INDEPENDENCE, Ohio — The Brotherhood of Locomotive Engineers and Trainmen is now backing activist investor Ancora Holdings and its call for management change at Norfolk Southern.
The union’s decision, announced today, is the second in as many days: The union representing maintenance of way workers yesterday swung its support to Ancora. The unions represent 41.5% of Norfolk Southern’s workforce.
But, in response, the unions that represent the rest of NS’s workers today affirmed their support for CEO Alan Shaw and his management team.
The BLET’s general chairmen on Norfolk Southern in February firmly backed the railroad’s current management team. And they were highly critical of Ancora’s plans to gain control of the NS board and appoint former UPS executive Jim Barber Jr. as CEO and former CSX operations boss Jamie Boychuk as chief operating officer.
But BLET National President Edward Hall said today that after careful review the union has determined that management change was in the best interest of the union’s members and the railroad.
“BLET’s three elected General Chairmen representing locomotive engineers and trainmen at Norfolk Southern met with Ancora’s leadership team yesterday and determined that they are the right leaders for Norfolk Southern moving forward,” Hall said in a statement. “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 Chairmen determined that a change at the top is needed. Although this decision was not easy, the General Chairmen believe it is necessary.”
Barber and Boychuk, who both began their careers as union members, welcomed the support of the NS labor leaders.
“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. Jamie Boychuk and I had an extremely productive conversation with the Brotherhood about the issues the railroad faces today under current management. We look forward to the opportunity to collaborate with the BLET Teamsters to build a more efficient, safer and sustainable railroad,” Barber said in a statement.
“Jim and I have deep respect for unions, having both spent a significant portion of our careers as union members – Jim at UPS and me at Canadian National Railway,” Boychuk said in a statement. “We recognize the hard work that the BLET Teamsters members and all of the Company’s employees put in every day, and we’re excited about the opportunity to work alongside them to move Norfolk Southern forward.”
Norfolk Southern initially had won the united backing of organized labor, who feared job losses under Ancora’s plan to cut costs in order to improve the railroad’s operating ratio. But Ancora has said it would rely on attrition — not furloughs — to reach its financial targets.
“Together with our unions, we have made significant progress to create a safer, more productive railroad. In fact, unions representing the majority of our craft workers have publicly supported our strategy and raised concerns about the dangers of Ancora’s plan,” NS said in a statement. “We remain focused on responsibly improving our operational performance, employees’ quality of life and working environment. In contrast, Ancora is misleading shareholders and employees with false promises that will destroy shareholder value, and where the mathematical reality proves it would require thousands of furloughs and cause irreparable damage to safety and service at Norfolk Southern.”
The proxy contest is headed toward a May 9 shareholder vote at the railroad’s annual meeting.
Note: Updated at 11:25 a.m. with information that other NS unions are backing current management.
Again, I ask what incentive do unions have to endorse a hedge fund promising to fire people if they win? The only answer that makes sense is money for the union bosses. Screw the workers they supposedly represent.
I smell a rat. There is money begging to be followed here.
I agree with Eric. I, too, smell a rat. I wonder what constituted the “careful review” between the BLET and Ancora this week. Sounds like a pile of crap.
Just look at CSX now, trying to recoup the losses caused by Hunter Harrison and crew. In a few years, NS will see how hard it is to try to get furloughed employees to return or to hire new ones even at 100%.
They do not have the wide open, level runs as they do in Canada.
Scheduling trains is virtually impossible on the steep and undulating trackage of the USA, and they found that out quickly.
Best of luck to our Brothers at NS and the current managers.
In my time working as a union truck driver I almost never voted the party line. I voted the way I thought was best, not what someone else wanted me to do. That’s why we were born with brains.
Is this the Union management or is it the rank and file that’s supporting this. Now retired but was a union member. Every time the contract was up and they went into negotiations, top union officials promised us the world. From the sidelines I told them it AINT gona happen. We are going to get so much (X) but you are shooting for the moon (Y). They told me I was crazy. Sure enough during my employment, ALL 8 contracts were very close to my estimate.
Think the UNION top brass are selling out the rank and file.
Maybe I’m cynical because I’ve lived in the Chicago metro area all my life and closely follow most similar issues in the local news. I’ve even been involved with business in the City of Chicago so my opinion here is skewed.
The two unions flip-flopping to support Ancora reeks of some kind of quid pro quo. Anyone, especially someone WITHIN the company has to have tunnel vision and blinders on not to see that Ancora admitted to stripping the company down to the studs. One doesn’t have to be Rhodes Scholar to know what that means. This absolutely makes no sense. Someone got well here.
What the H E Double Toothpick is wrong with these unions? Do they not understand what “Strip it to the studs…” means? Boychuk says he will eliminate over 700 engines, trim routes and humps and these guys don’t see that has to include jobs?
Ancora says that all job lost will be by attrition. To that I simply say B.S. Yeah they will be by attrition all right. You will be told you have to move to another location in order to keep your job and if you refuse, you will be laid off. Anyone with sufficient seniority: Gone! Oh yeah, the old heads who can retire or are close to it will keep their jobs and then get out as soon as possible. Just like what is happening with all the folks at CPkc who are now seeing the writing om the wall.
Your union leaders are not thinking about you. They are thinking about how few jobs they are prepared to lose and how much money they can make. And you guys at the bottom, too bad-so sad. You had protection of jobs with the current leadership. And when the downturn comes in traffic YOU WILL BE LAYED OFF WITH NO PROMISE OF BEING REHIRED. Under current leadership you will be kept busy irregardless, but Barber has already said he will cut excess trains and their crews due to seasonal downturns. Shows you what he knows. Anyone who knows anything knows that railroading is not reliably dependent on seasons and when they are, like grain to ports, they will just make the trains longer and DPU’s don’t require trainmen… I can already see them drooling over the idea of 20,000 ton trains with only 2 people running the show.
If I was NS, I would immediately do what your last president did when Hunter “the hunter” Harrison tried to take over. He sprung a poison pill plan on CP that would have immediately merged NS with CSX or UP, IIRC and that stopped CP dead in their tracks. Yep sale off the railroad in different regions and watch CSX, BNSF and UP pick up the slack, which CSX and UP would figure out how to do (BNSF doesn’t need to as they are privately owned by Berkshire Hathaway (and JB Hunt, lol) as a mechanism for sending a message to these “Death Star” type of investors who just want to enrich themselves in the short term at the expense of all the employees and long term shareholders. Why do you think they only have a five year plan…
As someone said the other day, “…better the devil you know than the one you don’t know! ” Talk is Cheap but it takes real money to buy Whiskey!
Totally agree with you Vincent.
Us stock holders have the final say and everyone that has stock as myself are voting against this madness from Ancora BS
Ancora has as much as promised to reduce manpower. They get two unions to back their bidding.
Workers are great. Workers are the heart and soul of America. Unions just plain suck.
Charles – for every one comment that questions your thoughts or positions on matters, be certain there are 75-100 that agree with you.
..,and just as many that don’t.
Here is one that does !!
This kind of reminds me of mergers of companies. They promise growth, no layoffs, and improved working conditions. I probably do not have to tell what happens after the majority of mergers occur. Very few mergers really make life better for the employees or customers.
Beware of wolves in sheep’s clothing.
Agreed. I can only hope BLET leaders are not foolish enough to believe the “promise” of attrition rather than furloughs. If that was the “carrot” causing the drastic change in support, I urge those three GC’s honorably be the first lined up at the barrell.
From the outside looking in it’s hard to imagine what would have caused the BLET and MOW Union to change their positions.
As a long time Union member i can’t believe the main reason to be that both Barber and Boychuk were once Union members. I’ve seen more than once where promoted members quickly forget where they came from.
And based on Boychuk’s record at CSX I’m definitely not convinced he’s a friend of labor.
Once again Ancora is lying. There is no way they can store that many locomotives and freight cars and reduce employment by their stated amount without firing union members. Actually, whether attrition or firing NS losing Ancora’s stated number of employees would devastate service.