Canadian Pacific Want to Install Cameras in Loco Cabs:

Canadian Pacific Railway literally wants to keep an eye on its train crews, and says installing cameras aimed at the locomotive operators will improve safety on the railways.  At a meeting next month, Calgary-based CP will urge Minister of Transport Marc Garneau to change the law that restricts the viewing of in-cab recordings to government investigators - never rail companies - in the event of a collision or derailment.

Keith Creel, CP's president and chief operating officer, said the cameras will make railways safer by allowing the company to ensure train crews are following operating rules, and not texting or engaging in other prohibited distractions. "Just the presence of the camera's going to be a huge deterrent," Mr. Creel said in an interview. "It's going to reduce the likelihood that some unauthorized activity is going on in that locomotive cab."

The union that represents train crews at CP backs the use of video and voice recordings in Transportation Safety Board investigations of derailments and other incidents, but opposes the company's use as an unneeded and illegal invasion of privacy.  "We don't have a problem with the video and voice recording, we just don't want it to be used to erase Canadians' rights," said Doug Finnson, president of the Teamsters Canada Rail Conference.

He said locomotive speeds and operations are already closely monitored by traffic controllers, who are in regular radio communications with crews. He fears the company will watch the camera feeds in real time and use face and word recognition technology to monitor and discipline employees for criticizing managers or discussing union business. "Changing the law doesn't make rail operations safer," Mr. Finnson said. "They don't need to film us for safety reasons."

The Transportation Safety Board, Canada's rail safety investigator, called for the installation of in-cab voice and video recorders in 2012, after the derailment of a Via Rail train that killed three people in Burlington, Ont. The TSB says being able to review the video and voice recordings of crew actions and conversations will help it better understand what preceded a collision, and help it rule out possible causes. Probes of several serious rail collisions in North America have benefited from access to crew recordings, and resulted in changes to regulations that improved safety, the TSB notes, adding the aviation industry has made use of such recordings for at least 30 years. "It's not moving as fast as we would like," said Julie Leroux of the TSB. "We need to know the interaction in the locomotive cab."

The Railway Association of Canada, citing data from the Transportation Safety Board, says "human actions" are responsible for 18 of 87 main-track derailments between 2010 and 2014. (Track and equipment problems caused 59 crashes in the same period.)

Via Rail has in-cab voice recorders on 21 of its 73 locomotives. Before it installs more, it is awaiting the results of a joint study of the recorders with Transport Canada, the TSB, railways and unions, a spokeswoman said.

Canada's largest freight railway, Canadian National Railway Co., said it had no plans to install in-cab cameras because it is not allowed to use them for "pro-active accident prevention and quality-control purposes."

A review of the Canada Transportation Act released this year called for Canada to harmonize its rail-safety regulations with those of the United States, where the Federal Railroad Administration is preparing a rule mandating their installation on all major freight railways and the passenger service Amtrak. Mr. Garneau has said he will consider the report's recommendations. "Inward-facing cameras are seen as an additional resource in enhancing safety," said Ed Greenberg, a spokesman for the Association of American Railroads.

CP's Mr. Creel said he isn't concerned about the behaviour of "99 out of 100" train operators. "But unfortunately there are a few unprofessional ones out there that get in that cab, out of sight out of mind, and they're not going to comply with the rules," he said.  Mr. Finnson, the union leader, said CP wants to use the recordings to replace good management practices, and that human-related safety issues are a symptom of being forced to work harder and longer hours with insufficient rest periods. "We have a fatigue problem that they're denying. If there's no fatigue issue, why do they want to film us?" he said. (Teamster Rail News) 

A Really God Job, If You Can Get It!

Canadian Pacific Railway's E. Hunter Harrison is the top-paid CEO in Calgary, AB, hauling in $19.9 million in total compensation for the year, according to the Herald's annual survey of the city's largest publicly traded companies.  The outspoken 71-year-old railroader - who was also Calgary's top-paid CEO in 2014 - earned a base salary of $2.8 million in fiscal 2015, with most of the remaining $17.1 million coming in the form of stock or option-based awards and annual or long-term incentives. As part of his overall pay package, Harrison also receives a number of other benefits, including a club membership, a housing allowance and personal use of company aircraft. (Harrison's personal use of company aircraft in 2015 was valued at $1.1 million).

Canadian Pacific acknowledged in its annual information circular that Harrison's compensation is much higher than his peers, but said "the return to shareholders during his tenure is equally impressive." In an email, CP spokesman Martin Cej said Harrison has created more than $14 billion in shareholder value since his arrival at the railroad in 2012, and added CP's share price outperformed the S&P/TSX Composite index by 120 per cent through the end of 2015.  Cej noted the initial target when Harrison joined CP was to achieve an operating ratio - a measure of railroad efficiency, where a lower number is better - of 65 percent within four years. CP surpassed that goal in less than two years, and in the first quarter of 2016 boasted an operating ratio below 60 per cent.

"Under his leadership, CP has transformed from the worst-performing Class 1 railroad to one of the industry's very best," Cej said.  But, like the overwhelming majority of the 100 publicly traded companies included in the Herald/Global Governance Advisors survey, CP's performance took a hit in 2015 due to the economic downturn caused by the global collapse in oil prices. The railroad's net income declined 8.4 per cent year-over-year, while its one-year total shareholder return declined 20.4 per cent.

And CP's performance improvements during Harrison's tenure have not come without a price - the company has reduced its employee head count by more than 6,000 since mid-2012, mostly through attrition. Approximately 1,800 positions were eliminated in 2015 alone.

Canadian Pacific's say-on-pay vote was narrowly defeated at its annual general meeting in April, with only 49.9 per cent of the shares voted in favour of the company's executive pay policy. Arden Dalik - senior partner with Global Governance Advisors, the consultancy that helped compile this year's survey - said it's a sign "the bloom is off the rose" at the railroad.

"He (Harrison) got a significantly longer honeymoon period than a lot of other CEOs get.  He's a very charismatic and brilliant individual and he bought himself a lot of time, but now the realities are coming to bear," Dalik said. "The honeymoon's over, and it's about time to have a really tight connection on pay and performance here."

After Harrison, the second-highest-paid CEO in Calgary in 2015 was Shaw Communications Inc.'s Bradley Shaw, who earned total compensation of $13.1 million. According to the Herald/GGA survey, the top five executives at Shaw - founder JR Shaw, Bradley Shaw, Peter Bissonnette, Steve Wilson and Jay Mehr - were paid a total of $60.4 million in 2015.  JR Shaw's total compensation for 2015, almost $13.2 million, ranked second among all executives.  Third among CEOs on the Herald's list for 2015 is Suncor Energy's Steve Williams, who earned $12. 2 million, while Encana Corp.'s Doug Suttles was fourth with total compensation of $11.2 million.  (Postmedia Corp)

CP Tuscan Red Returned to Montreal in 2000

CP GP38-2 3084 was built in January 1986. This GMD-built GP38-2 was painted in Tuscan Red and Gray with 1960's script lettering in March 2000 to be used as a back up for the Royal Canadian Pacific Train. Assigned to Alyth Diesel Shop in Calgary Alberta, she is used on locals when not working on CPR's "posh" Tourist train. Now with a repaired fuel tank (after a minor derail mishap three months ago, she has been released from the Winnipeg Shop and is currently working in the Red Deer, Alberta area. (The photo by Jim Sandilands shows CP 3084 working on Canadian Pacific business train in 2000 at Montreal West Station with mates CP FP9A 1400 and F9B 1900.  In late November 2000 Canadian Pacific sent a business car train composed of locomotives and cars from the Royal Canadian Pacific service to Montreal from Calgary for marketing purposes. While in Montreal the train stayed at Windsor Station (Terminus Windsor) and made a Saturday night dinner train trip to Hudson, Qc and return. The train left Calgary with FP7Au 1400, F9B 1900, GP38-2 3084, baggage-generator 95, stateroom car 79 N.R. Crump and business cars No. 77 Van Horne, No.78 Royal Wentworth and No.74 Mount Stephen. The baggage-generator and the N.R. Crump were left behind at St. Luc yard and business car No.73 Mount Royal was added to the consist for the move to Terminus Windsor. (My thanks to Jim Sandilands).  

Canadian Pacific Stock:

Canadian Pacific Railway Ltd. raised its dividend and launched a share buyback program two months ago, rewarding investors in the wake of the failed takeover bid for Virginia-based Norfolk Southern Corp.  Calgary-based CP raised the quarterly dividend to 50 cents from 35 cents, and repurchased as many as 7 million shares or 5 per cent of its shares. The announcement coincides with the release of the company's first-quarter financial results, which beat analysts' expectations even as revenue slipped. As of March 31st, CP posted diluted earnings per share of $3.51 on revenue of $1.67-billion. Adjusted earnings per share rose by 11 per cent to $2.50. Analysts expected adjusted per-share profit of $2.41 and revenue of $1.6-billion.  Net profit rose by 69 per cent to $540 million, from the year-earlier quarter.  The operating ratio, a closely watched comparison of revenue and expenses, improved to 58.9 per cent.

The stronger U.S. dollar gave a boost to CP, which gets about 55 per cent of its revenue in U.S. dollars. The company trimmed expenses, ran faster, longer trains and raised freight charges to combat a 5-per-cent slide in revenue amid a slowing economy. CP's Chief Operating Officer (COO Keith Creel) said in a conference call with analysts on Wednesday morning the company is consolidating its three regional divisions into two. Eliminating yards, unneeded sidings and mainline switches will help it reduce operating expenses further, the company said.  CP also raised its estimate for job reductions this year to 1,400 jobs this year from 1,000.

E. Hunter Harrison, CP's chief executive officer, said he was pleased with the results "particularly given the soft economic conditions we were faced with." He said he is sticking with his forecast of "double-digit" profit growth this year as the U.S. and Canadian economies rebound in the second half of this year. "It's a case of if not when," he said. CP posted double-digit declines in freight revenue for five categories of cargo, including crude oil (28 per cent), potash (12 per cent), and metals, minerals and consumer products (16 per cent.) Revenue from hauling forest products rose by 25 per cent and fertilizers increased by 14 per cent.

"CP's volume growth has been stunted by the global commodity recession, given its intermodal [container] volume exposure, at 37 per cent, is the lowest relative to its peers," said Lee Klaskow, a Bloomberg Intelligence analyst. "Meaningful growth beyond 2016 will be challenging without a recovery in commodity demand." CP's share price has fallen by 20 per cent in the past 12 months amid a broad sell-off of transportation stocks. The share price has risen by 8 per cent since the takeover was called off last week, in anticipation the company would repurchase its shares. CP cancelled a share buyback program last fall to focus on the $28-billion takeover of Norfolk Southern. But CP last week abandoned the attempt to become a coast-to-coast railway, faced with stiff opposition from the U.S. Department of Justice, a long list of rail customers, and Norfolk Southern itself.

Mr. Harrison repeated his view rail consolidation is the inevitable solution to the congestion and lack of new infrastructure the industry faces. "This is not going away. People will come to their senses," Mr. Harrison said. "I'm not worried about my legacy. I'm much more about creating shareholder value. But I would predict it's going to happen and it will work very well." The cancellation of the takeover bid prompted Steve Hansen, a stock analyst with Raymond James, to raise his share-price target to $210. He said CP's move ends the uncertainty that prompted a share-price discount to that of Canadian National Railway Co.  Share repurchases signal a company's board believes the stock price is under-valued, and can boost per-share earnings by reducing the amount of stock outstanding. (The Globe and Mail)