The most shocking thing about Hunter Harrison’s turnaround plan for Canadian Pacific Railway, unveiled this week, is how sensible it all sounds, given the nasty proxy fight that preceded it.
The headline item is Mr. Harrison’s planned 4,500 job cuts, but this is no slash-and-burn exercise. Rather, the former Canadian National Railway CEO hand-picked by activist investor Bill Ackman has taken a hard look at CP’s network, assets, how it gets from point A to point B, how it spends money, makes money and rewards employees – and given the whole thing a shake. He’s getting rid of unnecessary switching yards and terminals, and unneeded locomotives and rail cars, rail lines and real estate. His goal is to get trains to run longer and heavier, but also faster and more productively, including shaving one day off the five-day journey from Vancouver to Chicago.