CSX stock price recovers after management shake-up

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JACKSONVILLE, Fla. — CSX investors seem to have recovered from shocking news after an unexpected management shake-up Tuesday saw the railroad's chief of operations move to take the top spot at an airline.

As of 11:23 a.m. Eastern time Wednesday, shares of CSX Corp., parent of CSX Transportation, were up $0.20 to $28.20 from the market closing price on Tuesday. Shares in the company briefly dipped to $27 late Tuesday as news of the shake-up spread through the markets.

CSX Corp. announced on Tuesday that Oscar Munoz, president and chief operating officer, resigned to become president and chief executive officer of United Continental Holdings Group, the holding company which owns United Airlines. CSX chairman and chief executive officer Michael Ward announced a series of senior management changes after Munoz resigned.

Munoz joined CSX Transportation in May 2003 as chief financial officer, executive vice president, and chief operating officer. He also became chief financial officer for CSX Corp. in May 2003.  In January 2012, Munoz became executive vice president and chief operating officer, and in February 2015, was named president and chief operating officer. Prior to joining CSX, Munoz held financial leadership positions at AT&T, Coca-Cola Enterprises, the Coca-Cola Company, and U.S. West Communications.

At age 56, Munoz’s departure from CSX came as a surprise to many, especially considering that he was widely thought to be CSX’s choice to become the chief executive at some point in the future. However, he had served as a director of Continental Airlines since 2004, and became a director of United Airlines after the merger of United and Continental in 2010. Moreover, Munoz’s move to United comes immediately after the resignation of former United CEO Jeff Smisek and two senior executives due to a federal investigation into allegations that the airline traded favors with the chairman of the Port Authority of New York and New Jersey.

The management changes associated with Munoz’s departure include the promotion of Clarence Gooden from executive vice president and chief sales and marketing officer to president, who will now oversee operations as well as sales and marketing. Gooden began his railroad career in 1970 with a CSX predecessor railroad, and has served as a leader in the sales, marketing and operations organizations at CSX. In April 2009, CSX fined Gooden for overstating his academic credentials on his corporate biography. Gooden listed that he had a B.A degree from the University of Georgia but, although the university confirmed that he attended from 1970-1973, it said Gooden was not awarded a degree.

Cindy Sanborn, formerly executive vice president – operations, has been appointed executive vice president and chief operating officer. Sanborn joined CSX in 1987, and has served in a variety of operating positions during her career at CSX, including superintendent of the Detroit and Baltimore divisions of the railroad, vice president and chief transportation officer. Sanborn is the daughter of former Conrail president Richard D. Sanborn, who died of a heart attack at age 52, just six weeks after assuming the presidency of the railroad. The elder Sanborn also served in senior executive positions at Seaboard Coast Line Industries and CSX.

As NewsWire reported yesterday, Fredrik J. Eliasson has been appointed executive vice president and chief sales and marketing officer, and Frank A. Lonegro was named executive vice president and chief financial officer.

NEWSWIRETrains News Wire

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