Hunter: more congestion means more to fix

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Hunter Harrison
AP
Canadian Pacific CEO E. Hunter Harrison says he will email Norfolk Southern CEO James Squires today to ask him to agree to additional talks about merging the railroads.

The two have met only once to discuss the CP’s proposed $28 billion acquisition of NS. Speaking at an investor conference on Thursday, Harrison says he's frustrated with a lack of dialogue between the two companies.

In his appearance this morning on Bloomberg television, Harrison says he would contact NS today and once again pitch the merger as a pro-competitive deal that would be good for CP, NS, and shippers.
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In response to questions on Bloomberg, Harrison says that:
  • William Ackman, the activist hedge fund manager who is CP’s largest shareholder, was not a driving force behind the merger proposal. 
  • Although CP has reduced its workforce by nearly a third since Harrison became CEO in 2012, most of those cuts were through attrition and he expects the same process would be followed at NS.
  • The 71-year-old CEO, whose contract runs through 2017, would stick around to see the merger completed, no matter how long the regulatory review process may take.
Harrison was also asked if his team could make NS, with its complicated Eastern route structure, run as efficiently as CP’s simpler network.

“The more congestion and problems there are, the more opportunities there are to fix,” Harrison says.

Skeptics have suggested that Harrison’s lean operating system, devised when he was running Illinois Central, would not work at the larger Canadian National or at Canadian Pacific. Now they’re suggesting it would be tougher to do at NS.

“When are they going to be right? They haven’t been right yet,” Harrison says, noting his success at both CN and CP.

Norfolk Southern spokesman Frank Brown said the railroad would have no comment on Harrison’s remarks.

Bloomberg posted a portion of Harrison's interview online.

UPDATE: Nov. 20, 2015, 11:07 a.m., Central time. Norfolk Southern responds, but declines to comment.
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