CN won't get 'pushed around by a hedge fund': Outgoing CEO Ruest
BNN Bloomberg
The outgoing head of CN Rail said that his plan to cut hundreds of jobs and streamline the company to be a better railroad operator isn't happening because he’s getting "pushed around by a hedge fund."
The outgoing head of Canadian National Railway Co. said that his plan to cut hundreds of jobs and streamline the company to be a better railroad operator isn't happening because he’s getting "pushed around by a hedge fund."
Jean-Jacques Ruest, president and chief executive officer at CN Rail, said in an interview the strategic plan that aims to get CN’s operating ratio, a key industry metric, down to 57 per cent by next year was built with the railroad's long-term interests in mind, rather than addressing short-term gains. Ruest's comments come after the company announced he would retire as early as January while its board conducts a global search for his replacement.
"We've done some mistakes in the past, from which we've learned, we dont want to go back there," he said.
"And we're not going to go back there just for the sake of being pushed around by a hedge fund. Thats not the plan. The plan we have for 2022 is not how low can you go, it's how low should we go."
That hedge fund that Ruest referred to is TCI Fund Management LLP, the U.K.-based firm that holds a 5.3 per cent stake in CN Rail and has launched a proxy fight against the company. TCI wants to replace Ruest with former CN Rail executive Jim Vena and has proposed four new board members that it believes will instill more operational expertise at the director level.
In a statement Tuesday, TCI Fund Management Co-Founder and Portfolio Manager Chris Hohn said Ruest’s exit is "a good start" but added CN needs to address other issues, including a lack of leadership and failed strategic oversight.
