By Justin Franz 

MONTREAL — Canadian National is firing back at its largest shareholder, dismissing claims that change is needed in the railroad’s executive suite after its failed bid to acquire Kansas City Southern. 

After the U.S. Surface Transportation Board torpedoed CN’s planned takeover of KCS, TCI Fund Management announced that it would launch a proxy war against CN in an effort to shake up the board and replace CEO JJ Ruest. TCI has called for a shareholder meeting to vote on four new board members of its choosing. But on Friday, CN said TCI was making “misleading” claims and not offering a new or better vision for the railroad.  

Previously, CN had announced a new effort to lower its operating ratio and create more value for shareholders, but TCI officials said it wasn’t good enough. This week, Ruest said he stood by the railroad’s previously announced plans. 

“CN has announced an ambitious strategic plan to deliver immediate and long-term shareholder value while retaining our commitment to safety, customer service and the communities we serve,” Ruest said. “This plan builds on the investments we have made in technology and capacity over the past three years to drive long-term sustainable growth in total revenues and operating margins. CN maintains an open and constructive dialogue with its shareholders, including discussions about areas where we can improve our business performance, but we will not indulge unfounded and bad-faith arguments that serve the interests of one shareholder over others – or of one of our competitors over CN. CN’s Board and senior management team are intently focused on putting forward ideas, initiatives and people that drive us forward to where CN and the railroad industry are going, not where it’s been.”

CN officials also noted that TCI was a major Canadian Pacific shareholder; that TCI falsely claimed the railroad would lose billions when its KCS bid failed; and that it had made false claims about the railroad’s performance. Perhaps most notable though was that TCI had yet to offer specifics about how its hand-picked CEO — Jim Vena, a long-time CN and Union Pacific executive who retired from the industry earlier this year — would do a better job.