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CP turnaround can be dramatic, Harrison vows

Railway veteran Hunter Harrison said he expects to achieve "just as dramatic a turnaround" at Canadian Pacific Railway Ltd. as he did at his former employer Canadian National Railway.

Mr. Harrison's remarks were made in a Pershing Square Capital Management statement issued Tuesday that outlined its proposed alternative slate of directors at Canadian Pacific. Mr. Ackman is pushing for new directors to support his proposal to replace CP's CEO Fred Green with Mr. Harrison, 67, who retired from CN two years ago.

"I've been a railroader since I was 19 years old. I love the industry, the people in it, its culture and the role we play in connecting customers and communities. I'm proud of the work we did at CN, and the positive impact that improving its performance had on shareholders, employees, customers and Canada. . . .I believe Canadian Pacific can achieve just as dramatic a turnaround and enjoy its rightful position as a leader in the North American rail industry. Together, we can transform CP into the railroad its customers, employees and shareholders deserve. I would be proud to help lead CP to that victory."

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Mr. Harrison's remarks come a day after CN took the unusual step of suspending Mr. Harrison's lucrative retirement benefits after it filed a legal claim in Chicago claiming that its former CEO had breached a non-compete agreement by teaming up with Pershing Square to campaign for the top job at CP. Underlining the historic and often bitter rivalry between Canada's two national railways, CN said in is law suit that Mr. Harrison's move to CP would be "devastating."

Matching one extraordinary move with another, Pershing Square founder Bill Ackman said Monday that he has agreed to guarantee or indemnify Mr. Harrison's retirement benefits. He dismissed CN's legal action as "frivolous."

Pershing Square is asking shareholders to replace five of CP's 15 directors with its proposed slate of Canadian and U.S. business leaders. The candidates are Mr. Ackman, his partner Paul Hilal, former Onex managing director Tony Melman, former KPMG Canada partner and restructuring expert Gary Colter and Just Energy Group Inc. founder Rebecca MacDonald.

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