Key Regulators Express Support For Norfolk Southern's Leadership And Strategy, And Concerns With Ancora's Plan; U.S. DoT And STB Recognize The Importance Of Co's Safety-Driven And Service-Oriented Culture; Warn Ancora's Plan Would Put Safety And Service At Substantial Risk

Author: Benzinga Newsdesk | May 06, 2024 01:05pm

U.S. Department of Transportation and Surface Transportation Board recognize the importance of Norfolk Southern's safety-driven and service-oriented culture

Warn Ancora's plan would put safety and service at substantial risk

ATLANTA, May 6, 2024 /PRNewswire/ -- Norfolk Southern Corporation (NYSE: NSC) Monday shared statements from the U.S. Department of Transportation (DOT) and the Surface Transportation Board (STB) expressing support for Norfolk Southern's leadership and strategy in driving improvements across safety, performance, and service.[1]

In a May 3rd letter from the DOT to President and Chief Executive Officer Alan Shaw, Allison Dane Camden, Principal Deputy Assistant Secretary for Multimodal Freight Infrastructure and Policy, stated: "Norfolk Southern's progress toward meeting key safety performance indicators is encouraging and demonstrates your leadership and the commitment of all of NS's hard-working employees. We recognize the progress NS has made to-date towards attaining your own safety goals, as well as the goals we set for all Class I railroads..."

The DOT letter additionally acknowledged Norfolk Southern's progress to enhance reliable service for its customers: "DOT is encouraged by Norfolk Southern's efforts to improve the timeliness and fluidity of its network, particularly for time-sensitive goods. Your efforts align with the goals of the National Multimodal Freight Policy, including improving the reliability of freight transportation and reducing the adverse environmental impacts of freight movement."

Similarly, Martin Oberman, STB Chairman, decried Ancora's "viciously" waged attack on Norfolk Southern in a speech at the North American Rail Shippers 2024 Annual Meeting on May 1st. In his remarks, Oberman stated: "it is my responsibility to call out serious threats to the national rail network, and everything about Ancora's campaign should cause serious concerns to all rail stakeholders."

Further highlights of Oberman's speech include:

• "I have read almost everything Ancora has said about its plans for NS. I find almost nothing in their plans about how they will obtain better service or actually grow their number of carloads."
• "The STB's oversight…has been to require the railroads to report on their progress in rebuilding their workforces and their service recovery plans. And no one has made more progress in building a resilient railroad than NS, so that it will be able to handle the growth in traffic as the economy returns, which is inevitable in the foreseeable future..."
• "To me, the best predictor of what a person will do in the future is what he has done in the past. So I think the fear of an Ancora takeover of the entire or even a majority of the NS board and the installation of Mr. Boychuk to take NS down to its studs is real. At a minimum, based on actual history with Mr. Boychuk's approach, we at the STB and the industry at large would be foolish to assume there's nothing to worry about."
• "[Ancora's plan] would leave the railroad with just over 13,000 employees, a level below its worst service performance in recent years. A level which would likely be catastrophic for our economy and all the stakeholders—including other railroads—who depend on NS."

The clear support from regulators – in addition to an outpouring of support from our customers, unions and other key stakeholders – underscores the fact that Norfolk Southern has dramatically improved network performance, safety, and service. Ancora blatantly ignores these clear gains and wants to install a slate of directors with little to no safety experience, a CEO with no credibility with rail regulators, and a COO with a reputation for extreme cost-cutting measures and safety deterioration. This would unnecessarily risk unwinding the improvements Norfolk Southern has made and sparking further regulatory backlash to the detriment of shareholder value.

Posted In: NSC