By Railfan & Railroad
After months of buildup, the battle for control of Norfolk Southern has arrived. On Thursday, NS shareholders will have their say during the railroad’s annual shareholder meeting.
On one side of the battle is CEO Alan Shaw, who is hoping to keep the job that he has held for just two years. On the other is Ancora Holdings, a major shareholder that is offering up its own board nominees and executive leadership team on the belief that they can squeeze more profit out of the Class I railroad. In the weeks leading up to the May 9 vote, shippers, unions, and regulators have all had their say about who they believe is best fit to lead the railroad.
At the core of Ancora’s critique of Shaw is that the CEO kept too many additional resources on hand during a traffic downturn and that he made missteps following last year’s fiery train wreck in East Palestine, Ohio. Ancora would like to bring in former UPS chief operating officer Jim Barber in as NS’ new CEO and former CSX executive Jamie Boychuk as the new chief operating officer. Ultimately the shareholders’ group wants NS to implement Precision Scheduled Railroading — a practice that is known to squeeze maximum profit out of railroads — at a more rapid pace.
Ancora’s attempt to oust Shaw began earlier this year and they have taken every opportunity to criticize him. In March, after a derailment in Pennsylvania, Ancora called for the CEO’s resignation.
Ancora has been able to line up some support for its bid, including from major shippers like steel producer Cleveland-Cliffs. It also got the support of two unions, the Brotherhood of Locomotive Engineers and Trainmen and the Brotherhood of Maintenance of Way Employees. But documents published by a competing union suggest that BLET is trying to get a better deal for its members by supporting new management.
For his part, Shaw said the railroad is getting back on track after the fallout from East Palestine and that shareholders should stay the course.
“The choice really couldn’t be any more clear for our shareholders,” Shaw told the Associated Press. “We make promises and we’ve continued to keep our promises, and we will continue to deliver. And we’ve got a long-term vision for Norfolk Southern where shareholders win, as opposed to the activists who’ve got a short-term and erratic approach where shareholders lose.”
Among Shaw’s defenders is retiring U.S. Surface Transportation Board Chair Martin Obermann, who has been heavily critical of the push to PSR.
“It’s not my position to urge shareholders how to vote in this election,” he said at a shipper’s conference last week. “It is my responsibility to call out serious threats to the national rail network.”
He went on to say that running a railroad with the bare minimum of people and equipment might work when “the sun is shining” but not when problems arise, as history has shown.
“We are now confronting a situation where one group is either completely ignorant of these recent past lessons or has willfully chosen to ignore them in an effort to make a quick buck,” he said.
The post NS v. Ancora: Proxy Battle For Control of Class I Arrives appeared first on Railfan & Railroad Magazine.
