Current:Home > NewsNorfolk Southern shareholders to decide Thursday whether to back investors who want to fire the CEO-InfoLens
Norfolk Southern shareholders to decide Thursday whether to back investors who want to fire the CEO
View Date:2024-12-23 19:00:35
LAYDOWN TO MOVE OVERNIGHT AHEAD OF NORFOLK SOUTHERN’S THURSDAY MORNING ANNUAL MEETING THAT IS SCHEDULED TO BEGIN AT 8:30A.M. EASTERN THURSDAY
Norfolk Southern shareholders will decide Thursday morning whether to back an activist investor’s bid to take over the railroad’s board and replace management.
Ancora Holdings picked up significant support during the campaign from major investors like EdgePoint Investment Group, two major rail unions and some customers. But the rest of rail labor, several key regulators and a number of other customers backed management.
If all seven of Ancora’s nominees are elected, that would give them the votes they need to move forward with their plan to fire the CEO and overhaul the railroad’s operations. If shareholders only support some of their board candidates, then Ancora won’t be able to make sweeping changes right away.
The railroad and Ancora disagree over whether CEO Alan Shaw ’s strategy of keeping more workers on hand during a downturn to be ready to handle the eventual rebound is the best way to run Norfolk Southern and whether he is the best man to lead the railroad.
Ancora’s CEO candidate, Jim Barber, who was formerly UPS’ chief operating officer, has said keeping more workers on hand during slower times is wasteful. That’s why Ancora wants to implement the industry standard Precision Scheduled Railroading that is designed to minimize the number of workers, locomotives and railcars a railroad needs.
Ancora’s plan would rely on running fewer, longer trains on a tighter schedule and switching cars between trains less often to streamline operations. Shaw argued that running the railroad too lean would jeopardize the improvements in safety and service Norfolk Southern has seen since its disastrous February 2023 derailment in East Palestine, Ohio.
Rail unions have said they believe Precision Scheduled Railroading has made the industry more dangerous and derailments more likely because inspections are so rushed and preventative maintenance may be neglected.
If Ancora succeeds in getting all seven of its nominees elected, it will have the power to fire Shaw and his new Chief Operating Officer John Orr that he just hired in March after paying another railroad $25 million to get permission to hire him. Ancora wants to install Barber as CEO and hire former CSX railroad operations chief Jaimie Boychuk to be Norfolk Southern’s Chief Operating Officer to overhaul the way the railroad schedules and operates its trains.
Ancora has projected that it will be able to cut more than $800 million in expenses in the first year and another $275 million by the end of three years. The investors say they don’t plan layoffs, but want to use attrition to eliminate about 1,500 jobs over time.
Norfolk Southern has said it’s own plan to make the railroad more efficient would generate about $400 million in cost savings over two years and improve its profit margin. Although analysts have questioned whether Norfolk Southern will be able to catch up to the other major freight railroads, which are all working to get more efficient too.
If Ancora doesn’t get all of its directors elected, the investors won’t be able to make sweeping changes immediately, but they will likely be able to put more pressure on Shaw to deliver results.
veryGood! (18428)
Related
- Will Trump’s hush money conviction stand? A judge will rule on the president-elect’s immunity claim
- Sha'Carri Richardson wins gold in Paris, but her Olympics story remains a mystery
- Beyoncé's BeyGood charity commits $500K to Black cowboys at annual Bill Picket Rodeo
- Horoscopes Today, August 9, 2024
- Tech consultant testifies that ‘bad joke’ led to deadly clash with Cash App founder Bob Lee
- Channing Tatum Shares How Fiancée Zoë Kravitz Has Influenced Him
- If Noah Lyles doesn't run in 4x100m relay, who will compete for Team USA?
- Three things that went wrong for US men's 4x100 relay team
- Keke Palmer Says Ryan Murphy “Ripped” Into Her Over Scream Queens Schedule
- Breaking at Olympics live updates: Schedule, how to watch, how it works
Ranking
- Ariana Grande Shares Dad's Emotional Reaction to Using His Last Name in Wicked Credits
- Flight with players, members of Carolina Panthers comes off runway at Charlotte airport
- USA men's volleyball rebounds from 'devastating' loss to defeat Italy for bronze medal
- State of emergency in NY as Debby pummels Northeast with rain: Updates
- Disruptions to Amtrak service continue after fire near tracks in New York City
- The last known intact US slave ship is too ‘broken’ and should stay underwater, a report recommends
- Helen Maroulis becomes most decorated US female wrestler after winning bronze medal
- Olivia Reeves wins USA's first gold in weightlifting in 24 years
Recommendation
-
New Mexico secretary of state says she’s experiencing harassment after the election
-
Blake Lively Speaks Out About Taylor Swift's Terrifying Concert Threats
-
Lawsuit accusing T.I., Tiny Harris of assault dismissed by judge
-
Brooke Raboutou earns historic climbing medal for Team USA in communal sport at Olympics
-
Suspected shooter and four others are found dead in three Kansas homes, police say
-
Murder case dismissed against man charged in death of Detroit synagogue leader
-
CrossFit Athlete Lazar Dukic Dies at 28 During Swimming Competition
-
A Roller Coaster Through Time: Revisiting Bitcoin's Volatile History with Neptune Trade X Trading Center4