Unions oppose Ancora takeover attempt at Norfolk Southern

The Brotherhood of Locomotive Engineers and Trainmen (BLET), which represents locomotive engineers employed at Norfolk Southern Railway, is raising concerns about activist investor Ancora Holdings Group LLC's effort to overhaul the Class I's board and executive leadership.

BLET officials said yesterday the union will "vigorously oppose" Ancora's attempt to remake NS's board and replace President and CEO Alan Shaw. The union's position may be the first time in its 161-year history that it has taken a side in a proxy battle at a Class I, BLET officials said in a press release.

BLET General Chairman Scott Bunten said the union is opposed to Ancora Holding's interest in bringing in board members and management that would enforce precision scheduled railroading (PSR) at NS.

"Simply put, precision scheduled railroading ... requires railroads to do more with less which equates to longer trains, deferred maintenance of track and equipment, shorter inspections of rolling stock and a reduction in staffing numbers leading to increased terminal dwell times and delays creating poor customer service," said Bunten, a union officer who represents members at NS.

Although Ancora has pointed to last year's NS train derailment in East Palestine, Ohio, as evidence of failure by Shaw and his team, union officials noted that Shaw had been on the job for only a few months when the derailment occurred.

"[W]e believe that the PSR model is directly linked to the East Palestine failure," said Jerry Sturdivant, another BLET general chairman at NS. "Since the derailment last year, NS’ CEO has risen to the occasion and, through his leadership, NS has become a safer, more efficient and customer focused company again."

Among the reforms on Shaw's watch: NS became the only Class I to participate in a pilot program using the Federal Railroad Administration's Close Call Reporting System, BLET officials said.

BLET isn't the only union to state its opposition to Ancora's intentions toward NS. On Feb. 22, the Brotherhood of Railroad Signalmen (BRS) announced its "grave concern" with Ancora's proposed strategy that centers on drastic cost-cutting to generate short-term profit.

"Under the current leadership, NS has embarked on a forward-looking journey, emphasizing safety, innovation and long-term sustainability over short-term gains," BRS officials said in a press release.

Last week, the Ancora-led investor group, which holds a large equity stake in NS, announced the nomination of eight independent candidates for election to the NS board. The group also announced two proposed new leaders at NS: former United Parcel Service Inc. executive Jim Barber Jr. as CEO and former CSX executive Jamie Boychuk as chief operating officer. Boychuk had experience implementing scheduled railroading practices at CSX.

NS has urged shareholders to reject Ancora's nominees, proposed a board refresh and nominated two new candidates — former Amtrak and Delta Air Lines CEO Richard Anderson and former U.S. Sen. Heidi Heitkamp — among its slate of 13 nominees for the 2024 annual shareholders meeting.

In comments made to Progressive Railroading, two members of the Surface Transportation Board — Chairman Martin Oberman and Robert Primus — have said that if Ancora succeeds in its proxy battle at NS, the activist investor's strategy would have a detrimental impact on the rail industry.