Put another way, the railroad spent the last quarter century cutting employees. And we have to learn this lesson every time an economic recovery shows staying power: railroads melt down, stores encounter spot shortages of stuff, customer service sucks.Now, it's operations guru Hunter Harrison who has gone a dissatisfied shipper too far.
Since septuagenarian railroad legend Hunter Harrison became chief executive of [Canadian Pacific] in 2012, Wall Street has cheered the company’s cost cuts as a success story.That is, Mr Harrison has been attempting to acquire Norfolk Southern, which is able to delay freight without any coaching from Montreal, and lately he's been after CSX.
But ADM’s lawsuit claims service disruptions at its facilities in Enderlin and Velva, North Dakota, plus Red Wing, Minnesota are partly the result of CP “engaging in imprudent cost-cutting initiatives.”
ADM also blamed the problems on CP’s “engaging in ancillary and diversionary management activities during the period pertaining to potential rail merger/acquisition partners.”
Perhaps the prospect of being sued by a dissatisfied shipper generalizes to other businesses. Now we await the emergence of the person of integrity, whether in the boardroom or on the trading floor, who will ask about the effects of such lawsuits on shareholder value, and in that way shifting the focus away from the next quarterly earnings report.