Harrison’s medical leave rattles CSX shareholders

Hunter Harrison, the former head of both major Canadian railways and current president and CEO of CSX Corp. is on medical leave from the Floridabased railroad due to what the company called “unexpected complications from a recent illness,” shaving one-tenth off the value of its shares Friday morning.

CSX wouldn’t disclose the nature of the illness that had afflicted Harrison, 73, who was hired in March after several years leading Canada’s two biggest railways — Montrealbased Canadian National and Calgary-based Canadian Pacific.

The Nasdaq-listed company fell as low as $51.63 US, down about 10 per cent, after the company said chief operating officer Jim Foote would fill in as CEO on an interim basis. Shares recovered to close at $52.80 US, off 7.86 per cent.

Foote — who worked with Harrison for 11 years at CN Rail and joined him at CSX a few months ago — said Harrison fell ill after a multi-day training exercise for the company’s managers.

“Beyond that, out of respect to his family, that’s all we can say at this time,” Foote said on a Friday morning conference call with analysts.

In a statement, he said he expects Harrison’s positive influence on CSX’s performance will continue.

“I believe that the battleship has turned,” Foote said.

“Because the team has implemented a foundation consistent with Hunter’s vision, I do not see any reason to diminish our expectations concerning the pace and magnitude of our future progress.”

Questions about Harrison’s health were raised this year when the Wall Street Journal reported that he often works from home and occasionally uses oxygen because of an undisclosed health issue.

Harrison was credited with generating significant profits at both CP Rail and CN by employing tighter train schedules and leaner expenses through a management philosophy known as “precision scheduled railroading.”