When Joe Hinrichs was an executive at Ford Motor Co., the automaker brought in an industry outsider as CEO and implemented a "One Ford" plan of “One Team. One Plan. One Goal.”
Now Hinrichs, 55, is the industry outsider brought in to run railroad company CSX Corp. as the company promotes a “One CSX” initiative to bring its nearly 22,000 employees together.
“I’ve seen this movie before and it has a great ending,” Hinrichs said in an interview Oct. 21.
The previous day, CSX reported third-quarter revenue rose 18% to $3.9 billion and earnings rose by 9 cents a share to 52 cents. Hinrichs officially joined CSX as chief executive officer Sept. 26 at the end of the quarter.
While CSX has been performing well, Ford was struggling when the company brought in former Boeing executive Alan Mulally as CEO. Hinrichs credits Mulally with successfully turning the automaker around during his tenure from 2006 to 2014.
“He was an outsider,” said Hinrichs. But people throughout the organization bought into the mission statement of everyone working together.
“It was very successful,” he said.
Two decades at Ford
Hinrichs spent nearly 20 years at Ford before retiring in 2020 as president of automotive operations.
CSX announced in mid-September that Jim Foote, 67, was retiring as CEO and Hinrichs was coming in as his successor. It was a surprise to many but had been in the works for some time, giving Hinrichs an opportunity to study the company.
“I had the benefit of having a few months knowing I was coming here,” he said.
The change at the top is not expected to bring major changes in CSX’s strategy.
“The seeds were planted,” Hinrichs said.
“Now we’re bringing the water and sun and it’s growing.”
CSX officials discussed the One CSX philosophy for the first time during their third-quarter conference call with analysts. But the slogan had actually been implemented more than a year ago.
Hinrichs said he believes CSX employees are buying into the plan of everybody working together,
“If we do that well, our business will be successful and we’ll all be rewarded for that,” he said.
Hinrichs said his meetings with employees have been positive and he hasn’t seen any concern that the company hired an industry outsider.
“With everything we’ve been through, they’re open to new ideas,” he said.
In the past five years, CSX overhauled its management and implemented a new operating system for the railroad. Just as the company seemed to be on track, the coronavirus pandemic disrupted operations and CSX is still struggling to replace staff that left during the pandemic.
CSX has said it needs 7,000 train and engine employees to fully serve its customers. It currently has 6,819 and is hoping to reach its goal by the end of the year.
Hinrichs joined CSX as major U.S. railroads were closing in on agreements on new contracts with 12 railroad unions. So far, six of the unions have approved it but a possible strike looms if all 12 don’t agree.
Hinrichs had a reputation at Ford for successfully working with the United Auto Workers union and he’s hoping to have similar positive relationships with the rail unions.
“In my first week on the job (at CSX) I met with union leadership,” Hinrichs said. “That relationship is very important.”
He also joined CSX at a time when the economic outlook is uncertain, threatening potential demand for freight service.
“We still believe, for 2022, we’re going to see the growth we expected,” Hinrichs said.
CSX isn’t offering projections of future earnings. Jacksonville’s other Fortune 500 freight transporter, Landstar System Inc., reported higher third-quarter earnings but said fourth-quarter results will likely be lower.
“With expectations of a more muted peak shipping season and, relatedly, a more challenging demand environment for loads hauled by van equipment and other truck transportation services, I expect truck revenue per load to underperform historical fourth quarter trends in the 2022 fourth quarter, and as such, to be below the 2021 fourth quarter by 5 to 7 percent,” Landstar CEO Jim Gattoni said in an Oct. 19 news release.
The trucking company’s third-quarter revenue of $1.816 billion was 5% higher than last year, and earnings rose by 18 cents a share to $2.76.