CN CEO steps down as railway grapples with demand woes

Canadian National Railway Co. is searching for a new chief executive officer who will respond to operational challenges with “speed and determination” after the surprise resignation of Luc Jobin — a move that comes as the railroad grapples with surging demand.

CN announced Monday that Jobin would be leaving immediately, less than two years after he took on the role of president and chief executive. The firm has seen record volume growth put pressure on its capacity since late last year, leading to service disruptions and complaints from some customers.

“The board believes the company needs a leader who will energize the team, realize CN’s corporate vision and take the company forward with the speed and determination CN is known for,” CN’s board chairman Robert Pace said in a statement released Monday.

CN also acknowledged in the statement that it has faced operational and customer service challenges in recent months “led by high demand and insufficient network resiliency, coupled with severe winter weather conditions.”

“CN must accelerate execution of the innovation strategy articulated at our Investor Day last June,” Pace said. “The board is confident this remains the right course to restore and retain industry-leading metrics and best-in-class customer service.”

The board has appointed CN’s chief marketing officer Jean-Jacques Reust, a 22-year railroad veteran who Pace said “is well known to customers and investors,” as its interim CEO. The railway said an international search for a new leader is now underway.

Jobin initially joined CN in 2009 after holding senior executive roles at Imasco, Imperial Tobacco, British American Tobacco and Power Corp. He replaced Claude Mongeau as CEO of the railway in July 2016.

National Bank analyst Cameron Doerksen said CN has made it clear that the decision to replace Jobin “is in large part related to the serious operational challenges CN has faced since the fall.”

“CN risks losing customers and its well-earned reputation for best-in-class operational performance, so the Board clearly felt that a change in leadership was needed now,” he wrote in a note to clients.