FRONT ROYAL, Va. — The Brotherhood of Railroad Signalmen has become the first rail labor union to come out against the activist investor group that’s plotting to oust Norfolk Southern CEO Alan Shaw and gain control of the railroad’s board.
The union today expressed “grave concern” with Ancora Holdings’ proxy battle. The union said Ancora would reduce employment at NS, “a move that poses a direct threat to the safety and well-being of both our workforce and the communities we serve.”
The union urged NS shareholders to consider the long-term ramifications of Ancora’s proposals.
“Under the current leadership, NS has embarked on a forward-looking journey, emphasizing safety, innovation, and long-term sustainability over short-term gains,” the union said. The approach has improved morale at the railroad, while the railroad’s signal safety efforts have fostered “a culture of trust and collaboration” between labor and management, the union said.
“Ancora’s proposed strategy, centered on drastic cost-cutting and prioritizing short-term profits, threatens to undermine these achievements,” the union said.
Ancora on Tuesday unveiled its slate of board candidates and proposed naming former UPS executive Jim Barber Jr. as chief executive and former CSX executive Jamie Boychuk as chief operating officer.
Ancora says management change would improve safety at Norfolk Southern. The railroad’s safety record has been under scrutiny since the Feb. 3, 2023, hazardous chemicals derailment in East Palestine, Ohio.
Ed Fieldings comment made me recall the scenario of hiring EHH. The huge “penality” pay to get him released to gain employment status. Good grief, if the guy is good, can he walk on water? Apparently they thought so even though he had failing health. No doubt, the man was a through and through RR man. Having said that, no disrespect to EHH, rather the choices made by those hiring. endmrw0224241729
As a share holder and former employee (1965-1978, Southern) I will vote NO, would prefer H— No on this scheme. The result, as usual, will be a short term increase in dividends, stock value, etc. followed by a big fall. I agree that the reason Boychuk left CSX needs scrutiny. Remember that another former CSX executive did not last long at NS either.
I’m voting no. Please join me.
I don’t have a lot of shares, but if we’re all together….
NS directors and stock holders need to quash the demands and continue on with the current management. If not they risk the wrath of the STB. Already the STB chairman has come out against this move by the cheap investor. NS still has a great deal of expense coming continuing their welcome investment in safety and running a railroad that is working toward better service. And, its chief has gotten popular with employees which will go a long way to better service.
The last thing anyone needs is more PSR.
If railroads are to prosper they need to look at long term goals to improve service and gain traffic. Hedge funds are only interested in maximizing return to shareholders. You only need to look at today’s CSX. They are improving service and just raised their dividend. However hedge funds would not be satisfied with their slow but steady improvement. I hope Norfolk Southern stockholders don’t fall for changes the hedge fund want to make.
Keep in mind that CSX fought an expensive battle with an “activist investment fund” back in the 1990’s. CSX ultimately won. But, it cost them a ton of cash.
The former rr people on the list were/are EHH clones! How much did EHH try to steal from CSX stockholders! As Paul stated about Boychuk and a certain former KCS “PSR” VP who left KCS suddenly, examine each thoroughly! Notice a 3rd one supposedly “founded” the MidSouth! His efforts were non-performing to say the least!
Hedge fund “invasions” are a death knell to Railroads. Paul and Anthony have said it well. For long long term operations of RRs there has to be expenditures that ruin the “game” hedge funds play. RR’s are different than most industries. Rush to get quarterly dividends higher hurt RR’s CEOs. Endmrw0223240908
Death knell to any business they touch. Look at what happened to Chrysler.
Buried in their agenda is probably renewed demand for a rock-bottom operating ratio regardless of its historic destruction of service, employee relations, morale and on long term growth and prosperity.
I have yet to see in my lifetime a hedge fund get control of a business and that business ends up better than before the takeover. They usually end up a shell of their former selves, if they survive.
Look at what’s left of the company formerly known as Chrysler.
The People of East Palestine under Hedge Fund management would be dealing with lawyers instead of having a clean up. Clean up cost money, lawyers are a dine a dozen (just ask tfg).
Let’s hope all the rail unions at NS take a strong stand against this attempted pillaging.
Go to the 2024 02 22 article at Business Wire about this takeover and read the bio for the proposed COO, former CSXer Jamie Boychuk. Be sure not to miss point number one: “Previously served as Executive Vice President of Operations at CSX, where he led a variety of operational initiatives during a period in which the railroad improved performance across all operating metrics *and unlocked significant value for shareholders*” (My emphasis) The last six words say it all, NS. Short term gain, long term what? Departure, leaving a smoldering hulk?
The NS board may also want to determine and publicly address why Mr. Boychuk abruptly left CSX last summer. It’s a question that needs to be addressed.
Here we go again, a la Hunter Harrison’s slash and burn PSR tactics.