John H. Burdakin and the Grand Trunk Western Railroad
127
John H. Burdakin and the Grand Trunk Western Railroad
127eBook
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Product Details
| ISBN-13: | 9781628952797 |
|---|---|
| Publisher: | Michigan State University Press |
| Publication date: | 12/01/2016 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 127 |
| File size: | 5 MB |
About the Author
Frederick J. Beier is professor emeritus at the University of Minnesota’s Carlson School of Management.
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John H. Burdakin and the Grand Trunk Western Railroad
By Mary Sharp, Frederick J. Beier
Michigan State University Press
Copyright © 2017 Mary Sharp and Frederick J. BeierAll rights reserved.
ISBN: 978-1-62895-279-7
CHAPTER 1
WHEN PUT IN CHARGE, TAKE CHARGE
Bosses set the tone, goals, and expectations. When named to head the Grand Trunk Western (GTW), a railroad bleeding red ink, John Burdakin listened, streamlined operations, and invested in railway track, equipment, and employee training. He improved safety and communications, and enforced the rules fairly and consistently. Slowly — and with a lot of help from others — pride in the workplace began to grow, and profits began to replace losses.
"You get respect back if you give it," Burdakin says. "If I'm going to tell you what to do, that respect has to be there. Nothing can be gained by me acting like your buddy. A boss doing that is going to be taken advantage of." Burdakin believes managers must be competent, confident, and honest. When asked a question, they should answer it as fully and truthfully as they can, though withholding information, if not asked for it directly, is sometimes the wisest course. When employees ask about their future in your company, tell them truthfully where they stand. When labor digs in its heels, negotiate. Work with your people, but when put in charge, take charge. Say what you expect of other employees and of the company.
Burdakin recalls one manager who was called "Mumbles" behind his back because no one could fully understand what he was saying or what he wanted. "I never did decide if it was his Virginia accent or on purpose, but many employees would be stopping by my office, asking me what he really meant or what he really wanted."
Bosses, he notes, must be clear in their communications. "How can you expect people to know what your game plan is, what you're trying to accomplish, if you don't tell them clearly what you're thinking?" he says. "You may find out, in the process, that your thinking is wrong. Maybe your managers can fine-tune the direction you're thinking about, put on the track shoes instead of the lead shoes."
EARLY DEMONSTRATIONS OF LEADERSHIP
The recognition of Burdakin's abilities as a manager started when he was working for the Pennsylvania Railroad (PRR) in Philadelphia. A steelworkers' strike had shut down all the steel mills. Ships loaded with iron ore, from as far away as Newfoundland, Africa, and South America, continued arriving at the port of South Philadelphia. The ore had to be unloaded so the ships could return for more ore. When all of the railroad's hopper cars were filled, the ore was trucked away and stored on railroad property.
Burdakin's bosses, he says, made a "battlefield promotion," naming him the "General Manager of Ore in Storage," to basically serve as a buffer between the dock foreman, named "Big George" Johnson, and the railroad's front office. "Big George" knew the railroad's president and vice president of operations from previous assignments and would not hesitate to call them when something went wrong. "My job," Burdakin says, "was to keep 'Big George' or his people from bothering the top officers on the PRR. I spent considerable time on the docks and became acquainted with everyone there, even playing chess with dockworkers on their lunch hour."
Burdakin was concerned the ore not be stacked too high, given that the ground was swampy and the dock could shift. He learned, though, that iron ore can survive in any weather, even under water, commenting, "You learn something every day!" Even though he wasn't told to, Burdakin also kept track of how many tons of ore were being stored on the ground, so the railroad could collect the correct storage fee — one dollar per ton per month. "They knew I was watching," Burdakin says. "I wanted them to know I was watching." Eventually, the storage rental fee paid for the thirty to forty trucks the railroad used each day to transport the ore from the dock to the storage area. And Burdakin proved his ability to organize and run a project — to take charge when put in charge.
TAKING CHARGE AT GRAND TRUNK WESTERN
The years of training and management experience at the Pennsylvania Railroad/Penn Central came to fruition when Robert A. Bandeen, as president of GTW; Duluth, Winnipeg & Pacific (DWP); and Central Vermont (CV), in 1971, hired Burdakin as vice president of operations for the Grand Trunk Western Railroad. In 1974, Bandeen became president and CEO of the Canadian National (CN). In that year, Bandeen named Burdakin the president of GTW. A year later, he named Burdakin as president of the DWP and CV Railways, as well as the Grand Trunk Corporation (GTC). Burdakin, with Bandeen's support, would "run the show" for the next ten years.
The GTW, headquartered in Detroit, was a subsidiary of Canadian National, the government-owned railroad headquartered in Montreal. The U.S. operations were known as CN's "ugly stepchild" and as the last stop for managers before retirement or an initial stop for new managers being groomed for bigger responsibilities. It had always bled red ink, which CN absorbed, until it reached the point that company officers feared the losses would come to the attention of the Toronto Globe and Mail. It would be an embarrassment if the newspaper reported the number of Canadian dollars being spent to support U.S. operations.
Bandeen was determined to bring GTW up to the standards of modern U.S. railroads and have it establish its own U.S. identity and, he hoped, lessen the red ink and possibly even turn a profit. He hired Burdakin, who had been running Penn Central's Northern Region in Detroit, to oversee Grand Trunk operations. He also hired two other vice presidents: Walter H. Cramer in marketing and Donald G. Wooden in finance and corporate planning.
"At the time, Grand Trunk was about five years behind the times everywhere," Burdakin says. "Bandeen had the right idea to Americanize the U.S. operations. He was not one who wanted instant returns or great profits. He felt the best thing was little improvements in many different places, in many different ways. He wasn't driven — thus we weren't driven — to make the most money we could. If Grand Trunk was going to make profits by abandoning railroads or ignoring maintenance and track improvements, I would have stayed with Penn Central, even though the management people there were tearing the railroad apart. We wanted to improve the Grand Trunk, step by step, in a logical way. My feeling was that the money will come along if you have a company that is running well."
The first thing Burdakin did in his new job was "to get out, see the railroad, and meet the people. Whenever I came across a track gang or an engine crew, I would stop, get out and shake their hands, and introduce myself as the new vice president. At least they knew what I looked like and hopefully could get a little confidence in their own minds of what my vision of the Grand Trunk should be."
Burdakin says he found the Grand Trunk had competent managers, but ones who were in the habit of waiting for their Canadian supervisors to tell them what to do. "I didn't think that was the way to run a railroad," Burdakin says. "I wanted the initiative of all the managers, wanted them thinking every day about how to improve their piece of the railroad. I wanted them to pick up the reins and start driving their own horse. Nobody at the time was thinking critically about whether something was needed or not."
William Litfin Sr., who spent his entire career in operations with GTW, made up his mind about the kind of "take-charge" leader Burdakin was in 1971, only a few months after Burdakin had been named the railroad's vice president of operations. He first met Burdakin in Pontiac, Michigan, after two trains had collided, causing fires and loss of life.
"John showed up immediately and started coordinating what to do — talking to the press, getting engines moved, getting cars picked up," Litfin says. "He didn't know anyone. We were a bunch of strangers. But he coordinated everything really well. He never got mad, he never hollered. When a situation started falling apart, he put it back together. I was impressed by his dedication and knowledge. And from that time on, I was impressed with him."
Another early example of leadership came at Port Huron, Michigan, where Burdakin and a transportation team found five carpenters replacing the roof on a small building adjacent to a siding. Burdakin asked what the building was used for. The answer: To house livestock when they had to be taken off freight cars "to be fed and watered" in compliance with federal law. How often was the building used? Burdakin asked, noting he couldn't recall seeing cattle in Grand Trunk railcars. No one knew. It took three days to get the answer, which no one really wanted to share with the new boss. The building had been used once in the past five years, for one horse. And that horse hadn't been on a train; it had been on a truck that Canadian officials had refused entry to. So the GTW building had been pressed into service. The next question from Burdakin: Can marketing get us out of the agreement that requires such a facility? The answer, eventually, was yes.
"So that was one thing we didn't have to worry about any longer," Burdakin says. "But that was the type of thinking going on at Grand Trunk when I first arrived."
Burdakin and Bill Glavin, his new chief engineer, then set about eliminating GTW buildings that duplicated others or were unnecessary. Every toolhouse, for example, had separate lavatory facilities for the trackmen and the signalmen. Why not consolidate those facilities? Together, Burdakin and Glavin eliminated more than 160 buildings the first year, ranging from outhouses to a four-story, multipurpose brick building at Port Huron. The consolidations saved money and maintenance costs, a step in the right direction.
In Durand, Michigan, however, the railroad ran into resistance from local citizens when it announced plans to raze the brick train station. "So we sold it to the community, where it still serves as a town center. The old station also houses the Michigan Railroad Museum," Burdakin says. "So that worked out well for all concerned."
Burdakin and Glavin also closed a carpenter's shop that had specialized in replacing the molding in Grand Trunk buildings. "This was the kind of molding you could buy at a lumberyard," Burdakin says. "We put the carpenters outside, working on bridges and other properties, rather than sitting around a shop, spending quite a bit of time thinking about moldings."
Another thing that Burdakin changed "almost instantaneously" at Grand Trunk was the system used for promotions and transfers, which was controlled "almost 100 percent" by the Personnel Department. "If any manager had a vacancy and needed to promote someone, it was left to the Personnel Department to do it," Burdakin says. "Those promotions and transfers were announced by Personnel on the last Friday of every month. Everyone involved lived in fear of those Fridays, fearing they might be relocated. Where I came from, the person in charge who had a vacancy had a major say in the replacement. A trainmaster, for example, picked the assistant trainmaster, with the help of the Personnel Department, but not Personnel independently. It was important to me that the person responsible for the territory be able to select the people who were going to fill a vacancy."
Burdakin also changed the compensation model that relied on how many dollars and how many employees managers managed. Those managing the most dollars and the most employees earned the most money. That model, Burdakin says, worked against efficiencies.
"If your salary as a manager was going to be reduced if you reduced your workforce, where's the incentive?" Burdakin says. "That went against my principles. If I had to reduce the workforce, I wanted my managers to do that, and I didn't want them thinking of their job level first."
At the same time, Burdakin encouraged his managers to "see what the rest of the world was like" and to attend and participate in meetings of professional organizations. GTW managers had seldom gone to such meetings. "I told them they were expected to attend such gatherings, if invited," Burdakin says. "How can you find out what other railroads are doing without having lunch with them? What are their problems? What advice do they have on solving your problems?" The bonus: When you go, take your wife — again, if she is invited and wants to go — "and let her associate with her peers. Surprisingly, the spouses would frequently find out those people with big titles from large carriers weren't as knowledgeable as the people we had at Grand Trunk. It also helped them understand the fifteen-hour days and midnight telephone calls that were sometimes necessary. I wanted them to know they were a key partner, that they were important to the team." The second bonus: GTW would even pay for a babysitter, if needed, so the couple could attend professional meetings together.
Burdakin says it didn't take long before most employees seemed "to take more interest in what we and they were doing. People were coming up with ideas, thinking about how their jobs could be done better and at less expense. What new equipment did they need? It was my job to find a way to get them the tools they needed to operate efficiently."
The changes apparently impressed a lot of people and motivated them to work more productively and make GTW a better railroad. One manager, Warren Brown, for example, pushed ahead with his plan to provide radio service from one end of GTW to the other. Burdakin made it happen, putting up five communication towers between Chicago and Detroit, and radios replaced telephones, eliminating the poles and wires along each track.
Burdakin also saw to it that air-conditioning was installed at GTW's tenstory, fifty-year-old office building in downtown Detroit. Before air-conditioning, office employees were sent home when the temperature and humidity reached a certain point on hot summer days. On such days, Burdakin recalls with a smile, the main activity seemed to be checking the thermometer.
In another example of leadership, longtime GTW executive Howard M. Tischler discovered that Fortune magazine was not including GTC in its annual list of the nation's fifty largest transportation companies. The magazine had never seen GTC financials. The statements were sent, and GTC was ranked in the high forties on Fortune's list.
LABOR RELATIONS
One of the biggest problems that Burdakin faced at GTW was labor relations. "There was no communication between labor and management. There was no trust either way," he says. As an example, he relates how some clerks in Pontiac, Michigan, unhappy with the new keypunch machines they felt threatened their jobs, had taken to slipping sand into the machines. The sand interfered with the punch cards that were tracking GTW freight and its all-important service to the Detroit auto plants. "I knew," Burdakin says, "I had to find some way to communicate with the families, the wives, as well as the workers, to make sure they're happy with their jobs and what's going on in the company, so they'll respond appropriately when I changed the things I knew needed to be changed."
One of the points of common agreement was employee safety. Burdakin also moved to improve employee morale and to clean up railroad properties. Finding GTW track in better condition than that of many carriers, the railroad advertised itself as the "Good Track Road." The black locomotives were painted a medium blue — immediately dubbed "Burdakin Blue," a designation Burdakin wasn't fond of but lived with. Things just looked better and more modern.
In 1971, when Burdakin arrived at GTW as vice president of operations, he discovered GTW crews were to be paid for a week's work even though rail traffic was at a virtual standstill between Christmas and New Year's when Detroit's automobile plants shut down for the holidays. He met with labor leadership and said he could not afford to pay crew salaries with no work to do, and that he was going to furlough crews for that week. Labor responded with pickets — including one sign that read "Burdakin Kills Santa Cluas." (To this day, Burdakin recalls the picket sign correctly spelled his name but misspelled Claus.) The union threatened that workers would be late coming back to work after the forced furlough.
Burdakin kept negotiating with the union and finally achieved agreement: Those who worked the day before the Christmas layoff and then came back to work the day after the furlough would receive one day's bonus pay. Importantly, the union agreed that workers would return to their previous positions, eliminating any need for the seniority bidding process that would be expensive and time-consuming, and would cause delays as workers moved into new jobs. The furlough still wasn't popular, but the settlement met Burdakin's fiduciary responsibilities as manager of a company where old ways had to change.
"When you're the boss, some people won't always like what you're going to do," he says. "You have to get past that."
While he was at it, Burdakin also ended the Grand Trunk tradition of letting all office employees off work at noon on Christmas Eve. Many would gather at restaurants, and a few would overindulge, including one accounting employee who wobbled home, knocked over his family's Christmas tree, and then went to bed. "You can imagine the impact on the family's Christmas celebration," Burdakin says. "I went home thinking about GTW's part in ruining a family's celebration of Christmas and was determined this wasn't going to be repeated on my watch."
And so it came to be that GTW employees stayed in the office on Christmas Eve and joined in departmental luncheons (without alcohol). They brought snacks and finger foods from home, and GTW donated a bit toward the luncheon expense. Office employees then were allowed to go home a bit early, in early to midafternoon.
(Continues...)
Excerpted from John H. Burdakin and the Grand Trunk Western Railroad by Mary Sharp, Frederick J. Beier. Copyright © 2017 Mary Sharp and Frederick J. Beier. Excerpted by permission of Michigan State University Press.
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