FILE PHOTO: Railcars stand idle at the Canadian National (CN) railyards in Edmonton February 22, 2015. REUTERS/Dan Riedlhuber
March 5, 2018
By John Benny
(Reuters) – Canadian National Railway Co Chief Executive Luc Jobin stepped down abruptly on Monday, as the board looks to “energize” the railroad’s leadership amid a major supply crunch that has hurt profits and angered customers.
Shares of the company, once led by railroad legend Hunter Harrison, were down marginally at C$96.23 on the Toronto Stock Exchange.
“The Board believes the company needs a leader who will energize the team, realize CN’s corporate vision and take the company forward,” chairman Robert Pace said in a statement.
Once considered the standard for railway efficiency, CN has struggled recently with capacity constraints that have crimped its ability to meet the strong demand to transport crude-by-rail to U.S. Gulf coast refiners.
Jobin’s departure comes less than a month after Halliburton Co, the third-largest U.S. oilfield services company, blamed CN for delays in frack sand supply.
CN, Canada’s largest railroad, appointed Chief Marketing Officer Jean-Jacques Ruest as interim CEO. Ruest has been with the company for 22 years, and the board said he is well known to customers and investors.
Cowen and Co analysts said despite picking a veteran like Ruest, the surprise announcement along with CN’s existing operational issues would keep “near term” pressure on its shares.
While the company’s shares have risen nearly 30 percent since Jobin took the helm in July 2016, they are down 6.4 percent this year. That compares with a 1.7 percent fall in smaller rival Canadian Pacific Railway Ltd’s shares.
CN, which has missed profit expectations in the past two quarters, reaffirmed its full-year 2018 adjusted profit and spending targets.
(Reporting by John Benny in Bengaluru; Editing by Maju Samuel and Saumyadeb Chakrabarty)