Hunter Harrison, 67, says it would be reasonable for him to run Canadian Pacific for three to five years - Date unknown Greg Southam.

12 January 2012

Harrison Commits Himself to CP for the Long Haul

Wellington Florida USA - Hunter Harrison, William Ackman's choice to lead Canadian Pacific Railway Ltd., said he would be willing to stay in the job for as long as it takes to turn around North America's least efficient railway.
 
Harrison more than tripled net income in seven years running Canadian National Railway, using an approach known as precision railroading, before retiring in 2009.
 
Now, hiring the 67-year-old as Canadian Pacific's chief executive is at the centre of a turnaround plan by Ackman, whose 14.2 percent stake makes him the company's largest investor.
 
"If the opportunity presents itself I am ready to be in there for the long term," Harrison said by phone from his home in Wellington, Florida.
 
A tenure of three to five years "is reasonable," Harrison said. "Could it be seven and could it be four? Yeah.
 
"My commitment would be that I would be there as long as I'm needed to turn the organization in the right direction and build some sustainability. This is not some kind of one-time shot to go in there, do something overnight, and then get out."
 
Ackman, the founder of New York-based Pershing Square Capital Management LP, invests in companies he deems undervalued and seeks changes to improve shareholder returns. He disclosed his stake in Canadian Pacific in late October and has since sought to oust CEO Fred Green.
 
CP chairman John Cleghorn re-buffed Ackman's push to replace Green with Harrison in a letter released Monday. Ackman told Bloomberg that day he would seek a proxy fight and that Harrison would be CEO "once we are successful".
 
Ackman told the Wall Street Journal earlier this week he will hold a meeting for shareholders next month.
 
Harrison said he's looking forward to the challenge of turning around Calgary-based CP if Ackman succeeds in his bid.
 
"I tried other things, and I missed the work," Harrison said. "This was an opportunity that came along and was unforeseen. It's where my focus is, and only there. Clearly I have made some commitments to Mr. Ackman, and I intend to live up to my commitments."
 
Harrison declined to say how long it might take for Canada's No. 2 railway to boost earnings, pointing to his tenure at CN and Illinois Central. Montreal-based CN, Canada's largest railway, bought Illinois Central in 1998. When Harrison retired from CN, the operating ratio, a measure of efficiency, had been cut to 67.3 from 76 at the end of 2002, filings show. CP's ratio was 75.8 in 2011's third quarter, and 77.6 for all of 2010, according to Bloomberg Industries data.
 
"If you look at IC in the past, and CN in the past, and you look at the time frames in the improvement, it should start to give some indication" of how long Canadian Pacific might need", Harrison said.
 
Frederic Tomesco.