INDEPENDENCE, Ohio — The Brotherhood of Locomotive Engineers and Trainmen is now backing activist investor Ancora Holdings and its call for management change at Norfolk Southern.
The union’s decision, announced today, is the second in as many days: The union representing maintenance of way workers yesterday swung its support to Ancora. The unions represent 41.5% of Norfolk Southern’s workforce.
But, in response, the unions that represent the rest of NS’s workers today affirmed their support for CEO Alan Shaw and his management team.
The BLET’s general chairmen on Norfolk Southern in February firmly backed the railroad’s current management team. And they were highly critical of Ancora’s plans to gain control of the NS board and appoint former UPS executive Jim Barber Jr. as CEO and former CSX operations boss Jamie Boychuk as chief operating officer.
But BLET National President Edward Hall said today that after careful review the union has determined that management change was in the best interest of the union’s members and the railroad.
“BLET’s three elected General Chairmen representing locomotive engineers and trainmen at Norfolk Southern met with Ancora’s leadership team yesterday and determined that they are the right leaders for Norfolk Southern moving forward,” Hall said in a statement. “After the railroad’s CEO Alan Shaw hired COO John Orr and following the public comments of both those executives on their strategy for NS, our General Chairmen determined that a change at the top is needed. Although this decision was not easy, the General Chairmen believe it is necessary.”
Barber and Boychuk, who both began their careers as union members, welcomed the support of the NS labor leaders.
“It’s a privilege to receive support from the BLET Teamsters, who believe in our plan to improve performance, safety and employee relations at Norfolk Southern. Jamie Boychuk and I had an extremely productive conversation with the Brotherhood about the issues the railroad faces today under current management. We look forward to the opportunity to collaborate with the BLET Teamsters to build a more efficient, safer and sustainable railroad,” Barber said in a statement.
“Jim and I have deep respect for unions, having both spent a significant portion of our careers as union members – Jim at UPS and me at Canadian National Railway,” Boychuk said in a statement. “We recognize the hard work that the BLET Teamsters members and all of the Company’s employees put in every day, and we’re excited about the opportunity to work alongside them to move Norfolk Southern forward.”
Norfolk Southern initially had won the united backing of organized labor, who feared job losses under Ancora’s plan to cut costs in order to improve the railroad’s operating ratio. But Ancora has said it would rely on attrition — not furloughs — to reach its financial targets.
“Together with our unions, we have made significant progress to create a safer, more productive railroad. In fact, unions representing the majority of our craft workers have publicly supported our strategy and raised concerns about the dangers of Ancora’s plan,” NS said in a statement. “We remain focused on responsibly improving our operational performance, employees’ quality of life and working environment. In contrast, Ancora is misleading shareholders and employees with false promises that will destroy shareholder value, and where the mathematical reality proves it would require thousands of furloughs and cause irreparable damage to safety and service at Norfolk Southern.”
The proxy contest is headed toward a May 9 shareholder vote at the railroad’s annual meeting.
Note: Updated at 11:25 a.m. with information that other NS unions are backing current management.
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