CN railroad faces investor pressure after losing rail deal
Business
CN railroad faces investor pressure after losing rail deal
By Josh Funk | AP
Today at 5:31 p.m. EDT
OMAHA, Neb. After walking away from its effort to buy Kansas City Southern railroad earlier this month, Canadian National Railway Co. continues to face investor pressure to make changes in its operation.
The London-based investment firm TCI Fund which owns about 5% of CNs stock is pressing CN to overhaul its board, get a new CEO and improve its own operations. TCI has said that the new strategic plan CN announced after breaking off merger talks isnt enough to address its concerns about the railroad, so it is still pressing for a special meeting to elect four new directors who would help pick a new CEO.
CN is not realizing its full potential because of poor management and a lack of oversight from directors who are experienced in railway operations, TCI said in a document outlining their concerns that it filed with regulators this week. History has shown that with the right leadership and a knowledgeable board that holds management accountable the performance of a railroad can be improved quickly.
For its part, Canadian National announced plans earlier this month to reinstate share repurchases and commit to $5 billion in buybacks next year. The railroad also said it will also cut about $550 million in costs, including eliminating more than 1,000 jobs with the majority of those coming from the management side of the railroad, and boost revenue by $150 million largely through price increases.
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