Eleven rail labor groups maintain their support for Norfolk Southern management

WASHINGTON — Well, you can bet there will be interesting discussions going on in Norfolk Southern locomotive cabs today.

Just hours after the Brotherhood of Locomotive Engineers and Trainmen reversed course and said it would back activist investor Ancora Holdings in its bid to oust Norfolk Southern management, the SMART-TD union that represents conductors said it continues to stand by NS CEO Alan Shaw.

And minutes after the conductors’ union issued its statement, the other 10 labor unions that represent NS workers chimed in and affirmed their support for current management.

But the proxy contest has created a split in the ranks. The BLET and Brotherhood of Maintenance of Way Employes, which announced its support for Ancora yesterday, represent 41.5% of Norfolk Southern’s unionized workforce, according to NS employment data. The other 11 unions represent 58.5% of the railroad’s craft workers, including conductors, shop workers, dispatchers, signal workers, clerks, and yardmasters.

“In our view, Ancora’s business plan to reduce Norfolk Southern’s operating ratio while improving safety and service is not only unrealistic but runs contrary to their stated intent,” the 11 unions said in a statement. “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. We further believe that Ancora’s plans for increasing profits are nothing more than short-term cost-cutting to artificially lower the operating ratio – all at the expense of its customers, long-term investors and ultimately the U.S. economy. For these reasons alone, we believe that Ancora’s proposed strategy is not ‘fit for purpose,’ and we therefore urge shareholders not to support the Ancora director nominees.”

Ancora has proposed a majority slate for the board of directors and wants to name former UPS executive Jim Barber Jr. as CEO and former CSX operations boss Jamie Boychuk as chief operating officer. They would implement a full-blown implementation of the low-cost Precision Scheduled Railroading operating model and ultimately target a 57% operating ratio.

Shaw advocates an operational resilience strategy that balances service, productivity, and growth with safety at its core. The railroad relies on a Precision Scheduled Railroading operating plan, Shaw says, and aims for a sub-60% operating ratio. But Shaw’s plan would take a year longer to reach its operating ratio goals.

The SMART-TD union — the largest on NS — praised Shaw and his strategy.

“CEO Alan Shaw and his management team have focused on creating a resilient carrier. They have made a conscious effort to diverge from the operating ratio-obsessed mentality that has degraded rail service and safety since 2017, and have made safety, employees, and customers their priority,” the union said in a statement.

“The recent announcements by the BMWED and BLET unions that they are willing to roll the dice with a group wanting to re-implement an operating mode that contributed to a national supply-chain crisis and puts safety and employee well-being at risk is puzzling,” SMART-TD said.

The unions backing NS include the International Association of Machinists and Aerospace Workers Rail Division; Transportation Communications Union; Brotherhood of Railway Carmen; International Brotherhood of Boilermakers; Brotherhood of Railway Signalmen; American Train Dispatchers Association; SMART-TD; SMART-Mechanical Mechanical; National Conference of Firemen & Oilers; and the Transport Workers Union.

The proxy contest is headed toward a May 9 shareholder vote at the railroad’s annual meeting.