Ancora lays out NS safety plan; TTD asks shareholders to reject ouster of CEO Shaw

Ancora Holdings Group LLC, the activist investor seeking to replace the majority of Norfolk Southern Corp.'s board as well as top management, yesterday issued a white paper on what it would do to change safety practices at the Class I.

The group, which holds a large equity stake in NS, said its slate of eight board candidates and proposed management team would implement several changes to the railroad’s safety culture, including ensuring two-person train crews on mainline trains.

The white paper was issued in part to highlight Ancora’s stated safety concerns at NS, especially in light of a March 2 incident near Bethlehem, Pennsylvania, in which three NS locomotives, box cars, double-stack intermodal container cars and tanker cars collided and derailed two locomotives and trailing consists.

The derailment resulted in no immediate physical injuries. However, diesel fuel and polypropylene-chemical plastic pellets spilled into the Lehigh River and along its banks. The National Transportation Safety Board is investigating the accident.

If elected, Ancora board nominees would prioritize policies that call for less congestion on the railroad’s network, ensure two-person crews and create a safety culture that would increase employee engagement, the white paper states.

To read the white paper, click here.

Meanwhile, Transportation Trades Department, AFL-CIO President Greg Regan today wrote to NS shareholders to express concerns about Ancora's interest in ousting NS President and CEO Alan Shaw and replacing him with executives who support the precision scheduled railroading operating method. Replacing Shaw would have "lasting deleterious effects on the safety and service of NS and the railroad industry as a whole," Regan wrote.

Regan said his letter was written on behalf of TTD and the unionized workers at NS.

"Ancora and other Wall Street analysts made misguided calls to replace Mr. Shaw because of a rise in Norfolk Southern’s operating ratio and a decrease in profits last year,"  Regan wrote, adding that recovery from the February 2023 NS train derailment in East Palestine, Ohio, has cost the Class I and its shareholders at least $1.1 billion.

"There have been more than 1,500 train accidents since East Palestine and the industry is averaging about 1,000 derailments a year. It is pure luck that the subsequent train derailments or accidents did not rise to the catastrophic levels of East Palestine," Regan wrote.

Regan credited Shaw for the "meaningful steps" toward improving safety that NS has taken since East Palestine.

To read Regan's letter, click here.