likely will be a concern to stockholders.

“We expect that the announcement of his leave pressures the stock,” he wrote. “Harrison’s health has been an ongoing concern among investors since his hiring. His implementation of his PSR model has been the fundamental catalyst to CSX this year.”

In speaking early Friday morning, Foote acknowledged that CSX still has much work to do in implementing precision scheduled railroading.

He said the carrier continues to seek ways to turn cars and locomotives faster, tweak train and network performance, and improve service as a way to grow the business.

Trains magazine on Friday quoted John Larkin, an analyst with Stifel Equity Research, as saying that although the operational changes at CSX are largely complete, the corporate culture is not yet where Harrison expects it to be.

“Jim Foote should be able to continue on the redirected trajectory and finish up the cultural transition,” Larkin said. “His expertise is marketing, which is Hunter’s weakness. So maybe this transition is functionally appropriate, albeit on a bit of a more rushed schedule than originally planned.”

Anthony Hatch of ABH Consulting told Trains that CSX probably has gone far enough in implementing the precision scheduled railroading model.

However, Hatch said CSX lacks “a true, experienced” chief operating officer.

He noted that Canadian National thrived after Harrison left there in 2009 and Canadian Pacific, which Harrison left in January, has been doing well. Perhaps the same will hold true for CSX.

Harrison on Medical Leave From CSX

December 15, 2017

CSX announced Thursday night that CEO E. Hunter Harrison has taken a medical leave of absence and Chief Operating Officer James Foote is serving as acting CEO.

E. Hunter Harrison

The announcement said Harrison is dealing with complications from a recent illness.

A conference call was to be held on Friday morning to discuss the situation.

Harrison has been thought to have health issues for some time. It was reported earlier this year that he sometimes uses supplemental oxygen and that due to an undisclosed illness he has curtailed his traveling.

Concerns about Harrison’s health had been an issue early this year after hedge fund Mantle Ridge acquired a block of CSX stock and pushed for the company to make him CEO.

The CSX board of directors had demanded that Harrison’s medical records be examined by independent physicians, but he declined and the demand was later dropped.

Foote worked with Harrison years ago at Canadian National and was brought to CSX this past October with the idea of eventually succeeding Harrison as CEO of CSX.

“Hunter is a good friend and has been a colleague of mine for many years. He is an icon in the industry and we pray for his speedy recovery,” Foote said in a statement. “I have been following the CSX story very closely since January, but did not realize just how much progress Hunter and CSX’s able team have made replicating the transformation we effected at Canadian National some years ago.”

Harrison agreed to a four-year contract when he agreed to become CEO of CSX.

In his statement, Foote said that the precision scheduled railroading operating model is well in place at CSX and “the company has amassed the critical talent – through education of the internal team and supplementation with a complement of strong PSR operating veterans and a strongly supportive Board – sufficient to follow through and execute on the PSR operating plan.”

Harrison, Foote to Appear at Florida Conference

November 28, 2017

The two highest ranking executives at CSX plan to conduct what is being termed a “fireside chat” on Wednesday at a conference in Florida.

CEO E. Hunter Harrison and Chief Operating Officer James Foote will appear in Palm Beach at the fifth annual Credit Suisse Industrials Conference.

Credit Suisse analyst Allison Landry is expected to ask questions of the two executives who worked together at Canadian National a decade ago.

In the meantime, the service issues that plagued CSX last summer are still occurring some shippers say.

Trucking company J.B. Hunt has warned of delays of up to 72 hours in Jacksonville, Florida.; Atlanta, Savannah, Georgia.; Charlotte, North Carolina; Memphis, Tennessee; and Louisville, Kentucky. Delays of up to 48 hours may occur in Chicago and central Florida.

“Regrettably, the numerous changes, combined with peak season volumes, have resulted in an extended degradation of service since the slight improvement observed post-Hurricane Irma,” J.B. Hunt said in a Nov. 21 service advisory. “Shipments continue to be delayed throughout the CSX network.”

Toyota Canada said the positive comments it made last month to the U.S. Surface Transportation about CSX service are no longer reflective of the quality of service the automaker has been receiving of late.

After New York lawmakers stepped in, CSX reversed a plan to curtail service to a General Mills facility in Buffalo, New York, that makes Cheerios.

CSX had planned to reduce switching at the plant from twice a day to once a day.

Railroad spokesman Rob Doolittle sought to give the reversal a positive spin by saying it shows that CSX continues to respond to individual customer issues when they emerge.

CSX Shareholders Favor Giving Harrison More $$$

June 6, 2017

As expected, most CSX shareholders have voted to give CEO E. Hunter Harrison the money that he wants.

E. Hunter Harrison

In an advisory vote, 93 percent of the shareholders favored giving Harrison and hedge fund Mantle Ridge $84 million to reimburse them for salary and benefits that Harrison forfeited by leaving early as the CEO of Canadian Pacific last January.

The vote was made public on Monday at the CSX annual meeting in Richmond, Virginia.

Harrison had threatened to resign if shareholders rejected the reimbursement request.

Many analysts had expected the shareholders to agree to giving Harrison the money because CSX stock has risen by 40 percent in value since it became known that Harrison was seeking to become the railroad’s head.

Harrison took over the CEO post last March. Paying Harrison and Mantle Ridge will cost about 12 cents per share.

CSX also said that 13 candidates for its board of directors have been elected, with each member receiving the backing of at least 96 percent of shareholders.

They include Harrison, Mantle Ridge founder Paul Hilal, Donna M. Alvarado, Sen. John B. Breaux, Pamela L. Carter, Steven T. Halverson, Edward J. Kelly III, John D. McPherson, David M. Moffett, Dennis H. Reilley, Linda H. Riefler, J. Steven Whisler, and John J. Zillmer.

CSX Converts Cumberland Hump to Flat Switching

May 22, 2017

As expected, CSX last week converted its hump yard in Cumberland, Maryland, to flat switching.

It is the fifth such yard to have its hump closed since E. Hunter Harrison became CEO in March and implemented his precision scheduled railroading operating philosophy.

Among other things, that approach looks with disfavor upon hump yards in the belief that they add cost and transit time to freight movements.

Other hump yards that have been converted to flat switching are located in Toledo, Ohio; Louisville, Kentucky.; Hamlet, North Carolina; and Atlanta.

A memo sent to CSX employees last week indicated that the hump at Selkirk, New York, will also be closed in favor of flat switching.

The remaining CSX hump yards are in Waycross, Georgia; Birmingham, Alabama; Nashville, Tennessee; Cincinnati; Avon, Indiana (Indianapolis); and Willard, Ohio.

CSX managers have indicated that those yards are being evaluated and that the railroad expects it could have between two to four hump yards left in its system once that review is completed later this year.

Trains magazine reported that when CSX closes a hump, it does the flat switching on the receiving and departure tracks. The classification bowl tracks stand empty.

The railroad said track and switches from the classification bowls will in time be used elsewhere.

Harrison Has Medical Condition That Often Has Him Working From Home, Not CSX Headquarters

May 19, 2017

The Wall Street Journal reported this week that CSX CEO E. Hunter Harrison has a medical condition that often forces him to work at home.

E. Hunter Harrison

The newspaper gave few specific details about the condition and the 72-year-old executive said that he should not be judged by his medical record.

“I’m having a ball and I’m running on so much adrenaline that no one can stop me,” Harrison told the Journal. “Don’t judge me by my medical record, judge me by my performance.”

Harrison acknowledged that he carries a portable oxygen system, but his doctors cleared him for his position.

“There are times when I get a little shortness of breath so I take oxygen and it helps,”
Harrison said.” Sometimes I get a cough and the oxygen makes it go away.”

CSX Chief Financial Officer Frank Lonegro told an investor conference that Harrison is fully engaged in his job.

“We’re really running to play catch up with him,” Lonegro says. “He’s a 24-hour-a-day, seven-day-a-week kind of guy.”

Trains reported that CSX was well aware of Harrison’s medical condition when it hired him.

However, that was a point of contention at one point when CSX demanded that independent physicians review Harrison’s medical records, a request that Harrison refused.

CSX said it would not comment on Harrison’s health.

The Journal said that during his last two years at Canadian Pacific, Harrison frequently worked from home rather than in his CP office in Calgary.

2 More CSX Humps Set to Close

May 16, 2017

Add Selkirk and Cumberland to the list of humps that CSX plans to close.

An online report said the Cumberland hump will close on May 16. Five of the bowl tracks will be kept, but the other tracks will be out of service or used for storage.

The changes will mean that only Q372, Q398 and Q401 will originate in Cumberland. Terminating in Cumberland will be Q236, Q352 and Q400.

Other trains will make pickups or setoffs, including Q236, Q353, Q375, Q389 and Q416. Some trains will merely change crews in Cumberland.

The Times Union of Albany, New York, reported that members of the Brotherhood of Locomotive Engineers and Trainmen received a memo about the hump closing at Selkirk, New York.

The memo said that CSX management believes the yard costs too much to operate and some of its work will be shifted to other yards, including Syracuse, New York.

The news report did not indicate how many employees would lose their jobs but Mark Krajewski, chairman of the union local, called the move “heartbreaking.”

CSX has been closing humps at yards in the wake of E. Hunter Harrison taking over as the railroad’s CEO and implementing his precision scheduled railroad operating philosophy.

The railroad earlier said it would close humps in Atlanta; Louisville, Kentucky; and Toledo, Ohio. CSX officials have yet to confirm the closure of the Selkirk hump.

The Times-Union said Selkirk yard was the largest in the New York Central system.

Harrison views hump yards as inefficient and closed at least four of them during his time as CEO of Canadian Pacific.