The executives at Canadian Pacific weren’t planning on running an independent railway. But now that its holding company has decided to spin off the railway, CP execs hope to keep it independent.

"Our goal is to build a strong and robust competitor in North America that is an independent railroad," Hugh MacDiarmid, executive vice president of CPR, told the Journal of Commerce Online last week. The company executives will apparently not be courting an acquisition by any of the four Class I United States systems or by the Canadian National Railway.

CP, however, will be publicly traded when it is spun off by the holding company next fall, so ultimately its fate rests in the hands of investors. Analysts have speculated CPR is prime for a takeover, and have identified Union Pacific as a likely suitor. Holding company Canadian Pacific Ltd. announced on February 13 that it would spin off its rail, ships, energy and hotel holdings. The announcement reportedly caught CPR execs by surprise. In developing its financial strategy, CP management will reportedly focus on three areas to achieve and maintain viability:

making its Delaware & Hudson network in the northeastern United States profitable; cutting back more of its branch lines on the Canadian prairies; and improving what the company calls "asset velocity" or turnaround times of locomotives and cars through better integration of information technology.

Of the railway’s 14,000 miles in Canada and the U.S., most are performing profitably except for the Delaware & Hudson. The D&H has its own track and agreements with U.S. carriers to run and provide competition over lines taken over from Conrail by Norfolk Southern and CSX as far as New York City.

Cutbacks for CPR’s Canadian prairie branch line operations may result in the creation of short lines or regionals, according to MacDiarmid.