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The Railroad Industry at a Crossroads: The Wall Street Influence and the Call for Workforce Preservation

Published: Feb 22 2024 3:33PM


Included here is a detailed synopsis drafted by the BMWED of the state of the freight railroad industry and the troubling trend of hostile takeovers and aggressive corporate restructurings that present undeniable risks. It is titled: “The Railroad industry at a Crossroads: The Wall Street Influence and the Call for Workforce Preservation.” We encourage you all to read it.


A year after Norfolk Southern derailed a toxic vinyl chloride train in East Palestine, Ohio, many freight railroad carriers remain addicted to the short term, lucrative cost-cutting measures at the behest of their shareholders. Such cuts gut essential workforce and safety measures that in tandem protect shipper interests and insure safe passage of trains through often unaware communities.


The current trend of aggressive corporate restructuring at several Class I freight carriers is predatory. This movement traces back to the influential Hunter Harrison, infamous for pioneering “Precision Schedule Railroading.” Harrison’s impact continues beyond his lifetime, sometimes with different monikers, but the detrimental results remain identical. For instance, last February, investment firm Soroban Capital Partners took a $1.6 BILLION stake in the freight carrier Union Pacific, forcing out Lance Fritz in favor of PSR champion Jim Vena, who leads a new team focusing on cutbacks.


Now, Ancora Holdings is actively targeting Norfolk Southern, preying on what they view as a ripe opportunity to pin shortcomings on CEO Alan Shaw to deepen their own pockets. A group which includes some very heavy hitters, including former Presidential candidate and Ohio Governor John Kasich, is attempting to utilize vulnerabilities to enrich themselves at the expense of employees, shippers, and the general public.


Today we will spotlight the rampant, rotting greed of these predatory venture capitalists, which are clearly prioritizing financial efficiency and short-term investment strategies at the neglect of maintaining a robust workforce and reliable infrastructure. The actions of Wall-Street investors are truly ruinous to the health and culture of the industry.


We must expose this devastating trend and mandate a reversal of this troubling course before it is too late.