(The following report by the Canadian Press appeared at BusinessEdge.ca on March 2.)
CALGARY — After 11 years at the helm of Canadian Pacific Railway, chief executive Rob Ritchie will retire from Canada’s second-largest railroad at a time of unprecedented growth.
Ritchie will hand over the controls in May to Fred Green, who has been with CPR since 1978 and is currently president and chief operating officer.
The Calgary-based railway also announced that chairman Ted Newall will retire and be replaced by current director John Cleghorn, a former chief executive of Royal Bank (TSX:RY).
The news appeared to be well received by the market, with CPR stock rising $1.85 or more than three per cent to $60.49 with nearly 1.7 million shares traded on the Toronto Stock Exchange.
“I view it as very positive,” said Jennifer Dowty, associate portfolio manager of Canadian equities for MFC Global Investment Management in Toronto.
“Mr. Green has the railroad expertise and the knowledge and experience that will help CP Rail stay on track. Hopefully we’ll see increasing operating efficiencies and continued improvement.”
CPR recently unveiled record annual profits in 2005 of $543 million – a gain of 32 per cent – in what Ritchie called the railway’s “busiest and most successful year.”
Operating income broke through the billion-dollar mark for the first time, increasing 27 per cent to $1 billion while the operating ratio – a key measure of efficiency in the railway sector – improved 2.6 percentage points to 77.2 per cent.
CPR is also in the process of chopping 400 positions, mainly management and administration jobs, from its head office in Calgary.
It is one of North America’s six remaining large railroads, with a network stretching more than 22,500 kilometres.