MONTREAL (Dec. 18, 2002) — The new chief executive at Canadian National Railway says he plans no departure from the growth track set by Paul Tellier, who is leaving the job for a similar post at Bombardier Inc.

Hunter Harrison, who describes himself as the guy who ran the railroad while Tellier ran the business, said CN will continue to hone its commitment to scheduled operations, but acknowledged that it will be difficult to replace Tellier’s acumen as a political and business strategist.

Under Tellier, CN was transformed from a sluggish Crown corporation into a highly profitable, publicly traded railway — the fifth-largest in North America.

Harrison, whose appointment as president and chief executive will be effective on Jan. 1, joined CN as chief operating officer during its acquisition of Illinois Central in 1998.

What follows are excerpts from Harrison’s conference call on Dec. 13, the day after the company announced his appointment as CEO:

ON SCHEDULED OPERATIONS:

The real strength of our franchise that has evolved over the past few years has become our merchandise business. The cornerstone of our ability to grow that business segment much faster than the rest of the industry is our scheduled railroading operating philosophy. But our strength in the merchandise segment has to some degree been camouflaged by the weakness of our bulk business, particularly if you look at Canadian grain.

So let me take just a moment to talk about the scheduling railroading concept of our business. Scheduled railroading takes a real passion for service. We define it as simply doing what you say you’re going to do.

ON COST CONTROLS:

Contrary to reports continually in the press, we are not obsessed with operating ratio. We think operating ratio is a byproduct if you provide the right service to the customer you would expect good quality of revenue. If you control the cost appropriately, the byproduct will become a good operating ratio.

ON THE STRUCTURAL FUTURE OF THE INDUSTRY:

There is continual speculation about consolidation. We think we do a pretty good job of running a railroad. We’re in a position where if consolidations were to take place, we would come out well in that scenario. My personal view is that it will eventually take place. I think it’s a matter of timing. There are some real opportunities to have single-line service, and so I think if I had to make a prediction you will see that over the next three to five years.

ON THE “CANADIAN” FOCUS OF CANADIAN NATIONAL:

We have no plans to change the Canadian headquarters or to change the structure of the organization. Quite the opposite, probably. I will be re-establishing residence in Montreal. As we move forward, I see little change in our structure.

ON HIS ROLE AT CN:

I want to play to my strengths, and my strengths are running a railroad. As Paul often described it, he ran the company and I ran the railroad. The position of a chief operating officer was a new position when I joined the organization in 1998. And initially I have no plans to fill that position. I will still be actively involved in the day-to-day operation of the railroad and the commercial side of the business, and will at the same time become more involved with the other areas that I will now be responsible for.

ON HIS MANAGEMENT STYLE:

Clearly, Paul and I have different strengths. My strength is my experience in the railroad business; Paul’s strength is his political background and his knowledge of Canada and the market, and his leadership qualities. So I will continue to leverage my strengths from a railroad standpoint, but at the same time learn from the staff that Paul has put together to learn the other parts of the organization.

I want to point out that I do have a little experience as CEO of Illinois Central, so this is not a new experience for me.