From the editor: Of soundbites and safety

By Pat Foran, Editor-in-Chief

Last month, an Ancora Holdings Group LLC-led investor group launched a proxy fight to overhaul Norfolk Southern Corp.’s board and replace NS President and CEO Alan Shaw. Our coverage of this evolving story continues on ProgressiveRailroading.com.

I’ve been following the story’s safety elements — in particular, the language used.

On Feb. 20, Ancora nominated eight independent candidates for election to NS’ board, citing poor decisions made regarding the company’s leadership, safety priorities and strategy. Under Shaw, NS has delivered “industry-worst operating results, sustained share price under performance and a tone-deaf response” to last year’s derailment in East Palestine, the investor group claimed.

In a letter that same day to NS employees, Shaw wrote that Ancora’s challenge would not change NS’ current objectives, that the railroad was “fully committed” to implementing the strategy it deployed in December 2022, as well as making the railroad safer.

On Feb. 21, Federal Railroad Administrator Amit Bose posted a letter on FRA’s website that advises NS to stay focused on safety. “I particularly commend your commitment to investing in safety, as those investments are imperative for continuing the unique progress your railroad has made; early data for 2023 suggest that NS was the only Class I to achieve significant reductions in the rate of mainline derailments this past year.”

Bose added: “While I recognize NS for the meaningful steps and results seen so far, often in notable contrast to industry peers, I want to emphasize the importance of a durable and lasting path forward that continues to prioritize safety. Any backsliding, as a result of a change in leadership or otherwise, on the safety-oriented path you have laid out and communicated to us will likely attract renewed oversight attention from my office ...”

In a Feb 22 press release, Ancora officials said they agreed with Bose’s statement about NS’ safety path and that they shared the FRA’s “backsliding” concerns.

After a week of back-and-forths on other proxy fight elements, Ancora officials asked NS’ board in a March 1 letter to “join the investor group in running a contest centered on facts, ideas and value creation plans.” Among their concerns, which included Shaw’s 2023 compensation: “Shareholders are concerned the board is pursuing a scorched-earth campaign that involves poisoning the well with key stakeholders of the railroad.”

A “contest” centered on facts, ideas and value creation? Of course. Shareholders have the right to question things like executive compensation, operating strategies, growth plans and safety priorities. And I expect rhetorical language in an election campaign, which Ancora-versus-the-NS-board is.

But when you open a campaign, as Ancora did, with an anything-but-fact-based phrase like “tone-deaf,” and then reiterate that very phrase in your call for an end to said scorched-earth campaigning (“your current CEO has presided over … a tone-deaf response to the preventable derailment in East Palestine”) — come on, man.

To reiterate a phrase I’ve written many times in this space: Rail safety shouldn’t be politicized by any link in the chain. If safety truly is the top priority — of this contest or for rail stakeholders, everywhere — check the safety rhetoric at the door and make sure safety is truly your top one before calling out others on theirs.