https://www.railwayage.com/freight/class-i/matt-rose-less-is-not-better/
“It was a very lucky day for me and for Berkshire Hathaway when I met Matt Rose,” said Chairman Warren Buffett when Rose’s pending retirement was announced. “Under Matt’s management, BNSF has become a major source of profit and pride for Berkshire. And, as a citizen, Matt has been an exemplar for corporate leadership.”
Rose and Vantuono met at BNSF’s Washington, D.C. office in late November for a wide-ranging interview in which Rose reflected on his career and talked about the industry’s future.
Vantuono: You joined BN as director of automotive terminals.
Rose: Yes. I actually came out of the trucking industry. I joined BN in 1993. We merged on Sept. 22, 1995 with Santa Fe. The CEO, Rob Krebs, came from Santa Fe, the smaller railroad of the two. When I was 38, Rob told me that he wanted me to be the next CEO of the company. I laughed, and he said, “Why are you laughing?” I said, “Because I’ve never run a railroad.” He said, “Well, I’m going to change that tomorrow. You’re going to become the Chief Operating Officer of this company.” And I laughed even more. Sure enough to his word, he did that, and then a year later he named me President. Then a year later, on Dec. 7, 2000 he named me CEO. He stayed one year, and then left. I really was not qualified in the least to run this railroad.
Vantuono: I remember you telling me about this conversation nine years ago when you were Railroader of the Year.
Rose: Same story. Still wasn’t qualified!
Vantuono: How about now?
Rose: Oh, I’m qualified now!
Vantuono: Obviously! So, in the past 25 years, you’ve witnessed a lot.
Rose: I’ve thought of my career as having three different cycles. The first cycle was 2000. I’ll start with safety, as I always like to do. We were really struggling with safety as an industry. A lot of derailments. People just can’t fathom the amount of head-on and rear-end collisions, non-accidental releases, injuries, amputations and deaths that were occurring. Safety was not very good. And we were not growing as an industry; we were really struggling to grow. It was the dot-com era. When I would go to Wall Street, all people wanted to talk about was technology stocks, internet stocks. Everybody was going to point-and-click. No more bricks and mortar. Everyone was going to buy stuff over the internet. The returns of the industry were mid-single-digits. And yet we were spending a lot of capital. There was an enormous amount of frustration, with customers saying, “We’ve got to re-regulate the railroads.” But the regulators, I think, almost felt a little bit of empathy for us because our returns were, quite frankly, subpar. And we would say, “Look at all this money, and we’re only making 7.5% on our investment,” and so no harm was done.
PART OF ARTICLE...written be William C. Vantuono...December 10,2018
