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Canadian Pacific appoints former CN boss Hunter Harrison as president and CEO

Canadian Pacific Railway (TSE:CP)(NYSE:CP) Friday named former Canadian National Railway Co. (TSE:CN) boss Hunter Harrison as its new president and chief executive officer.
Canadian Pacific appoints former CN boss Hunter Harrison as president and CEO

Canadian Pacific Railway (TSE:CP)(NYSE:CP) Friday named former Canadian National Railway Co. (TSE:CN) boss Hunter Harrison as its new president and chief executive officer.

After a long, public proxy battle this year, Harrison’s appointment as president and CEO ends a crusade led by CP’s largest shareholder Bill Ackman, head of Pershing Square Capital Management to dethrone the long-time, yet faltering management and elect his hand-picked, seven directors.

For much of the past seven months, the war waged on, with Ackman and now-former management issuing letter after letter to shareholders to try and sway a decision at CP’s annual general meeting in May.

Hours before a vote to decide their fate, CP’s beleaguered CEO Fred Green resigned, and five other board members said they would not stand for re-election.

Green was followed by a handful of CP’s senior management, including John Cleghorn, Tim Faithfull, Edmond Harris, Michael Phelps and Roger Phillips.

Pershing Square had garnered support from many of the railway's other major shareholders, and several proxy advisory firms publically advocated for Ackman’s nominees in the election, including his call to appoint Harrison as Green’s replacement.

With nearly 50 years of railroad experience, Harrison previously served as the president and CEO of CN and, prior to that, as president and CEO of Illinois Central Railroad.

"The board welcomes Mr. Harrison's experience and leadership to CP," said CP chairman Paul Haggis.

"We look forward to benefiting from his strong track record of service reliability, efficient asset utilization, and strategic capital expenditure."

Indeed, Harrison’s reputation is shining, having received numerous accolades, including North America's Railroader of the Year by Railway Age magazine and CEO of the Year by the Globe and Mail's Report on Business magazine.

Harrison is also credited for turning CN into best in class in terms of profitability and efficiency, according to analysts cited by the Financial Post.

CP on the other hand, currently has the worst operating ratio in the industry and Harrison is now tasked with fixing that – something he has reportedly vowed to do by 2015 by implementing his “precision railroading” principles.

"CP is an incredible franchise with significant market opportunity, solid infrastructure, and innovative and hard-working employees," Harrison said.

"I am proud to be working with one of North America's iconic companies and I look forward to quickly getting to know the priorities of CP's customers, shareholders, employees, and the communities served by the railway."

Canadian Pacific operates a North American transcontinental railway providing freight transportation services, logistics solutions and supply chain expertise.

Just a week after the company saw major management and board changes, Teamsters Canada announced a strike against CP that lasted the six days sand saw 4,800 members of the Teamsters Canada Rail Conference walk off the job.

As a result of the strike, CP suspended its freight service across the country, prompting Federal Labour Minister Lisa Raitt to introduce back-to-work legislation.

In other news, last week the company and U.S. Silica Holdings (NYSE:SLCA) announced a multi-year agreement for the movement of frac sand from Silica’s mining and processing facility in Sparta, Wisconsin.

Financial details of the transaction were not disclosed.

CP’s shares were up 1.12 per cent in morning trading in Toronto, at $74.34.

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