CSX CEO Harrison dies months into railroad’s turnaround effort

NEW YORK (Reuters) – CSX Corp (CSX.O) Chief Executive Hunter Harrison has died, the freight railway operator said on Saturday, just a few days after announcing that the veteran rail executive hired earlier this year to boost its profits had taken a medical leave of absence.

Harrison, 73, died “due to unexpectedly severe complications from a recent illness,” the company said in a statement, adding that he would be succeeded for now by acting CEO Jim Foote.

“We are immensely grateful for the opportunity to have worked with the railroad legend,” Foote said in a letter to employees of CSX, which has some 21,000 miles of track, mostly east of the Mississippi River, adding that it would “honor his legacy by staying focused” on his business plan.

Harrison, hired as CEO in March at the urging of activist investor Paul Hilal, had been in the midst of an ambitious and sometimes controversial effort to overhaul CSX by laying off employees and streamlining operations.

Seen using an oxygen tank when meeting with investors last month, he had been hired at CSX on a four-year contract with an estimated value of $300 million.

“The board will continue to consider in a deliberative way how best to maximize CSX’s performance over the long term,” CSX Chairman Edward Kelly said in a statement that called Harrison a “larger-than-life figure.”

News of Harrison’s leave, announced late on Thursday, sent the No. 3 U.S. railway’s shares tumbling as much as 10 percent in Friday trading on the Nasdaq. Despite that, the stock is up 47 percent so far this year.

Harrison, who led turnarounds of two Canadian railroads, had previously taken a medical leave at Canadian Pacific in 2015 after surgery and a bout with pneumonia.

While the turnaround plan went over well with shareholders, its execution triggered service disruptions and ran afoul of regulators and customers.

The company, which on Friday brushed off questions about whether the board has been slow to disclose Harrison’s health problems, provided no further details about his cause of death.

Foote, who also holds the titles of chief operating officer and chief sales and marketing officer, had worked with Harrison at Canadian National Railway (CNR.TO), but has never headed a major railroad.

He has said he would follow through with the wide-ranging overhaul now under way, but some investors on Friday expressed doubts about whether he could deliver on Harrison’s ambitious plan, which included closing numerous railyards where train cars are sorted and the potential sale of some short-line rail segments.

Additional reporting by Eric Johnson,; Editing by G Crosse and Alistair Bell

Our Standards:The Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.