(The following story by Mark Basch appeared on The Times-Union website on June 3.)
JACKSONVILLE, Fla. — With less than a month to go before its shareholders meeting, CSX Corp. has picked up support from three labor unions in its proxy fight with The Children’s Investment Fund Management LLP and 3G Capital Partners Ltd.
The unions posted messages on their Web sites last week urging members who own CSX stock to vote for the company’s slate of 12 directors to the company’s board. TCI and 3G, which own 8.7 percent of CSX’s stock, have nominated five of their own directors for election to the board at the company’s June 25 annual meeting.
The unions expressed concern that TCI’s and 3G’s proposals to improve productivity at the Jacksonville-based railroad company would threaten the jobs of union members.
“Normally, I couldn’t care less if a group of millionaires were fighting over dividing up a pot of loot. I do care when those millionaires want to line their pockets at the expense of the BMWED membership,” said a letter to union members by Brotherhood of Maintenance of Way Employees Division President Freddie Simpson.
“We certainly have our difference with various issues with CSX management,” said Transportation Communications International Union president Bob Scardelletti in a message posted on the union’s Web site.
“But we support them in opposing The Children’s Investment Fund’s encroachment on the strength and profitability of this American railroad,” he said.
The BMWED represents about 5,000 CSX employees.
The Brotherhood of Locomotive Engineers and Trainmen, which represents 5,500 to 6,000 CSX workers, also came out in support of CSX’s current board. BLET spokesman John Bentley said he did not have information on how much CSX stock the members own.
Regardless of how many shares the union members own, CSX welcomed the news.
“We’re always glad to have the support of our labor unions,” said CSX spokesman Garrick Francis.
Despite the opposition, TCI and 3G spokesman Jonathan Gasthalter said the investment funds expect to be able to work with the unions.
“We are confident that, if elected, our director nominees would work together with the other CSX directors and union leadership to improve overall safety at CSX,” he said.
Although those three unions are putting past differences with management behind to support them in the proxy fight, one union is not willing to let bygones be bygones. The United Transportation Union, which represents about 6,500 CSX workers, needs to have a more “trusting relationship” with CSX management before it will offer support for the current board, spokesman Frank Wilner said.
“There will have to be a special respect by CSX toward the UTU before the UTU takes anything but a neutral position,” he said.