CSX to move 550 jobs downtown?

[vicupstate]

So was this Lease deal just a pawn in a chess game to avoid the takeover or hasten the end result?

The lease deal is immaterial. As is CSX's purchase of 550. Jax real estate isn't going to be factor in deciding the future of CSX.

I realize it is pennies in a jar to CSX, but why even pursue it if this was on the horizon? 

[remc86007]

I have no doubt, if merged, it would likely relocate, but I don't think DOJ (due in part to political pressure) would allow a merger to happen.

Would a Trump DOJ allow it?

That's an interesting and frightening thought. My guess would still be no, especially if the merger could result in job losses (especially if it in turn involved giving any advantage to a foreign corporation). I'd be willing to bet that Gov. Scott would pressure Trump to prevent a merger from happening. I imagine that Trump isn't worried about overall economic efficiency as much as he is keeping his base happy and having employment stats to brag about. Plus, he can't afford to piss off NE FL prior to midterms and potentially a 2020 run (God help us all).

[Lunican]

I realize it is pennies in a jar to CSX, but why even pursue it if this was on the horizon? 

I think it's because they still don't know exactly what is going to happen. A special shareholder meeting has been called for mid-march to decide whether to install Hunter Harrison (or the terms of installing him). Although management has been signing leases and moving forward with the status quo, the direction of the company will be determined by a decision at the shareholders meeting.

[Westside Guy]

Can someone explain to me why if CSX merges with another railroad the headquarters is as good as gone?  It seems to me that it would be the other way around, CSX is larger than any possible merger partner, wouldn't that mean the headquarters would stay here? Can a merger even happen? I imagine that if CSX tried to merge with someone like CP, the other three major railroads would cry foul and it would be challenged in court, just like what happened with Conrail.  My biggest concern is that the new leadership at CSX just decides to unilaterally move the headquarters somewhere else.

[remc86007]

I don't personally think CSX would leave Jax under any of the potential scenarios, but for the sake of argument, here are the potential merger partners I can think of and some thoughts:

BNSF - I don't know anything about this, but a quick internet search doesn't bring up any credible rumors of interest.

Canadian National - Seemingly a less likely target than Canadian Pacific, and I don't think the current administration would have DOJ approve this.

Canadian Pacific - CSX rejected this potential merger a few years ago, I imagine those reasons still exist, but since Harrison formerly was here, it seems the most likely target and could be pushed through by Harrison and his board. I just don't think Trump, as mentioned in my prior post, would allow this to happen.

Kansas City Southern - too small of an operation in Kansas City; joint headquarters would likely be Jax.

Norfolk Southern - DOJ would likely not allow this merger for competitive reasons.

Union Pacific - I don't know anything about this either, but a quick internet search doesn't bring up any credible rumors of interest.

[Kerry]

I have no doubt, if merged, it would likely relocate, but I don't think DOJ (due in part to political pressure) would allow a merger to happen.

Would a Trump DOJ allow it?

That's an interesting and frightening thought. My guess would still be no, especially if the merger could result in job losses (especially if it in turn involved giving any advantage to a foreign corporation). I'd be willing to bet that Gov. Scott would pressure Trump to prevent a merger from happening. I imagine that Trump isn't worried about overall economic efficiency as much as he is keeping his base happy and having employment stats to brag about. Plus, he can't afford to piss off NE FL prior to midterms and potentially a 2020 run (God help us all).

Heaven forbid a President care about the middle class instead of Wall Street 1%ers.  It seems like just 3 months ago this is what The Left thought they were voting for.

[remc86007]

I have no doubt, if merged, it would likely relocate, but I don't think DOJ (due in part to political pressure) would allow a merger to happen.

Would a Trump DOJ allow it?

That's an interesting and frightening thought. My guess would still be no, especially if the merger could result in job losses (especially if it in turn involved giving any advantage to a foreign corporation). I'd be willing to bet that Gov. Scott would pressure Trump to prevent a merger from happening. I imagine that Trump isn't worried about overall economic efficiency as much as he is keeping his base happy and having employment stats to brag about. Plus, he can't afford to piss off NE FL prior to midterms and potentially a 2020 run (God help us all).

Heaven forbid a President care about the middle class instead of Wall Street 1%ers.  It seems like just 3 months ago this is what The Left thought they were voting for.

Let me clarify; I said it is frightening because Trump does not, in my opinion, act consistently and seems to often not be aware of the consequences of his actions. I very much want a president who cares about the middle class instead of wall street, but I don't think we have that. I would hope that any president would would have their DOJ block a merger of any of the major railroads.

[spuwho]

Can someone explain to me why if CSX merges with another railroad the headquarters is as good as gone?  It seems to me that it would be the other way around, CSX is larger than any possible merger partner, wouldn't that mean the headquarters would stay here? Can a merger even happen? I imagine that if CSX tried to merge with someone like CP, the other three major railroads would cry foul and it would be challenged in court, just like what happened with Conrail.  My biggest concern is that the new leadership at CSX just decides to unilaterally move the headquarters somewhere else.

Headquarters decisions post merger typically have no consistent pattern and are somewhat subjective and political at the same time.

AT&T moved its HQ to San Antonio Texas because the CEO of SBC, Ed Whitacre lived there and didn't want to move to Bedminster, NJ where the AT&T HQ had been. Randall Stephenson moved it to Dallas, TX to improve their "reach".

When Boston Market separated from McDonalds, the new CEO they hired refused to move from Denver to Chicago, so he convinced them to move the HQ to Denver instead.

When Chicago based OfficeMax merged with Office Depot, the CEO tried to get incentives to keep the HQ in Illinois, Illinois refused, so the CEO moved to the Office Depot HQ in Boca Raton with no incentives.

Boeing moved their HQ from Seattle to Chicago because the executives needed better travel access to foreign markets, the CEO moved as well. But then moved their HQ for their Defense Division from St Louis to Washington DC.

Caterpillar is currently planning to move their Peoria, IL HQ to Chicago for the same reason Boeing did. The execs need better travel options for foreign markets.

HSBC is moving its banking HQ from London to Hong Kong because they don't like UK tax regulations.

As far as Hunter Harrison goes, he sold his home in Connecticut for under $50m but spends most of his time at his home on a golf course in Wellington, Florida. He just listed his nearby 33 acre ranch in Florida for $33m.  He lived in Chicago during his IC days and continued to live there off and on when he took the reins at Canadian National (CN) and spent time in Montreal.

So if he becomes CEO of CSX, I would say there is a high probability the HQ would stay here unless he flips it to another railroad.

[remc86007]

I know very little of the railroad industry, but it seems to me that a railroad company's headquarters would be less mobile than the headquarters of something like a restaurant chain. Restaurant chains and retail headquarters in general likely have roughly the same employee needs as many other businesses and therefore could hire the necessary people easily in a new market. CSX, on the other hand, likely employs many people with specialized skills and backgrounds (e.g. logistics people) that would require either trying to drag the existing employees with them or expend a lot of time and resources to replace.

[FlaBoy]

http://jaxdailyrecord.com/showstory.php?Story_id=549398

CSX's 1,000 management job cuts called 'aggressive move'

I don't think those 550 employees will be coming downtown...

[remc86007]

http://jaxdailyrecord.com/showstory.php?Story_id=549398

CSX's 1,000 management job cuts called 'aggressive move'

I don't think those 550 employees will be coming downtown...

Regardless of the cuts, I believe they are still trying to move the entirety of their Southpoint office downtown. Although, with 1000 people leaving, one would imagine there would be room in CSX's existing space to accommodate them.

[BridgeTroll]

Was poking around looking for more information... (there aint much) and found this...

http://csx-sucks.com/prof/

[RiversideHusker]

$300 million compensation package, while 1000 people lose their jobs. Makes me sick!

[coredumped]

I heard from someone that works there, that "manager" could be anyone. They call everyone a manager, even if you have no reports. So these could be low level employees.

[remc86007]

To be fair, it is often necessary, to maintain the competitiveness of an organization of this size, to do large scale layoffs with some regularity. Otherwise, corporations would age to a point of paying their older employees too much and not being able to get rid of them without fear of legal action. I have no doubt that these layoffs will be targeting the older employees. For many of them, I'm sure they'll land on their feet (severance +pension+401k).

I do, however, agree with the above poster that our current situation where CEO pay is extreme and other salaries are low in the name of shareholder value is screwed up. The problem, as I perceive it, is due to a misconception that shareholders and boards and executives seek long term value, but often their interests are far shorter term than the employees. I don't know what the solution is; perhaps employee representation on the board?