CSX railroad closes and downgrades major facilities
By
Jeff Lusanne
8 September 2017
Just months after the takeover of CSX railroad by Mantle Ridge Capital in the spring of 2017 the list of destructive changes is growing every week.
The Mantle Ridge Capital hedge fund and board of directors has installed CEO Hunter Harrison to head CSX, which covers 23 US states, primarily in the south and southeast, and two Canadian provinces, handing him $84 million up front and promising roughly $300 million total over his 4-year contract.
Harrison is a ruthless railroad asset stripper, who has emphasized his “short tenure,” making clear that his cuts will be imposed rapidly. These changes will set the pattern for the rest of the industry. Layers of management have either been tossed out or told to justify their jobs by implementing drastic changes to operations that yield cost savings. More facilities are being closed while service levels continue to fall and worker safety is imperiled.
The CSX CEO stated he would close and downsize many rail yards, specifically hump yards that are a more automatic, mechanical method of sorting railroad traffic. Harrison claims most of CSX’s hump yards are inefficient, and tells investors that each hump yard closure would involve over $10 million a year in savings. Instead, some yards are being converted to “flat switch” yards, where employees do more on-the-ground work to sort traffic.
In a hump yard a train of cars is slowly pushed up an elevated rise, where a crewmember uncouples (disconnects) cars, and then the cars roll downhill into different tracks that sort them by destination. On the downhill slope, there are devices called retarders that mechanically slow the cars to keep them at a reasonable and safe speed.
A signal maintainer…