ANCORA Holdings, an Ohio-based investor group, has launched a formal bid to take over Norfolk Southern (NS), which says is now the worst-performing of the US Class 1 freight railways.<\/p>\n
According to Ancora, NS is \u201cissue-plagued\u201d and its response to the East Palestine<\/a> derailment on February 3 2023 is a microcosm of the company\u2019s \u201cfailed strategy, insufficient accountability and lack of oversight of poor leadership.\u201d<\/p>\n The group recently acquired an equity stake in NS worth over $US 1bn. It is now proposing eight new independent directors who would appoint \u201cas expeditiously as possible\u201d a new CEO to replace Mr Alan Shaw at the head of NS, as well as a new chief operating officer (COO).<\/p>\n Ancora is proposing former United Parcel Service (UPS) COO, Mr James Barber, as the new CEO and Mr Jamie Boychuk as COO. Boychuk was executive vice-president, operations, at fellow Class 1 CSX until August 4 2023.<\/p>\n According to Ancora, both Barber and Boychuck are \u201cproven leaders with operational and railroad industry expertise necessary to move NS forward.\u201d<\/p>\n The investor group says that since Shaw became NS CEO in May 2022, the company\u2019s position at the bottom of the Class 1 table has been solidified by leadership delivering \u201cindustry-worst operating results\u201d and sustained share price underperformance, as well as a \u201ctone-deaf response\u201d to the East Palestine.<\/p>\n Ancora points to the NS operating ratio – the proportion of income that goes to meet expenses – that was the worst amongst the Class 1s in 2023, standing at 67.4% compared with the average of 61.1% and 59.6% at CSX.<\/p>\n The total shareholder returns delivered by NS are 10.9% lower than the Class 1 median and 18% lower than CSX, according to Ancora.<\/p>\n \u201cThe bottom line is that it is time to actually move NS forward,\u201d according to Ancora. It says that its director candidates and proposed senior management team have the experience and strategy required to turn the company into \u201ca safer, more sustainable railroad that is growing profitably while also yielding more stability for customers and employees.\u201d<\/p>\n NS response<\/p>\n In response, NS says that its board will continue its review of Ancora\u2019s proposed board candidates, and will present its formal recommendation in the company\u2019s definitive proxy statement that will be filed with the Securities and Exchange Commission and sent to all shareholders eligible to vote at the company\u2019s 2024 annual meeting. The date of this meeting has not yet been announced.<\/p>\n \u201cBoard refreshment is integral to effective corporate governance, and we seek to ensure that our directors have the appropriate skills and experience to oversee our strategy and its execution,\u201d NS says.<\/p>\n \u201cThe board continues to oversee management\u2019s successful execution of our strategy to balance safe and reliable service, continuous productivity improvement, and the pursuit of smart, sustainable growth.\u201d<\/p>\n NS says that it has dramatically improved its safety metrics and product offering in each of the past two years, delivering record annual revenue in 2022. Volumes of intermodal traffic, \u201cour most service-sensitive business,\u201d grew by 5% year-on-year in the third quarter of 2024.<\/p>\n \u201cWhile there is more work to do to recover from the short-term impacts to margins, customers are seeing our progress,\u201d NS says. \u201cThey recognise our commitment to delivering consistent, reliable service and are awarding us new business.\u201d<\/p>\n \u201cWe are proud of our response in East Palestine and the relationships we\u2019ve built throughout the community,\u201d the company says. \u201cNorfolk Southern is making it right, delivering on our promises to fully and safely remediate the site and ensuring East Palestine and the surrounding communities thrive for the long-term.\u201d<\/p>\n NS says that it is continuing to implement its six-point safety plan, installing digital train inspection portals, and incorporating feedback from union representatives. It also points to a \u201cdramatic\u201d 42% year-on-year reduction in its mainline accident rate in 2023.<\/p>\n The post Ancora launches takeover bid for Norfolk Southern<\/a> appeared first on International Railway Journal<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" ANCORA Holdings, an Ohio-based investor group, has launched a formal bid to take over Norfolk Southern (NS), which says is now the worst-performing of the […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[47,5],"tags":[],"class_list":["post-13992","post","type-post","status-publish","format-standard","hentry","category-rail-news","category-transport"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/13992","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13992"}],"version-history":[{"count":0,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/13992\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}