Eastern Railroad Discussion > NS's BMWED Teamsters endorse Ancora bid

The maintenance of way union endorses the insurgent bid, [several] other unions have supported  Mr Shaw and incumbent management

CNBC:

Activist Ancora on Thursday won the support of the BMWED Teamsters in the investor’s efforts to oust Norfolk SouthernCEO Alan Shaw and a majority of the railroad’s 13-person board.The labor group said it would back the activist’s seven director nominees over Norfolk Southern management, a significant endorsement in an industry unusually dependent on union support.

https://www.cnbc.com/2024/04/25/norfolk-southern-nsc-ancora-wins-teamster-union-support.html


 



Edited 1 time(s). Last edit at 04/26/24 06:50 by Lackawanna484.

Wonder how much they paid them.

When I was still working, if money got tight or the company got stingy, MOW was one of the first crafts to get layed off. Their members just got sold out. Union big wigs want miss their pay check. Would guess the members had no say. Things may have changed, but I doubt it.
Time will tell how deep their craft gets layed off.
Steve
 

I know several of there covered employees. But i hope all of BMWED gets laid off and replaced with contractors. IDIOTS

And now NS' BLET is for Ancora as well......

The other half of the Teamsters Rail Conference, the BLE-T just followed suit.  Remember that Mr. Barber was from UPS which is represented by, wait for it.... The Teamsters.

The past week I have been thinking that the current NS management would prevail, but I am having my doubts again.

Speaking on Bloomberg today, Ancora officials said NS CEO Shaw isn't sufficiently ruthless to run the company.

That does not bode well for efforts to create a safer, and more worker friendly company.

https://www.bloomberg.com/news/articles/2024-04-26/activist-investors-seek-more-ruthless-norfolk-southern-ceo-post-crash

Posted from Android

This is like chickens endorsing Col Sanders 

One of many troubling parts of the  Ancora bid (and also of Mantle Ridge, Pershing, etc) is the failure to engage employees and shippers very early in the process.  That creates the potential for adversarial relationships with employees, shippers, etc   I'm sure both employees and shippers have an abundance of ideas on how better service can be achieved that doesn't involve cutting service and spilling blood.

Lackawanna484 Wrote:
-------------------------------------------------------
> One of many troubling parts of the  Ancora bid
> (and also of Mantle Ridge, Pershing, etc) is the
> failure to engage employees and shippers very
> early in the process.  That creates the potential
> for adversarial relationships with employees,
> shippers, etc   I'm sure both employees and
> shippers have an abundance of ideas on how better
> service can be achieved that doesn't involve
> cutting service and spilling blood.

Looks like to me that they are gunning for an adversarial relationship. Some union members need to be questioning their leadership.

not knowing anything of this issue per se but as you would expect, no mention on mainstream media trying to stir the pot of safety implicatons post E. Palestine on so caslled not ruthless enough CEO but I did see a quote from Ancora saying 

“What the company has done to ‘make it right’ in East Palestine is not enough,”Ancora’s presentation states. “Its failure to publicly address changes in its derailment response processes indicates that it is not prioritizing safety.”

 does new regime have safety in their minds, I cant imagine so......and is our fearless Mayor Pete gunna chime in on any safety concerns he may have.  Good luck NS souds like change is coming your way, and i guess some of these uniopn guys can kiss their jobs good bye......

Now that's one new one - insufficiently ruthless. Seriously? Ruthlessness by senior management is a criterion for measuring their success?

I couldn't read the article behind the paywall, but the term is used right in the headline, so it's fair game: Railroad CEO Isn't Ruthless Enough for Investors After Toxic Crash - Ancora Holdings is pushing for a new CEO at Norfolk Southern to boost efficiency, but Alan Shaw advocates a balanced approach.

What a pack of wolves to even make such a suggestion. Sorry, I'll go for a studied, mature, reasoned and balanced approach every time and ten times on Sunday. I hope these predators are unceremoniously shown the door - and that it hits them square in the a$$ on the way out. Unfortunately, due to the "fiduciary obligations" of the various pension, endowment and other funds invested in Ancora my bet is that Ancora will win. Gotta seek the highest gain, you see. After all it's our fiduciary obligation - even while we gut the company in the process. That's what wolves and other alpha predators do after all, isn't it?

Wolf-pack capitalism, the new mode of investing. "Ruthless" valued above reason. Heaven help us all.

MC

Later edit: I was finally able to get the registration process for Bloomberg to work, and read the article - before it was posted below while I was writing this edit. To be fair, the term "ruthless" was a Bloomberg editor's use in writing the headline - his or her take on the gist of the article. The article itself does not use the word, nor is Ancora quoted as using the word. But Ancora is cited for a hard-nosed approach to management and full-throat commitment to PSR, and Alan Shaw is cited as "a soft-touch marketing guy who’s overly deferential to workers and customers and unwilling to implement the operational changes necessary to compete in the notoriously cutthroat industry." So, a comparison to being "ruthless" is not entirely inappropriate.

I still regard Ancora and their investors and hand-picked alternate board as a pack of wolves. That qualifies as "ruthless" in my book. And I have zero issue with Alan Shaw's style of management and the goals of his approach to service, customers, employees and operations.

MC



Edited 1 time(s). Last edit at 04/26/24 11:12 by ironmtn.

Can anyone explain to me why the story behind "Boom Boom" Boychuk hasn't made it out in any of the stories regarding his safety qualifications?  It only seems to be circulating through a few message boards.  The stories are easy enought to find.Human error blamed in Prince George CN crashLittle environmental damage to river says provinceCBC News · Posted: Aug 07, 2007 11:28 AM EDT | Last Updated: August 7, 2007Social Sharing

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The train collision and subsequent fire in Prince George last weekend was caused by human error, says CN Rail.On Saturday two CN trains carrying fuel and lumber collided, setting their cargo ablaze along the Fraser River.CN spokeswoman Kelli Svendsen said that an "experienced manager" had allowed the slow-moving northbound and southbound trains to collide, sparking the huge fuel and lumber fire.Svendsen said the manager would be disciplined for the latest incident."There are procedures that employees have to follow when operating trains. When those procedures are not followed there are consequences, and the consequences are the same for all employees, management or union," said SvendsenThis latest accident happened one day after the rail company was slapped with five charges over the 2005 Cheakamus Canyon derailment that killed half a million fish.Ben Van Nostrand with B.C.'s Ministry of Environment said the environmental damage in Prince George could have been much worse, since little spilled fuel made it into the riverafter it caught fire and burned offin a huge plume of black smoke."Had that not caught on fire we would have had the diesel flowing directly into the Fraser River," said Van Nostrand, "We do have, of course, the air quality impacts, because of the fire."Health officials issued a voluntary evacuation order for people living nearby on Saturday. No one was hurt in the collision.Despite the most recent crash, and the charges laid on Friday for the Cheakamus Canyon derailment, CN maintains it has a good safety record. The company says it cut year-to-date main track accidents from 79 in 2005 to 63 this year.The Transportation Safety Board is still investigating the cause of the latest accident.

From the BMWED announcement:

"Following yesterday’s earnings call and a reasonably constructive meeting with a potential new leadership team,"

How does one bet the farm on "a reasonalbly constructive meeting"? Something smells.

For those who couldn't read it.Railroad CEO Isn’t Ruthless Enough for Investors After Toxic Crash
Ancora Holdings is pushing for a new CEO at Norfolk Southern to boost efficiency, but Alan Shaw advocates a balanced approach. 
By Brooke Sutherland and Kiel Porter
April 26, 2024 at 6:00 AM EDT
Updated on 
April 26, 2024 at 10:43 AM EDT
SaveNorfolk Southern Corp.’s chief executive officer was lambasted by politicians as the epitome of everything wrong with the profit-obsessed railroad industry when a derailment caused a toxic disaster in East Palestine, Ohio, last year.
Now, an activist investor is waging an increasingly personal battle to fire the CEO — but not because it wants the railroad to spend more on safety initiatives. Instead, Ancora Holdings Group is tagging him as a soft-touch marketing guy who’s overly deferential to workers and customers and unwilling to implement the operational changes necessary to compete in the notoriously cutthroat industry.
Alan Shaw is a lifer at Norfolk, starting out in the finance department in 1994. But he came into the CEO job in 2022 — less than a year before the Ohio disaster — with a message of change.
For more than a decade, the railroad industry has been governed by the gospel of the late executive Hunter Harrison: an efficiency strategy known as precision scheduled railroading that’s resulted in shrunken workforces and longer, more packed trains. Shaw argued railroads had become so focused on costs they had forgotten how to grow and were losing business to truckers — not to mention upsetting existing customers and employees.
Workers love his message, as do regulators and shippers frustrated with years of poor rail service. But Ancora is betting that investors don’t — Norfolk’s shares are down about 7% in the past two years, including a sharp sell-off after the derailment, badly trailing the almost 10% gain for the benchmark S&P Road & Rail index. The fund wants to replace Shaw with Jim Barber, a former United Parcel Service Inc. executive, and also install Jamie Boychuk, a protege of Harrison’s who helped oversee CSX Corp.’s adoption of PSR tactics. Both Barber and Boychuk are known as hard-nosed operators with little interest in warm and fuzzy ideas like company culture. Ancora, which owns less than 0.5% of Norfolk shares, is also seeking to replace most of the board. The proxy vote is May 9.
Activist investors have pervaded few industries as much as North American railroads. The method is pretty simple: Kick out the existing CEO and hire Harrison — or someone who worked for him — and then watch profit margins (and the stock price) soar. Bill Ackman’s Pershing Square Capital Management started the trend at Canadian Pacific Railway Ltd., and other funds copied him at CSX and Union Pacific Corp.
“The activist plan is that old playbook of 10 to 15 years ago, about just singular focus on cost cuts,” Shaw said in an interview at Bloomberg’s Boston office. “And we know that with that short-term playbook, shareholders lose.”
He’s committed to ending temporary worker furloughs when demand slumps and backed more generous paid sick leave. He's invested in locomotives, track improvements, warehousing facilities, rail yard infrastructure and technology. He spruced up worker facilities that had become dilapidated.
In the penny-pinching era, railroads “didn’t want to put money back into the infrastructure, including on-duty facilities,” said Jeremy Ferguson of the International Association of Sheet Metal, Air, Rail and Transportation Workers, Norfolk’s biggest union. But Shaw signed off on fresh paint jobs, new roofs and boiler systems for yard offices. “Safety and morale are improving every day by leaps and bounds,” Ferguson said. If there was a bit of extra slack in the system, so be it. At least some shareholders endorse Ancora’s proposed overhaul: EdgePoint Investment Group Inc., which owns Norfolk shares worth about $1 billion, and Neuberger Berman Group, which owns a much smaller stake of less than 0.1%, have both backed the activist slate.
The Brotherhood of Maintenance of Way Employes, a division of the Teamsters union, on Thursday backed Ancora’s push for change, criticizing current management for “non-committal hedging on reasonable, needed changes” that would prevent future rail accidents. The group had previously blasted Ancora as “predatory venture capitalists.” On Friday, another Teamsters affiliate, the Brotherhood of Locomotive Engineers and Trainmen, also announced it was switching its allegiance to Ancora, partly because of Norfolk’s hiring of Orr as COO. Combined, the two groups represent more than 40% of Norfolk’s unionized workforce.
The railroad’s other major unions have backed Norfolk's existing strategy, and with only a few weeks to go until the shareholder vote, Norfolk is holding firm on its support for Shaw in a sign the company thinks it can resist the activist push.
Shaw has acquiesced to making profitability metrics a more explicit part of executives’ compensation math and brought in a Harrison apprentice of his own, John Orr, as chief operating officer. The politicians who lambasted the railroad for prioritizing profits over people in the case of the Ohio derailment — including Transportation Secretary Pete Buttigieg, Ohio senators J.D. Vance and Sherrod Brown and Vermont Senator Bernie Sanders — have gone silent as Ancora pushes for change.
“Every other railroad has gone through what Norfolk is going through right now, which is someone who stepped up to say, ‘Hey guys, you need to start running a precision scheduled railroad,’” Boychuk, 46, said. “And that’s where we come along.”
Under Ancora’s plan, Boychuk would serve as No. 2 to the 63-year-old Barber. There’s “a natural succession plan built in between the two of them,” said James Chadwick, who oversees alternative investments at Cleveland-based Ancora. “It’s a hell of a team to start and they’ll benefit from each other greatly.”
That said, Boychuk’s tenure at CSX wasn’t all smooth sailing. Customers were so frustrated during the rollout of its PSR strategy that the Surface Transportation Board called a special listening session to allow them to air grievances.
Memories of the tumult still linger: 80% of shippers recently surveyed by analysts at Stephens Inc. said they would shift volume away from Norfolk if Ancora implements its strategy.
To Boychuk, criticisms of CSX aren't really about PSR itself but a rollout he now acknowledges was rushed. Still, CSX, has adopted some of Shaw’s gentler approach under new CEO Joe Hinrichs, a former Ford Motor Co. executive. This includes a pledge to stop chasing profits at the expense of growth and to rethink the use of furloughs. Boychuk left CSX last August, less than a year into Hinrichs’ tenure.
At its core, PSR aims to produce better results with less work. The thinking goes that less work, particularly around switching and handling trains, means fewer opportunities for injuries or delays. It’s essentially trickle-down economics but for trains: If they run efficiently, safety and service benefits will follow.
But when Shaw pitched his strategy to investors in late 2022, he laid out some striking math: furloughs would typically save Norfolk about $35 million annually during downturns, but when demand recovers, service disruptions from a slower-than-needed network can cost the railroad $40 million a quarter, before factoring in the expense of hiring and training new workers. That’s to say nothing of missed revenue because the company can’t meet customer demand and a longer-term loss of confidence that could drive shippers to choose trucks over rail.
“Every three or four years, rail offers a really lousy service product,” Shaw said. “We’re breaking that cycle.” Norfolk’s focus last year was on cleaning up the mess it made in East Palestine. The company acknowledges it needs to get more efficient but insists on doing this in a more balanced way.
“We’re going to get to the same place,” said Orr, Norfolk’s new chief operating officer. “But we’ll do it in a way that allows our customers to grow with us.”

southrail Wrote:
-------------------------------------------------------
> ....” On Friday, another Teamsters
> affiliate, the Brotherhood of Locomotive Engineers
> and Trainmen, also announced it was switching its
> allegiance to Ancora, partly because of
> Norfolk’s hiring of Orr as COO. Combined, the
> two groups represent more than 40% of Norfolk’s
> unionized workforce.

I'd stick with the "devil you know".

SMART-TD has come out supporting current leadership.

Makes you wonder what Ancora offered in return for Teamsters support.

southrail Wrote:
-------------------------------------------------------
> SMART-TD has come out supporting current
> leadership.
>
> Makes you wonder what Ancora offered in return for
> Teamsters support.

An on property agreement.

Such as?