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March 1 (Reuters) - U.S. railroad operator CSX Corp said on Thursday at its first investor day since the death of former Chief Executive Hunter Harrison that more cuts to jobs, rail cars and locomotives were key to its three-year plan for boosting profitability and streamlining operations.
Harrison, cherished by investors for leading turnarounds of Canada's two major railroads, died in December just eight months into a dramatic restructuring campaign that included slashing jobs, shutting eight rail yards, mothballing locomotives and running trains on tight schedules rather than based on customer needs.
CSX shares, up about 1 percent in early Thursday trade, have surged about 50 percent since January 2017 and about 12 percent since March 2017 when Harrison took over as CEO following a high-stakes push by activist investor Paul Hilal of investment fund Mantle Ridge LP.
But the overhaul has triggered persistent service delays and disruptions and raised costs for many shippers, and drawn scrutiny from federal regulators.
The new CEO, Jim Foote, and his revamped management team reaffirmed that it would substantially lower its operating ratio - a closely watched measure of operating expenses as a percentage of revenue to 60 percent by 2020 from 67.9 percent at year-end 2017.
"What are we here for? To make money," Foote told investors at a conference in New York. "What are we trying to do? Drive efficiency, improve the network, improve the quality of our service, which will reduce our costs."
The Jacksonville, Florida-based railroad, the third-largest in the U.S., said it would cut an estimated 2,200 jobs by the end of 2018 and another 4,000 in 2020.
It also plans to decrease locomotives in service by up to 20 percent by 2020, while also reducing the number of rail cars it uses by more than 20 percent in the same time period.
Several shippers have told Reuters that service has been steadily improving from a nadir last summer, although companies such as U.S. agricultural firm Cargill Inc and coal company Murray Energy Corp are still struggling with crew and rail car shortages.
CSX said it expects compound annual revenue growth of 4 percent in 2019 and 2020, driven by rising freight volumes and higher pricing.
CSX also said it could raise $800 million from selling off rail lines and real estate and would spend $4.8 billion on capital like infrastructure and technology from 2018 through 2020. (Reporting by Eric M. Johnson in Seattle and Arunima Banerjee in Bengaluru; editing by Bernadette Baum and Jonathan Oatis)