Hinrichs to exploit his experience, engage workforce as CSX's new leader
9/19/2022
By Jeff Stagl, Managing Editor
Sept. 15 was a big news day in the rail industry, especially in the wee hours.
Several hours after midnight, the major freight railroads and several large rail labor unions announced they reached a tentative national agreement, averting a possible crippling rail strike in the United States and Canada. Not long after, CSX Corp. rolled out a press release touting its new leader.
CSX announced its board appointed Ford Motor Co. executive Joseph Hinrichs president and CEO to succeed James Foote, the Class I’s leader since December 2017 who will retire Sept. 26. Foote will continue to serve as an advisor through March 31, 2023, to help with the leadership transition. Hinrichs, 55, has more than 30 years’ experience in the global automotive, manufacturing and energy sectors, and most recently was president of Ford’s automotive business.
Although it was widely known that Foote planned to retire at some point in the near future, few industry constituents and observers likely figured he’d do so before the fourth quarter began.
“I thought Jim Foote had a few years left,” wrote independent transportation industry analyst and Progressive Railroading columnist Tony Hatch in a Sept. 15 email to his clients.
Robert W. Baird & Co. Inc. Senior Research Analyst Garrett Holland was a bit surprised, too.
“The transition timing was earlier than expected,” he wrote in a Sept. 15 report.
Another surprise is Hinrichs is the first high-level executive to come from an industry outside the rail sector and step right into a Class I CEO position.
“This isn’t the first time the complicated, not to say insular rail industry has reached outside for management and fresh ideas (BNSF, UP), but often the pattern is to bring [someone] into a, not the top role at first,” wrote Hatch. “Rails have worked well and should perhaps even do more of a “Mr. Inside/Mr. Outside” approach — that’s an old Army football reference and not meant to be gender specific.”
Hinrichs led Ford’s $160 billion global automotive operations. He previously served the automaker as president of global operations, President of the Americas, and president of Asia Pacific and Africa, and held various executive roles in global manufacturing, materials planning and logistics.
CSX’s leader since December 2017, James Foote addressed the Midwest Association of Rail Shippers summer meeting July 19 in Lake Geneva, Wisconsin. Jeff Stagl During his career, Hinrichs garnered experience with overseeing and participating in product development, purchasing, manufacturing, labor and government affairs, marketing and sales, information technology, sustainability, safety and environmental engineering.
He comes to CSX with a good reputation, Hatch said.
“This is a gamble, but if the CSX team pulls together, likely a good-odds one,” he wrote.
Baird’s Holland like Hinrichs’ odds of maintaining the status quo at the Class I.
“We do not expect a meaningful shift in strategy or execution at CSX, where the company had been making better relative progress in restoring staffing levels,” Holland wrote.
CSX board members believe Hinrichs is the strongest candidate to lead the Class I through its next phase of growth and transformation because he’s been at the helm throughout most of Ford’s own transformation, producing record operating and financial results. They’re convinced he has demonstrated strength in operational excellence, employee engagement, sustainability and safety.
In addition, CSX’s current leadership team is confident Hinrichs’ rich experience is translatable to the rail industry, said CSX spokesperson Cindy Schild in an email.
“Joe has a lot of experience balancing safety and efficiency in an industry with complexities and dynamics that are similar to those we are navigating today in rail,” she said. “We have no doubt Joe will learn about the intricacies of the rail industry quickly.”
Hinrichs concurs. During an interview with RailPrime conducted shortly after CSX unveiled the top appointment, he expressed confidence about speedily gaining knowledge about the organization and rail realm by applying his skillset and leadership approach. CSX has struggled with operational performance and hiring/retention for quite some time — issues he dealt with and overcame during his career, Hinrichs says.
“I look at CSX as being on a journey. They have had issues with operations. So where do you go from there? I had the same experiences at Ford,” he says.
Hinrichs feels honored to lead a company as strong and storied as CSX, and join an industry with a rich history. Rail is a low-cost and sustainable transportation option that can be better capitalized on, he believes.
“I want to get CSX to deliver on that proposition,” Hinrichs says.
The career change appears to be well timed. There is a lot of excitement in the rail industry, these days he says.
“The potential rail strike reminded us how important the rail industry is to the U.S. economy. The history and role of the industry is important to me, how it helps society and the economy,” says Hinrichs. “For 30 years, I have been part of the auto industry, which also is an important industry for the U.S. economy.”
Hinrichs served Ford for 30 years, most recently as president of the company’s automotive business. He has experience in the global manufacturing and energy sectors. Ford Motor Co.What does Hinrichs bring to the table as CSX leader? A major rail shipper’s viewpoint, for one.
“I come from a big rail customer, and that will help me to ask questions from a customer standpoint,” says Hinrichs. “I also have labor experience — 85% of Ford’s workforce is unionized, and the rail industry is heavily unionized.”
In addition, he is well versed in lean manufacturing and characterizes himself as a people person.
“I like to engage with employees to build a culture and teamwork, to have a dialogue and be inclusive,” he says.
Besides crafting a one-for-all workforce, his first orders of business include continuing to execute CSX’s current growth strategy, driving growth through innovation and harnessing technologies. But job No. 1 is getting to know the management team and the employees, perhaps through townhall meetings and field visits.
“I need to understand the people, the rail operations and the rail business,” says Hinrichs.
Service performance needs a lot of attention, too — which means communicating better with shippers.
“CSX has heard from its customers loud and clear. We need to work on operations,” says Hinrichs. “We will listen and engage with customers to help find solutions.”
Another pressing matter: Hinrichs needs to relocate from Detroit to Jacksonville, Florida, which is home to CSX’s headquarters. He’s been married for 32 years and has three children.
Hinrichs stresses the CSX leadership change isn’t all about him. Each person in an organization is an important contributor, he believes.
“I've gone into every one of my positions to engage with people,” says Hinrichs. “Now I’m ready to bring my all to this position.”
