Talk about change: Tellier leaves CN for Bombardier; CN promotes Harrison to top spot

By Pat Foran, Editor

Paul Tellier's a change champion. For the past 10 years, Canadian National Railway Co.’s president and chief executive officer has issued a clear, concise message: Change is good, quick change is even better. And he’s practiced what he's preached.

Tellier certainly walked the talk this week. The quick-change artist surprised the rail industry (and the Canadian capital markets) by making the ultimate change. He’s leaving CN to become president and CEO of Bombardier Inc., the Montreal-based manufacturing and services conglomerate whose holdings include rail transportation equipment.

CN’s board responded swiftly. On Dec. 13, the board announced it had elected CN Chief Operating Officer E. Hunter Harrison to take Tellier’s place as president and CEO, effective Jan. 1.

"Hunter is the best operating executive in the rail business, the man who designed and implemented the scheduled railroad at CN," CN Chairman David McLean said in a prepared statement. "Scheduled railroad practices — now being embraced by other major railroads — have made CN the service and efficiency leader of the North American rail industry and allowed it to grow its service-sensitive merchandise businesses at a healthy pace."

Harrison, 58, has served as CN's executive vice president and chief operating
officer since March 1998; he joined the company's board in 1999. Between 1993 and 1998 Harrison was president and CEO of Illinois Central Corp., and Illinois Central Railroad Co.

He began his railroad career in 1964 as a carman oiler with the Frisco (St. Louis-San Francisco) Railroad while attending school in Memphis. Following the Frisco-Burlington Northern merger, he held several executive positions in transportation/operations. Harrison joined the IC and ICRR in 1989 as vice president and chief operating Officer. He was named senior vice-president-transportation in 1991 and senior vice president-operations in 1992.

While the timing of Tellier’s decision to leave CN took many by surprise — "I'm still a little bit in shock, to be honest with you," Harrison said at a Dec. 13 press conference — the CN board already had a succession plan in place.

"We were ready for Paul's decision to leave CN," McClean said. "Hunter is focused, articulate, intense, a commanding leader whose operations skills complement his business acumen. The board of directors is confident that Hunter's experience and drive, along with the depth of CN's management team, will assure the company remains at the forefront of corporate efficiency and profitability."

The Tellier-to-Harrison transition will be smooth, and will "in no way distract us from our mission," Harrison said at the CN press conference, adding that CN’s priorities remain the same: to nurture "a passion for service, efficiency and innovation to drive market share gains, sustained profitable growth and greater shareholder value."

Harrison added that he has no immediate plans to make any major management-team changes.

"We have a very, very strong team," he said. "I am very comfortable with it."

He also doesn’t plan to bring in a COO to take his place — at least for the time being.

"I want to play to my strengths, and my strength is running the railroad," he said.

The Tellier-Harrison tandem was widely considered to be one of the rail industry’s most — if not the most – effective CEO/COO team. Tellier served as the global-thinking, externally focused, politically savvy change agent who transformed a lumbering government-run railway to arguably the most efficient North American Class I. The hard-driving but less-intense Harrison ("I'm probably a little more informal than Paul is") has been CN’s internally focused talent-blender, a "car mover" extraordinaire who has evolved into the industry’s most prominent scheduled-railroad guru.

Just how the shift in leadership styles might change the CN landscape remains to be seen. Harrison, for one, declined to speculate.

As CN's CEO, "I plan to improve upon my weaknesses and leverage my strengths," he said.

Tellier, 63, will replace Robert Brown, who recently had "asked to be relieved of his functions," said Bombardier Chairman Laurent Beaudoin in a Dec. 13 prepared statement. At a Dec. 13 press conference, Tellier — a member of Bombardier’s board — said Beaudoin had approached him about taking the position a few weeks ago.

"[Tellier] is one of the country’s most respected leaders because of his vision, his competence and his leadership," Beaudoin said. "I am very pleased that he has agreed to take up the challenges Bombardier must meet today in a complex environment that also offers good growth prospects."

The challenges are many, Tellier said, adding that he’ll (surprise) push and prod to promote change. He’ll officially take Bombardier’s reins Jan. 13.