New CSX CEO pledges to improve service and company culture

JACKSONVILLE, Fla. — CSX Transportation needs to improve its customer service and culture, CEO Joe Hinrichs told employees during a town hall meeting on Monday, his first day on the job.

Hinrichs acknowledged the controversy surrounding Precision Scheduled Railroading but says CSX won’t be changing its operating model because it’s hard to argue with its five basic principles: Operate safely, improve customer service, control costs, optimize asset utilization, and value and develop employees.

CSX has made great strides with safety, costs, and asset utilization since adopting PSR in 2017, says Hinrichs, a longtime auto executive who served as president of Ford Motor Co. So improving service and CSX’s corporate culture will be among the new chief executive’s priorities.

“I was a customer for a couple decades. Our customers don’t really love us,” Hinrichs says.

CSX has a big opportunity to make customers want to put their freight on the railroad by providing better service. “I’ve been on the other side of this for decades. We did business with rail because we had to, not because we wanted to,” he says.

The first order of business is to get back to full crew staffing so CSX can handle demand from its existing customers. Second, CSX needs to demonstrate to customers that it can deliver. Then the railroad will be able to gain more business from current shippers and try to gain new traffic by capitalizing on rail’s cost and environmental advantages over trucking.

“If we give them the service that they expect, with reliability and predictability, the sky’s the limit,” Hinrichs says.

Hinrichs spoke at length about the importance of teamwork and developing a successful corporate culture that’s dubbed One CSX. He wants to create an environment where employees feel appreciated and valued, work well together, support each other, and are proud to work at the railroad.

He challenged employees to think about great teammates they’ve had in the past, how they can become better coworkers, and to let change start within themselves.

“Great teammates … don’t cuss at somebody, they don’t belittle somebody. And so hold yourself to that standard and hold your teammates to that standard and we can raise the level of our performance just by how we work together,” Hinrichs says.

Hinrichs seeks to improve relations with unionized workers and labor leaders. “In my first hundred days, we’re going to spend a lot of time out in the field. I’ll be out there late this week, next week, and the week after listening to our employees, getting to know them … learning about the rail operations, too,” he says.

Hinrichs toured Moncrief Yard in Jacksonville on Monday with Jamie Boychuk, the railroad’s executive vice president of operations. While there he got dirty working with freight cars, sat in a locomotive cab, and got advice from employees about union issues before moving on for a tour of the dispatching center.

“We need our employees out in the field to feel appreciated and part of One CSX,” he says.

Hinrichs has already reached out to union leaders and will meet with them soon. “I think that’s important that they know that this relationship is important. I’m going to see them — not them come see me — and we’ll really start to build that relationship,” Hinrichs says.

He adds: “If you want a relationship to get to a level where you have trust, you have to invest in time, interaction, and communication. And we’re going to do that.”

While at Ford Motor Co., Hinrichs led four national labor negotiations with the United Auto Workers. General Motors and Chrysler both had strikes, but Ford did not because of its relationship with the UAW, Hinrichs says.

Shortly after Hinrichs retired from Ford in 2020 during a management shakeup, he ordered a Lincoln Navigator online just like any customer would. The SUV finally arrived in May.

“In it is a plaque on the dash that says, ‘Made exclusively for Joe Hinrichs from your friends at the Kentucky Truck Plant,’ ” Hinrichs says. “Two and a half years after I was gone. They’re not trying to suck up to the president — I’m not going back there. That means a lot to me. That means we did things the right way and people still take the time to value and appreciate that relationship. Those are the things we want to do together.”

Hinrichs said he has no plans to make management changes at the railroad, tamping down on speculation that analysts raised at a shipper conference last week.

Hinrichs received a warm welcome from the nearly 1,000 CSX employees who attended the town hall meeting at the Moran Theatre just down the street from CSX headquarters. Some of his comments earned applause, while his self-deprecating humor drew laughs, as did a remark about CSX’s locomotive fleet.

“By the way I’m an Ohio State fan, so the colors on those locomotives is a little bit more like our competition,” he said, a reference to the maize and blue of Big Ten rival Michigan.

“I didn’t say we’re changing them,” he said to laughter. “Don’t quote me on that. I didn’t say that. I am getting used to it, though, but it’s not natural.”

The town hall meeting was open to CSX employees via webcast, as well. Trains obtained a recording of the event, which lasted nearly 90 minutes and included outgoing CEO Jim Foote, who is retiring but will remain on as a consultant for six months.