Claude Mongeau, Canadian National Railway Company chief executive - Date/Photographer unknown.

29 June 2012

CN Intends to Continue Pursuing Legal Action Against Harrison

Montreal Quebec - Pershing Square Capital Management L.P. got its man to lead Canadian Pacific. Today, the Class I announced it appointed E. Hunter Harrison president and chief executive officer. He also will serve on CP's board.
 
Pershing Square acquired a major stake in CP late last year and led a proxy battle that culminated in the resignations of former President and CEO Fred Green and Chairman John Cleghorn, and the installation of seven Pershing Square nominees on the railroad's board. Earlier this year, Pershing Square officials tabbed Harrison as their top choice to be CP's next CEO.
 
Harrison formerly was president and CEO of CN from January 2003 to December 2009, and CN's chief operating officer from 1998 until 2003. Prior to that, he was president and CEO of Illinois Central Railroad (IC) from 1993 to 1998, and the railroad's COO from 1989 to 1993. In addition, his roles at IC included stints as senior vice president of transportation and SVP of operations.
 
During his 46-year railroading career, which began as a carman-oiler for the St. Louis-San Francisco Railroad, Harrison also was vice president of transportation and VP of service design for the Burlington Northern Railroad.
 
Harrison is considered the architect of "scheduled" and "precision" railroading, operating strategies he honed at IC and CN. He was the recipient of Progressive Railroading's "Railroad Innovator Award" in 2009.
 
Harrison was chosen "following a thorough CEO selection process," said CP Chairman Paul Haggis in a prepared statement. Stephen Tobias, the former Norfolk Southern Corp. vice chairman and chief operating officer who joined CP's board in May, had been serving as interim CEO.
 
"The board welcomes Mr. Harrison's experience and leadership to CP," said Haggis. "We look forward to benefiting from his strong track record of service reliability, efficient asset utilization, and strategic capital expenditure."
 
CN congratulates Harrison on his appointment and looks forward to "fair and vigorous competition with CP under his leadership," said CN officials in a prepared statement. However, a legal proceeding against Harrison pertaining to such an appointment is ongoing, and CN reserves the right to exercise "any and all legal options available to it in connection with this action," they said.
 
"Earlier this year, CN's board cancelled Mr. Harrison's future pension payments and as yet unpaid restricted stock units and other benefits," CN officials said. "CN's court proceeding in the state of Illinois seeks a declaration confirming its legal right to cancel such payments and benefits. It also seeks to enforce Mr. Harrison's covenants that he will not solicit CN personnel for a certain period of time and that he will not disclose confidential CN information at any time."
 
CN doesn't plan to bar Harrison's appointment, but it likely will be difficult, if not impossible, for him to perform his new duties for CP without drawing upon his broad knowledge of CN's confidential information, "which he is not permitted to do," they said.
 
"So, CN intends to monitor events, and if it appears that Mr. Harrison is using confidential CN information, [we] might seek injunctive relief at that time," CN officials said.
 
Author unknown.

      This web site was assembled on Vancouver Island in British Columbia Canada.