What are Harrison's CSX plans?
Top Jacksonville leaders hope to meet Hunter Harrison and hear the new CEO’s plans for Jacksonville-based CSX Corp.
The emphasis is on “Jacksonville-based.”
“CSX has had a major presence in Jacksonville for a very long time and we would certainly hate to lose that,” said City Council President Lori Boyer, who looks forward to a conversation with Harrison.
Late Monday, railroad cost-cutter Harrison was named CEO of the railroad transportation company and leader of its 27,000 systemwide employees, including an estimated 3,600 in Northeast Florida.
However, cuts soon were announced a month after he left his previous job Jan. 18 with an eye on CSX, which is Jacksonville’s largest Fortune 500 company with 2015 revenue of $11.8 billion.
On Feb. 21, CSX said 1,000 management jobs, with most from Jacksonville, would be eliminated this month. That seriously trims the 2,500 management jobs it has in the city.
What’s next is what’s concerning.
“At this point there is anxiety,” Boyer said.
Still, without word from Harrison or other CSX leaders, Boyer only can wait and hope to hear positive plans.
“It is premature to be fearful,” she said. “We don’t have reason to be yet. We need to have the conversation and understand what his plans are for the future.”
Jacksonville Civic Council Chair Ed Burr agreed.
“I have no knowledge of a reason to be concerned. They are headquartered here,” Burr said.
He said he hopes CSX will be successful, keep its headquarters in town and remain a part of the community’s civic, business and philanthropic fabric.
Burr, a past JAX Chamber chair, hasn’t met Harrison either.
“I certainly look forward to meeting him. I am encouraged the CSX headquarters will remain in Jacksonville for now and we hope they will get involved in the community,” he said, including the Civic Council of 72 business and civic leaders that target civic and community issues and advocates for solutions.
He wants the city’s expanding economic base to be able to absorb the displaced CSX professionals.
In a statement, Mayor Lenny Curry called the job cuts “disappointing.” He said job creation will continue to be a commitment of his administration.
“Jacksonville is strong and will remain strong,” he said through a city spokeswoman.
Burr said he hopes to be introduced to Harrison, possibly by former Civic Roundtable chair and current member Steve Halverson.
Halverson, who sits on CSX’s board of directors, was reserved in his comments Tuesday.
“CSX has been an exemplary corporate citizen and I am certain it will continue to be,” he said, declining to say more.
Halverson, president and CEO of Haskell, said he could say nothing beyond what was issued in a late Monday news release about Harrison.
CSX Chairman and CEO Michael Ward had planned to retire May 31 but left the posts Monday, remaining in a consulting role.
Harrison, the former CEO of Canadian Pacific Railway Ltd., took over immediately as CEO, CSX said in its Monday announcement.
He has a reputation for improving performance as CEO of major North American railroads Canadian Pacific and Canadian National Railway, using “precision railroading.”
Harrison still could walk away from the post if shareholders don’t approve an estimated $84 million payment representing compensation and benefits he forfeited when he left Canadian Pacific.
CSX also agreed with hedge fund Mantle Ridge, which was working with Harrison, to put him, Mantle Ridge CEO Paul Hilal and three other new directors on the company’s board.
The board will have 13 members.
Ward has already said he will be leaving the board.
CSX said in a Securities and Exchange Commission filing Tuesday that Clarence Gooden, who recently resigned as president of the company, also resigned as vice chairman of the board.
Independent director Timothy O’Toole also resigned from the board, the filing said. He had served on the board since 2008.
Edward Kelly, a director since 2002, becomes chairman and Hilal will become vice chairman.
Burr and Boyer haven’t met with Hilal yet, either, and Boyer said he hasn’t reached out to make contact.
Burr hopes that CSX remains as involved in the Civic Council as it did under Ward’s leadership.
“CSX has been an active member of the Civic Council and we hope under Hunter Harrison’s leadership it will continue,” he said.
Burr noted Ward’s broad community involvement and expects it to continue.
“The good news is Michael is staying” in Jacksonville, he said.
Boyer noted Ward had intended to retire by now anyway until heir-apparent CSX President Oscar Munoz left in 2015 to lead United Continental Holdings Inc. Ward agreed to stay another three years.
She wonders whether Ward will introduce Harrison to city leaders or whether the introduction will be made by others, and also doesn’t know how much time Harrison will spend in Jacksonville.
Regardless, she knows what she will say.
“The first thing is to ask what he envisions as the future for CSX and in particular for Jacksonville,” she said.
As much as he will reveal “is what we would like to know.”
“And then from my personal perspective, how do we encourage you to be engaged in the city with a major corporate presence?” she said.
She isn’t aware of a formal structure for such introductions, guessing the chamber, its JAXUSA Partnership economic development division and the mayor make it their business to meet with new corporate leaders.
Boyer recalls a breakfast with TIAA leaders after the financial services company announced it would buy Jacksonville-based EverBank Financial Corp.
It was a breakfast at The River Club Downtown with Curry, chamber President Daniel Davis, JAXUSA President Jerry Mallot, TIAA Chairman and CEO Roger Ferguson and other TIAA executives.
“That was my hour that I got to meet them and extend a welcome,” she said.
Since then, TIAA has announced it will keep EverBank’s headquarters in Jacksonville, but hasn’t yet decided to keep the name. That acquisition is expected to close midyear.
Before Ferguson’s confirmation last week at a JAXUSA lunch that the headquarters would stay where they are, “the inclination was that most of it was staying but you didn’t know how that would play out,” Boyer said.
The chamber has not made a statement about CSX this week.
Boyer said any change in corporate administration brings new perspectives and potential opportunities for more civic engagement.
Michelle Braun, president and CEO of United Way of Northeast Florida, said United Way has had a long-standing partnership with many senior leaders at CSX and looks forward to continuing that tradition.
“CSX is an incredible partner and, of course, we hope that the new leadership will continue to be a community and philanthropic leader,” she said.
Braun said United Way values Ward’s passion for the nonprofit and the community. “We know he will continue to be a champion for change in Northeast Florida,” she said.
Boyer also hopes that CSX’s new leadership will see itself as a major presence Downtown, where the company owns riverfront property at the Jacksonville Riverwalk.
For now, questions remain.
“Does everything stay here? Maybe it does. That is the conversation we all want to have. I don’t know if they know,” she said.