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Canadian Pacific Warns Of “Tremendous Pressure”, “Strong Headwinds” For Economy
Canadian Pacific Warns Of “Tremendous Pressure”, “Strong Headwinds” For Economy
Today, none other than railroad titan Canadian Pacific (whose stock is down 4% despite the torrid surge higher in risk assets) confirmed that not only are things “worse”, but the bottom may have fallen out from what until recently was one of Warren Buffett’s favorite industries, after missing on both the top and bottom line, but especially during its conference call in which CEO Hunter Harrison admitted that he see “tremendous pressure” on the top line, and expects “challenging times” for revenue growth.
Then COO Keith Creel said that he expected volume in 2016 to be notably down from 2015, warns of strong headwinds for the US economy in the first half of 2016 and says CP is storing at least 600 locomotives in anticipation of better times.
Then the CFO also warned that compensation and benefit costs would be lower in the coming year.
Finally, the CEO warned that in addition to the already cut 7,000 jobs another 1,000 workers are about to “potentially” get pink slips.
Finally, and most ominously, CP warned that it sees delay in the Norfolk Southern deal timeline, and may change its strategy regarding the Norfolk Southern transaction.
We conclude with the warning issued by Bank of America one week ago:
…click on the above link to read the rest of the article…
Oil-by-Rail Giant BNSF Threatens Shutdown Over Safety
In June of 2014, a representative of oil-by-rail giant Burlington Northern Santa Fe (BNSF) attended a meeting with regulators where the American Association of Railroads (AAR) lobbied against any speed limits for oil trains. One of the slides from that presentation – titled “Far Reaching Economic Impacts” (image below) — predicted dire consequences to the American economy if speed limits were put in place.
There was no mention of the safety benefits of such a speed limit in the presentation.
And now BNSF is back at it, informing regulators that if a congressionally mandated requirement from 2008 that requires all railroads to implement positive train control (PTC) by the end of 2015 isn’t extended, they may just shut down BNSF.
No trains will run. Because BNSF apparently is so concerned about safety that the company would rather not operate if it can’t do it in the safest manner possible.
Aside from those speed limits it is against. And the modern braking systems it opposes. And its efforts to move to a single person crew for oil trains.
The rail industry is great at publicity stunts. Earlier this year, Hunter Harrison, CEO of Canadian Pacific Railway (CP) also threatened to get out of the oil-by-rail business citing safety risks to “the public.” Meanwhile, as noted on DeSmog, two days after that threat, CP’s vice president of safety was in D.C. lobbying against modern braking systems for oil trains.
And BNSF has pulled off some good public relations stunts in its efforts to shape the narrative on oil-by-rail safety. In early 2014, after a string of oil-by-rail accidents, BNSF announced that it would not wait for regulators and would be investing in 5,000 new rail tank cars that exceeded all existing safety requirements.
As documented by DeSmog, these cars never existed anywhere other than on a press release.
…click on the above link to read the rest of the article…
