Alan Shaw, CEO, Norfolk Southern
Scott Mlyn | CNBC
A second Norfolk Southern union said Friday it would back activist Ancora’s efforts to elect seven directors and oust CEO Alan Shaw, a sign of labor dissatisfaction with management and a key endorsement for Ancora as Norfolk Southern’s shareholder meeting nears.
The BLET Teamsters, which represents the engineers and trainsmen who operate Norfolk Southern’s locomotives, said Friday they’re throwing their weight behind Ancora.
“After the railroad’s CEO Alan Shaw hired COO John Orr and following the public comments of both those executives on their strategy for NS, our General Chairman determined that a change at the top is needed,” BLET president Edward Hall said.
Union support is unusual for an activist railroad campaign. The BLET Teamsters initially said they would vote their shares with management in February, but decided to back the plan for leadership change following outreach and meetings from CEO pick Jim Barber and Ancora’s COO nominee Jamie Boychuk.
“It’s a privilege to receive support from the BLET Teamsters, who believe in our plan to improve performance, safety and employee relations at Norfolk Southern,” Barber said.
The latest endorsement, coupled with the support of the BMWED Teamsters earlier this week, means roughly half of NSC’s unionized employees are supporting the activist, Ancora said.
“We recognize the hard work that the BLET Teamsters members and all of the Company’s employees put in every day,” Boychuk said.
The BMWED Teamsters also initially came out against the activist’s plan in February, before deciding to back Ancora.
Norfolk Southern said in a Friday statement that “a majority of our craft workers have publicly supported our strategy,” and that Ancora was “misleading shareholders and employees with false promises that will destroy shareholder value.”
Labor support is key in shareholder vote
People wait in line at the Norfolk Southern Assistance Center to collect a $1000 check and get reimbursed for expenses while they were evacuated following a train derailment prompting health concerns on February 17, 2023 in East Palenstine, Ohio.
Michael Swensen | Getty Images
Norfolk Southern and Ancora are fighting to win support from the railroad’s shareholders ahead of a May 9 annual meeting. Ancora has nominated seven directors and has argued that the railroad needs to focus on more traditional precision-scheduled railroading principles.
Norfolk Southern, along with some union leaders, regulators, and customers, has said Ancora’s approach to PSR would be damaging to the railroad. But the railroad also appointed a COO, John Orr, who has experience implementing PSR. The mix of a “resiliency” model, where the railroad would keep trains and staff on standby, paired with a PSR model, where the priority is to keep trains and crews moving, has drawn criticism from Ancora.
A devastating 2023 derailment in East Palestine, Ohio has loomed over NSC’s moves and Ancora’s ambitions.
Regulators have praised Norfolk Southern’s response to the crisis, and the company says that Ancora’s plan would lead to furloughs and damage their relationships with regulators. The company announced a $600 million settlement around the derailment earlier this year, and has said that maintaining a safety-oriented culture is a top priority.