WASHINGTON — The AFL-CIO today became the latest organization to oppose an activist investor’s bid to gain control of Norfolk Southern.
“In our view, Ancora’s business plan to reduce Norfolk Southern’s operating ratio while improving safety and service is not realistic. Railway labor unions, shippers, and federal regulators have warned that Ancora’s plans may jeopardize the safety and service improvements that Norfolk Southern has made since the 2023 derailment in East Palestine, Ohio,” the union coalition wrote in a letter to NS shareholders today.
Ancora has said that its plan to implement the low-cost Precision Scheduled Railroading operating model at NS will enable it to significantly reduce the railroad’s operating ratio, ultimately to 57% within three years. The Cleveland-based activist investor says its plan does not rely on job cutbacks.
“Ancora’s proposed strategy to achieve additional reductions in Norfolk Southern’s operating ratio without significantly reducing headcount is, in our view, not based in reality,” the union argued in its eight-page letter.
Rail labor organizations, shipper groups, NS customers, the Surface Transportation Board, and Federal Railroad Administration all have raised concerns with Ancora’s proposals.
Ancora, which has been highly critical of Norfolk Southern’s safety record and its response to the East Palestine wreck, says its board candidates and proposed management team would improve service and safety.
Shareholders will determine the outcome of the proxy battle during the NS annual meeting on May 9.
This is what happens when the CEO embraces the unions on strategy instead of keeping them at arms length.