Name: CSX turns to a car guy to fix problems at the giant railroad
Uploaded: 2022-11-29
Duration: 8 min 39 s
Description: Former Ford President Joe Hinrichs must navigate CSX through a Congressional labor deal to avoid a strike.

Former Ford President Joe Hinrichs must navigate CSX through a Congressional labor deal to avoid a strike.

CSX turns to a car guy to fix problems at the giant railroad

Leadership

joe. So great to meet you to talk about C. S. X. And your new job. You know, you've taken charge at a crucial time. And I say this because you're in the middle of these negotiations with 12 unions to get an agreement a new labor contract. And this has been dragging on for a long time. How are things going since you joined and when do you think you're going to have a deal? We're optimistic that we'll get through this. So the next several weeks we have a few more votes to come in. Seven of the unions have already ratified the agreement. A few haven't. So we'll have to work through that. But what we're really focused on finding a solution and engaging all parties, including the government in this case because the Presidential Emergency Board to find that solution, I'm engaged in listening to the challenges that agreement was reached before I got here. Really just looking to where we can move from here and find resolution. Well, I understand that the first thing you did when you became Ceo, you arranged a special meeting to talk to union leaders. What did you say to them? And what impact do you think that conversation will have on getting a labor deal. I flew up to meet with our two largest union partners in person and what I said really was I'm here to I'm here to help. I don't have any of the history here and really challenge them to think about it. We're not we're not happy with the current state. Then we can't keep doing the same thing we're doing over and over again. So let's talk about what we can do to find new solutions. Let's try new things and let's be open to new ideas. And that's really what I wanted to know is that we're here to help. We're here to challenge ourselves to think about new ideas and to be part of the solution going forward. You worked for many years at Ford Motor in many leadership positions and you had good relation with the U. A. W. The United Auto workers. To what extent is that labor background resonate with the railroad unions. They did their own background research. And so your reputation reputation precedes you, right? So they spent some time checking on me. But importantly, they won't understand where your value system is. Do you truly value the employees who are represented by unions as part of the team, as part of the value of the company? And I do. And I think they realize that see that from our experience in the auto industry and then what we brought to rail. Well, besides meeting with those unions, you've also been on a so called listening tour. You've been traveling around the country. You've been meeting with csx employees. What did you learn from those conversations really. First of all, there's so much pride in our employees and the and the real history and their families, money, their multigenerational, they love the work they do that they kind of they kind of come to love it, but there's opportunities to make it better for them and some of the work life challenges we have with scheduling and some other issues. I've just really been showing up unannounced, listening to what they have to say, introducing myself, learning more about what they do and how they do it, you know, pulling pins on the hump yard and doing things like that. But really just getting to know them, them getting to know me and then seeing themes of where we can go, help solve problems. Well, speaking of solving problems here, you are at csX, what's on your agenda? What's the first thing that you really want to do? The first thing is to work on our employee experience with around this one CsX initiative around building a culture of one team, all of us feeling valued and appreciated working together to serve our customers. Really focused on that because the challenge we have culturally is getting enough people to work in our organization and stay as part of the team out in the field and then people working together to serve our customers better. If we can get better employee engagement, leading to more capacity and better customer service, it'll serve solve a lot of problems in the rail industry. What about supply chain issues Because when people these days think about the railroads, they think of all those disruptions and delays that we had all through the last couple of years. What are you doing to fix those problems first and foremost, we need to get our capacity up and our service levels up where we can be dependable to our supply or to our customers and get our employee levels up to be able to provide that, you know, rail has such a big advantage over truck. Environmentally, it's much better. 45 times more fuel efficient. We, we provide our own infrastructure on the rails, whereas taxpayers pay for the roads and all the congestion is out there and importantly were lower cost. So there's a lot of reasons why rail makes sense for the economy and can help the economy. We need to be able to csx to provide the capacity and the service that allows our customers to use us more. And that starts with our employees, gain the right numbers and getting them to have a great experience. How close are you now to solving those disruptions and those constraints in supply chain. We're getting a lot closer the last couple of months, our service levels come up dramatically. Our performances come up dramatically and our manpower levels to come up with about 300 or so below where we want to be right now, but we're getting close, we'll be there by year end, where we want to be and then into the first quarter, that will help us a lot and then ultimately it's about how the network flows. We can get the manpower levels up and have better operating performance, more capacity will allow the system to flow better, which ultimately will serve the entire supply chain. You're talking a lot about manpower and I hear that you've been having difficulty attracting talent, hiring lots more people, What do you have to do to get the people that you need to make some adjustments to our pay scale? We used to come in at 80% now are people coming 100%. We've been really focused on the areas where we need talent to be able to really recruit them and train them. Really just talk to them about the experience we can create for them to really enjoy working on the railroad and all it entails. They're good paying jobs, good benefits and really a great company like CSX is a fun place to work. What about being a railroad? I mean, uh, it's not really new economy in some ways. Is that an obstacle for you to attract top talent? It's something that we, we do have to overcome because there's a view that, that we don't have the same kind of levels of new technology and some other places have trains are actually, I found this in the new job training, people love trains, people taking pictures of our trains, people sending me notes all the time. There's something about a lot of passion about the railroad industry and about trains themselves. What we need to do is provide some more technology solutions and create some visibility to that. But importantly, just be focused on creating the best experience we can for our employees. So they love what they do. Many companies, especially in the logistics area, have been investing in whether it's artificial intelligence, machine learning the list is long. Where are you in introducing new tax? Yeah, there's several things we're doing. We're trying new locomotive technologies for the, for the propulsion system, whether it's hybrid electric or electric or hydrogen. We're also using drones to do the um, inspections of the rail lines and the rail yards for, for the quality and for the and for the dimensions and everything like that. Good examples because the weather can be a bit of a challenge to do that. And we're really challenging ourselves on the software side to, to use algorithms and machine learning to think about what can we do better for the plan itself because the complexity of the network is such that how you developed a plan about where the trains go and how they move and who goes where is really a big challenge and using software and algorithms to make that better is a big opportunity joe you came to the ceo job as a so called outsider and you worked as we said for many years at ford motor, but we know that the railroad industries, they veer more to having an insider to run other companies in what ways does this being an outsider work for or against you for all the changes that you wanted to. I think the greatest opportunity is having a customer mindset. I was a customer of rail, we were a customer forward for decades and so I get to see how it's like to be on the other side of this and a big opportunity to serve customers better for CsX and the rail industry, a customer perspective is important. Then there is the opportunity to ask a lot of fresh new questions like why do we do that? Why does it have to be that way? It's an opportunity really for everyone to have to rethink things and just don't accept the status quo. So I'm really excited about what that brings. The challenge of course is make sure we have people that know the rail industry keeps it running every day efficiently and safely. And I'm proud to say we have a really great team that helped me do that on your first call for CfX, you told investors and this was just recently that if we can get people working better together solving problems, we can have a better railroad and better performance. So you're now the company's top leader. What's the single most important leadership thing that you have to do to make this all happen? I think the most important thing you can do as leaders, be focused on serving others and helping those others do their job well and understanding what role they play in the company. We all have a role to play on the team and we have our different roles to play. For me, it's about focusing the energy on serving the employees, who create the value by doing the work every day and having the energy focused that way as opposed to up. And if we can create that servant leadership mindset throughout the whole entire organization, we can create a whole different one csx culture that really is focused on the employees that serve the customer.