Eastern Railroad Discussion > John Fishwick Takes on Railroad Mogul in “CSX Train Robbery”

John P. Fishwick, Jr., grew up in a railroading family. His father, after whom he was named, was president of the Norfolk & Western Railway before it merged with the Southern Railway to become Norfolk Southern. The younger Fishwick established a law career in Roanoke, working as U.S. Attorney for the Western District of Virginia in the Obama administration and then starting his own law firm.

But he never lost his fascination with railroads. He has taken up a new cause, blocking the out-sized compensation package of Hunter Harrison, a 72-year-old executive hired by CSX Corp. As a CSX shareholder, Fishwick objects to the company reimbursing Harrison $84 million in compensation he forfeited by leaving Canadian Pacific.

Full article: http://baconsrebellion.com/john-fishwick-csx-train-robbery/



Edited 1 time(s). Last edit at 04/19/17 19:03 by Appalachianrails.

Fishwick might as well sell his CSX stock cause he will get the 84mill.

Which is pretty damn stupid on CSX's part. Why even hire EHH anyway? He is pretty much a cancer/toxic power hungry, money grabbing corporate raider.

Michael Fair
Royal Oak, MI

bath_wildcat Wrote:
-------------------------------------------------------
> Which is pretty damn stupid on CSX's part. Why
> even hire EHH anyway? He is pretty much a
> cancer/toxic power hungry, money grabbing
> corporate raider.

$$$

bath_wildcat Wrote:
-------------------------------------------------------
> Which is pretty damn stupid on CSX's part. Why
> even hire EHH anyway? He is pretty much a
> cancer/toxic power hungry, money grabbing
> corporate raider.

In some circles (like venture capital) those personality traits are considered a feature, not a glitch.  You don't hire Mr Rogers to do corporate shakeups.

Don't get me wrong, I thnk this is bad for the public, the employees, and for the RR itself over the long term.  But the venture/vulture capital folks don't give a damn about what CSX looks like in 10 years, or even 5.  They will have absconded with the loot long before then.

I find it interesting that EHH talks about "precision railroading". N&W's slogan back in the late steam days if I recall was "precision transportation".

If they can reach this target, the money will have been well spent.


http://www.cnbc.com/2017/04/20/csx-surge-after-new-ceo-says-profits-will-increase-by-25-percent.html

march_hare Wrote:
-------------------------------------------------------
>
> Don't get me wrong, I think this is bad for the
> public, the employees, and for the RR itself over
> the long term.  But the venture/vulture capital
> folks don't give a damn about what CSX looks like
> in 10 years, or even 5.  They will have absconded
> with the loot long before then.

Precisely. Not to mention EHH walking away with his own pile of coin of the realm.

Mr. Fishwick's father was a tough, demanding and very successful railroader who could have bested EHH any day of the week and five times on Sunday. Kudos to the son for his efforts. I think he's doing his father proud indeed.

MC
Muskegon, Michigan



Edited 1 time(s). Last edit at 04/20/17 20:27 by ironmtn.

ironmtn Wrote:
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> Mr. Fishwick's father was a tough, demanding and
> very successful railroader who could have bested
> EHH any day of the week and five times on Sunday.
> Kudos to the son for his efforts. I think he's
> doing his father proud indeed.
>
> MC
> Muskegon, Michigan

Fishwick senior was tight and probably saved N&W from bankruptcy. However he was a lawyer, not an operating man. The Operating Department got a lot of bull-crap past Fishwick.

If the CSX share value goes up 25%, EHH will be a bargain. He and Mantle are locked in for five years, I believe.

Posted from Android

ts1457 Wrote:
-------------------------------------------------------
> ironmtn Wrote:
> --------------------------------------------------
> -----
>
> > Mr. Fishwick's father was a tough, demanding and
> > very successful railroader who could have bested
> > EHH any day of the week and five times on Sunday.
> > Kudos to the son for his efforts. I think he's
> > doing his father proud indeed.
> >
> > MC
> > Muskegon, Michigan
>
> Fishwick senior was tight and probably saved N&W
> from bankruptcy. However he was a lawyer, not an
> operating man. The Operating Department got a lot
> of bull-crap past Fishwick.

Interesting to hear you say that. I've heard it differently through the years: that though he was an attorney, he was also a competent operations guy. But I'm an outsider and dependent on what I read and hear secondarily from people I know in the industry, so I might be wrong. It's interesting that some other noted railroaders were also attorneys, such as both Graham and Robert Claytor. Indeed, some roads seems to have a pretty well-worn succession path from the law department to the president's chair. And they've done well. But that's another matter. I'm sure the operations and engineering guys have their thoughts about that....

One thing that I am pretty sure of on the basis of a story that I have heard several times from various good sources in railroad management ranks: Mr. Fishwick senior knew the economics of operation well.

The story is told (I will give the PG-rated version) that after the BN merger he learned about the rates that BN was planning on charging for the Powder River Basin coal traffic that was starting to really ramp up. He called Louis Menk, BN's CEO and a well-known operations man, and told him that if BN kept its coal traffic pricing at that level, Mr. Menk would feel a large object in an uncomfortable place in his anatomy. Turns out that BN way underpriced the traffic and seriously underestimated the impact of heavy unit coal trains on track structure and operations. Times were not happy when they had to later extensively rebuild track and then file for a substantial rate increase that made their electric utility customers cry foul very loudly. If I recall correctly, in addition to hearing this story told orally a number of times, it is repeated in Rush Loving's excellent book, "The Men Who Loved Trains".

In any case, I totally support the younger Mr. Fishwick's criticism of EHH's pay package. I've stated my opposition here on TO previously, and I remain opposed, even after reading many posts by members about it, as well as articles in the financial media. And sorry, I care not one whit what the net positive effect is on CSX's stock price. It's an obscene and risky compensation package, and it should be summarily rejected.

MC
Muskegon, Michigan



Edited 1 time(s). Last edit at 04/21/17 10:07 by ironmtn.

ironmtn Wrote:
-------------------------------------------------------

> Interesting to hear you say that. I've heard it
> differently through the years: that though he was
> an attorney, he was also a competent operations
> guy. But I'm an outsider and dependent on what I
> read and hear secondarily from people I know in
> the industry, so I might be wrong ....

> MC
> Muskegon, Michigan

Thanks MC,

I can see Fishwick's analysis of the BN Powder River Coal situation, but that is more of an economics thing. Fishwick did got get deeply into train operations, scheduling and blocking, etc. He pretty well took the Operating Department's word on things with a few exceptions, like when he found out how much dual control, high short hood locomotives actually were costing. I think in EHH's case, there is some method to his madness. CSX does appear to have been too heavy with yards.

I wasn't particularly impressed with Robert Claytor as an operating man. I would probably rank Graham higher, but that is perhaps because I did not have as much chance to see him in action.

My impressions are from 14 years at N&W/NS from 1974-1987 in lower level management positions, so who the hell am I to speak.

I am sympathetic to your view on the pay issues for EHH, but different people have tried for years to fix CSX without much success.

Thanks for the response. Genuinely appreciate it.

You saw N&W / NS from the inside. I never did. I have to defer to that knowledge and experience, and from a position to be able to observe and judge to some degree.

I think we're weighting a railroad president's or CEO's position from two different perspectives. The ability to be able to see the big, strategic perspective, and especially the sometimes challenging-to-understand economics that drive it, are what I place the premium upon for the person in the president's or CEO's chair. I see a CEO certainly as not being oblivious to costs, and certainly giving them due attention when important budgetary line items are getting out of line, or there needs to be strategic constraint for some reason. But in my view, an item like relative cost of dual-control high hood locomotives is not something that should ordinarily be on a CEO's radar screen. Or freight train blocking patterns, or the nitty-gritty of traffic flows and scheduling. That's what other senior executives are for. And if they are not minding the store on such things, then the CEO's job is to remind them in no uncertain terms that they should be.

But then you're saying that's what he did when he found out, and you place a positive weight on doing that kind of thing more that I do. And you seem to suggest that there should have been more of that, and more attention to the grit of daily operations.

Maybe I'm missing what a railroad chief executive's role is really all about, and you have it right, and I have it wrong. My opinion is based on a lot of reading and study of the industry, and actually having made the brief acquaintance of a couple of CEO's, and hearing them speak at some length about their philosophy and view of their roles. But it also borrows a lot from the way other industries look at their top people. The financial press dithers on this: you can find plenty of admiring articles for "hands-on" CEOs who know every minute element of their operations and watch them all like a hawk. And plenty of articles too that seriously question that leadership style, and the risk it creates for missing the bigger, more strategic economic picture. Maybe our good TO friend and management maven Lackawanna484 has something to say about this.

In my view, the kind of strategic economic focus that Jack Fishwick exhibited is what made him a good president for N&W. Those were perilous times for railroads, especially in the East. He managed the challenge of the crumbling eastern roads by walling off EL & D&H through Dereco (itself a topic of much controversy, but ultimately probably a successful if very painful move). He helped move N&W into a solid merger with Southern. And I think he knew the important big picture economics well enough to have that strategic sense drive those decisions, and others. And yes well enough that he could call his friend Lou Menk and tell him what a blunder BN was making on its coal traffic pricing. And turns out he was right.

Back to EHH. Does he have that kind of big picture strategic vision that I place the premium upon, or is his view more nuts-and-bolts operationally focused, as you seem to suggest is most important. I think the latter, more to what I think is your view. "Precision Railroading" certainly has the analytic focus on operational efficiency. And de facto, that seems to be the style and focus of his decision-making.

But I worry about one really big element that I keep hearing in his history: revenue growth from continuing operations has remained flat at his former roads, and gains all came on the cost or acquisition side. That really, really bothers me. In every management role I've ever had, organic, top line revenue growth was a crucial goal. When I hear of someone like EHH who is apparently so focused on the asset and cost side, and who does not have a good record in revenue growth, I get worried. And I seriously question whether they are worth their gold-plated compensation package.

Our good friend Lackawanna484 previously made a statement in another EHH thread that railroading is an asset business. You gotta be focused on asset use efficiency and cost structure. Well yes...and (in my view), no. Sorry, in my view every business must be a revenue growth business. To not grow your top line revenue means that someone else is doing it -- at your expense. They are stealing some degree of the market away from you, and forming a relationship with a customer that you are not. They gain a little more to work with, grow with, have some more cash to weather a storm with or a cost item that gets a little out of hand that you don't have. More could be said.

Markets frequently punish businesses that do not have revenue growth, and they reward those that do. I'm a former IBM'er, proudly. To have seen the company recently report its twentieth straight quarter of declining revenue filled me with a lot of pain, as I'm sure it did many of my former colleagues (terrific, very smart, highly skilled people, all). And I saw how the markets punished IBM. It's still a very profitable company with great products and services, customers and markets. But I know, from my small former corner (like your small former corner at N&W) how that kind of revenue picture starts to play out on the inside. And it's not always pretty. It inevitably just starts gradually eroding the freedom of action that management needs in a world of incessant, rapid, head-spinning and challenging change.

My friends keep telling me, "Give it up, for crying out loud! It's the bottom line, bud. That's all that matters." Well yes...and no. That bottom line is a coin with two sides, expense and revenue. If I'm gonna pay somebody a bejeweled compensation package, they damn well better be able to achieve big things on both sides. So far with all I've read and heard about EHH, he hasn't been that guy.

But I'm Missouri born and bred. The Show-Me State. OK, Mr. Harrison: I'm from Missouri, and as we say there, you gotta show me. Can you do organic, top-line revenue growth too? Can you really have a big picture, broadly economic strategic vision -- what I value in a CEO? If the answer is yes, then just maybe you're worth all of the coin of the realm that CSX may be pushing across the table. Show me, show us.

We will all certainly be watching, intently.

MC
Muskegon,Michigan



Edited 1 time(s). Last edit at 04/21/17 22:19 by ironmtn.

If you let your costs and assets get out of whack with your revenue, things get ugly.

CSX has a fine network for coal hauling. They need to make it produce more revenue for the business they do have and want to grow.

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