A battle is underway for control of Canadian Pacific Railway, and some of the ammunition being used is very revealing.
CPR’s plans for the future will have a direct effect on Langley, and specifically on those using roads crossed by its rail line, which bisects the commercial area of this community. More details of those plans were made public on Monday.
CPR board chair John Cleghorn issued a letter to shareholders in defence of the current board and management, and specifically CEO Fred Green. Green has been under fire from William Ackman of Pershing Square Capital Management, which in recent months has become CPR’s largest shareholder, with 14 per cent of the stock.
Pershing wants to replace Green with former CN CEO Hunter Harrison and cut its operating ratio (the cost of running the business, compared to total income) from 82.5 per cent to somewhere in the mid-60s by 2015. In other words, it wants CPR to become much leaner and emulate CN which, after privatization, under CEOs Paul Tellier and Harrison made a remarkable turnaround and drastically lowered its operating ratio.
Two specific points made in the letter stand out. Cleghorn makes reference to CPR’s plan to build longer passing sidings, to allow for the operation of trains of greater length.
The 232 Street overpass, to be built as part of the Roberts Bank Rail Corridor program, is only going ahead because of plans for a longer siding there. This will allow much longer trains than those operating at present to meet there, and travel through Langley.
Perhaps an even more important note is the comment that Teck, shipper of the East Kootenay coal contained in many of the trains going through here, will be able to ship its increased coal production in longer trains. Up until now, Langley residents have been told that longer (and more) container trains were coming, but there has been no mention of longer coal trains.
The letter to shareholders is yet another reminder to local residents that congestion on Highway 10, 200 Street and Fraser Highway will be much worse in years to come. The Mufford and 196 Street overpasses will ease some of that congestion, but not all.
There needs to be a second phase of the rail corridor program, and the first priority in that phase must be a Highway 10 overpass. Our politicians must make that clear.
