Friday, December 16, 2011

Ingram, Harris appointed to CP board

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Canadian Pacific has appointed two veteran railroad operating executives to its board of directors, Tony L. Ingram and Edmond L. Harris. The appointments are effective immediately.

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Ingram (pictured) has 38 years of rail experience at two Class I railroads, most recently as Executive Vice President and Chief Operating Officer at CSX Transportation Inc., a position he held from 2004 to 2009. Before CSX, Ingram spent 33 years at Norfolk Southern Corporation, where he worked in various positions ranging from management trainee to Senior Vice President of Transportation, Network and Mechanical. Ingram previously served as a director of Conrail from 1999 to 2003. He received his B.A. from Jacksonville State University.

Harris has 44 years of railroading experience and most recently served as Senior Railroad Advisor to Global Infrastructure Partners, an independent fund that invests in worldwide infrastructure assets, a position he held from 2007 to 2011. In 2011, Harris was retained as a consultant to CP to support the implementation of the redefinition of railyard operations processes. This contract expired upon his appointment to the CP board. From 2010 until 2011, Harris served as COO of CP. Prior to that, he served in a number of positions of increasing responsibility at CN, including Executive VP Operations in Edmonton, Alberta from 2005 to 2007, and Chief Transportation Officer from 2001 until 2003. Before joining CN, Harris worked at Illinois Central Railroad for 30 years with key management roles including VP Operations from 1997 to 1999. In addition, he served as an independent rail operations consultant from 2007 to 2010. Harris received his B.S. from the University of Illinois.

“Tony and Ed are well-respected leaders in our industry and outstanding additions to our board of directors,” said John E. Cleghorn, Chairman of the CP board. “Both have extensive and valuable railway experience. I am confident that Canadian Pacific will benefit from their operational expertise and sound business knowledge. Together with the rest of the board, I welcome Tony and Ed and look forward to working with them as we continue to execute on our strategy of re-defining the railway as a modern 21st century transportation company built on safety, service reliability, and operational efficiency.”

There has been speculation that Ingram’s and Harris’s appointments were brought about by Pershing Square Capital, the New York-based activist hedge fund, which announced in late October that it owned about 20.6 million shares, or 12.2%, of CP’s common stock. “We believe this action may have been advocated by Pershing,” say Dahlman Rose Director-Equity Research and Railway Age Contributing Editor Jason Seidl. “We believe Pershing is attempting to implement significant changes at CP. One possible scenario would involve the separation of the track infrastructure from operations. Pershing said recently that it has held productive discussions with CP. The hedge fund indicated that the talks involved changes to the railroad’s business and operations, executive management, and board composition. CP has not commented on the discussions or its willingness to implement any suggestions. However, we believe the company may be compelled to accept at least some of the hedge fund's proposals in order to placate shareholders on the heels of a lackluster year for the company. While it is hard to predict whether Pershing’s involvement will result in more management changes or major asset divestiture, we believe it could ultimately benefit the shareholders, as fresh ideas get introduced into the company’s strategic planning. Even if no significant changes occur, the involvement of a new large activist shareholder could cause CP management's efforts to improve execution to shift into higher gear. Shareholders may benefit in the end.”