Bose Writes Shaw, Making the Obvious Less Obscure

Amit Bose (left) and Alan Shaw

On Feb. 21, three days after Ancora Holdings announced its intention to replace a majority of the Norfolk Southern Board of Directors and the railroad’s chief executive and chief operating officers, Federal Railroad Administrator Amit Bose wrote a rather interestingly worded letter to Alan Shaw, with copies to Secretary of Transportation Pete Buttigieg and outgoing STB Chair Marty Oberman.

Here it is, verbatim:

“As we read recent reports of investor activism among some at Norfolk Southern, I write to reiterate the only avenue to ensure NS’s immediate and long-term success is through a relentless focus on safety.

“As the federal safety regulator, the Federal Railroad Administration’s primary mission is to ensure the safety of the railroad industry, communities where rail travels, and railroad workers.

“Last year, FRA published findings and recommendations resulting from our 60-day supplemental safety assessment of NS and communicated other concerns identified by FRA safety staff. You recently wrote to the Secretary detailing the progress NS has made under your leadership in response to some of those directives. This includes partnering with BLET, SMART-TD, and FRA to initiate a confidential close call reporting system (C3RS) pilot program for 1,000 NS workers, reaching agreements with your entire workforce on paid sick days, and undertaking a pilot with BRS, with technical support from FRA, to perform field visits to consider signal safety.

“As part of your commitment to not furloughing crews during economic downturns and the corresponding need to hire additional employees, you reported an increase in new conductor trainees. Ensuring that employees, especially those who are new and without prior experience, receive proper training is fundamental to safe operations. You have also instituted “Performance Standard Engagement,” which focuses on coaching and teaching NS workers, rather than a discipline-centric approach to enforcing rules compliance.

“The commitments you make in your letter are important and demonstrate the ability to make progress when railroads make safety a priority. I particularly commend your commitment to investing in safety as those investments are imperative for continuing the unique progress your railroad has made; early data for 2023 suggest that NS was the only Class I railroad to achieve significant reductions in the rate of main line derailments this past year (January to November 2023, most recent data available, compared to January to November 2022).

“But this work is not complete. We must do as much as possible to prevent incidents, injuries, and fatalities. Safety is an ever-evolving task, and, while FRA remains committed to our goal of improving rail safety, achieving improvements requires the commitment of industry, including its most senior leadership, and it will require follow-through on the many items cited above and more.

“While I recognize NS for the meaningful steps and results seen so far, often in notable contrast to industry peers, I want to emphasize the importance of a durable and lasting path forward that continues to prioritize safety. Any backsliding resulting from a change in leadership or otherwis, on the safety-oriented path you have laid out and communicated to us will likely attract renewed oversight attention from my office as we pursue our safety mission.”

Honestly, this is a bit, well, odd. What exactly is the purpose of Bose’s “The Pope is a Catholic” (a favored expression of my predecessor, the late Luther S. Miller) letter to Alan Shaw? And why would STB issue a press release about an FRA letter? Are FRA and STB siding with NS against Ancora? It appears that way, at first glance.

Conspiracy theorists can have a field day with this, but I really don’t see a conspiracy here. There is no federal regulation of non-railroad holding company financial transactions, such as taking control of a board of directors. What we have, in my (as well as others) opinion is FRA doing the bidding of rail labor at an opportune time to push NS on employee retention and new hiring.

It is well-known that Bose is joined at the hip with labor leadership, as is Buttigieg, who recently took part in a public railroad-trashing session with union leadership—the very same people who less than a year ago issued a joint letter of solidarity with Shaw to all NS agreement employees. Meanwhile, Oberman, perceived by some as increasingly playing politics on behalf of the Biden Administration (which includes FRA)—Biden fears losing labor support in the November elections—appears to be playing a role by having the FRA letter posted on its website. Oberman for the past year has used the STB as a bully pulpit on crew availability and headcount—even though STB has no regulatory authority over headcount.

In the weeks leading up to the April 24 NS shareholders meeting and proxy vote (don’t get your Blue and White Cards confused), you will see similar public statements from both sides, much like congressional Republicans and Democrats jousting publicly. It’s political noise, nothing more. There’s a strong possibility, I’m told, that a winner-take-all proxy vote will not be needed, as a settlement will be reached.

In the meantime, things are getting a bit ugly. Without a doubt, both sides have hired lawyers, economists and public relations consultants. I fully expect some to submit commentary to Railway Age under a guise of neutrality. I have seen this before, where those submitting commentary conveniently neglected to include in their bio their professional relationship with one of the parties. We’ll publish those commentaries—provided the authors provide full disclosure. True, no one, including me, is immune from essere ingannato o manipolato, but be mindful that we are on the lookout for those who may tentare di usarci come pulpito prepotente.

As expected, the press releases and letters are increasing in volume. On Feb. 22, the Brotherhood of Railway Signalmen issued this press release supporting NS: