CN Rail plans to cut on spending

Canadian National Railway Co. said it plans to cut spending, streamline management and buy back C$5 billion (about $4 billion) of stock next year as its tries to ward off a shareholder revolt started by TCI Fund Management Ltd. The measures will allow the railway to increase operating earnings and profit per share by 20 per cent next year, CN Rail said in a statement yesterday. It’s looking to improve its operating ratio, an industry measure of efficiency in which a lower number is better, to 57 per cent next year. It was 61.6 per cent in the second quarter.

The railroad will lead an industry shift to become more customer-oriented just as it pioneered an efficiency strategy that most peers have since adopted, Chief Executive Officer Jean-Jacques Ruest said on a conference call with analysts.