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 that 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 unprecedented 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 from and meetings with CEO pick Jim Barber and Ancora’s chief operating officer 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 announced on Thursday, means that roughly half of the unionized employees at Norfolk Southern 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.
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
After news of Ancora’s union support broke, a coalition of nearly a dozen unions on Friday reiterated their support for Norfolk Southern management.
“Railway labor unions, shippers and federal regulators have all warned that Ancora’s plans will jeopardize the safety and service improvements that Norfolk Southern has made since the 2023 derailment in East Palestine, Ohio,” the unions said in a statement.
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, or PSR, principles.
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 Norfolk Southern’s moves and Ancora’s ambitions.
Regulators have praised Norfolk Southern’s response to the crisis, and the company said 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.
