Labor Voices Support For N-S’s Shaw

By Jim Mathews / President & CEO

Add one more voice to those speaking out against an activist investor group trying to take over Norfolk Southern and oust CEO Alan Shaw – Transportation Trades Dept., AFL-CIO President Greg Regan.

“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 in an open letter to N-S shareholders. “The East Palestine derailment has cost Norfolk Southern and its shareholders $1.1 billion to date and that cost will likely increase.”

Just as your Association did on February 14, TTD’s Regan pointed to “meaningful steps” to improve safety in the wake of the East Palestine derailment which Norfolk Southern has taken “under Mr. Shaw’s leadership.”

Regan called out:

Reinstating joint management-labor safety committees to discuss and address safety concerns on a regular basis;
Appointing Atkins Nuclear Secured to conduct an independent safety review;
Working collaboratively with unions to improve safety through partnerships like the Signal Safety Collaboration initiative with the Brotherhood of Railroad Signalmen;
Reaching paid sick leave agreements with all the undersigned unions; and
Being the first Class I railroad to enter a Confidential Close Call Reporting System (C3RS) pilot program with the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the International Association of Sheet Metal, Air, Rail and Transportation Workers-Transportation Division (SMART-TD).

TTD’s president told shareholders “We urge you not to replace Mr. Shaw with Ancora’s proposed candidate, as it will have lasting deleterious effects on the safety and service of NS, and the railroad industry as a whole.”

Ever since the hedge fund and its allies amassed their $1 billion stake last month, Shaw has enjoyed unusually vocal public support for his efforts to make the railroad simultaneously more responsive and safer following some high-profile incidents.

Federal Railroad Administrator Amit Bose wrote Shaw to “commend your commitment to investing in safety as those investments are imperative for continuing the unique progress your railroad has made.”

Surface Transportation Board Chair Marty Oberman also cautioned that replacing Shaw would potentially signal a return to the “cut, cut, cut” ethos that predominates in the precision-scheduled railroading (PSR) business model.

We here at the Association last month offered our own support message. Our worry then was, and remains, that if Ancora manages to oust Alan Shaw from his perch as CEO of Norfolk Southern, we may lose momentum on positive change across a whole lot of areas we – and I hope you – care about, things like grade-crossing elimination, working more cooperatively on new passenger rail service, working to make trains run on time, and doing the right thing for the residents of East Palestine, Ohio.

Meanwhile, Ancora yesterday filed materials with the Securities and Exchange Commission making the case that the group is wholly motivated by safety concerns and pledging that if their leadership slate is elected they would launch a series of root-cause safety reviews within the company, commit to ensuring two-person train crews, and prioritize “safety and risk management.”

You can read Ancora’s SEC materials by clicking here.