(Bloomberg News circulated the following story by Angela Greiling Keane on May 30.)
NEW YORK — CSX Corp. shareholders who belong to two Teamsters rail unions should support the carrier’s board slate over nominees backed by activist investor TCI Fund Management LLP, the labor groups said.
Voting for the hedge fund’s choices “could have negative consequences for your job,” the Brotherhood of Locomotive Engineers and Trainmen said in a statement today on its Web site. The Brotherhood of Maintenance of Way Employes urged members to side with CSX earlier this week.
TCI and 3G Capital Partners Ltd. nominated five candidates for CSX’s 12-member board to prod the third-largest U.S. railroad into adopting bigger rate increases and taking steps such as larger stock buybacks. The two funds say they own about 8.3 percent of Jacksonville, Florida-based CSX.
“Hedge-fund investors are typically out for only one thing — money for shareholders, sometimes at the expense of the company in which they invest,” Edward Rodzwicz, president of the engineers union, said on the Web site. About 6,000 CSX workers belong to his union, and 5,000 to the maintenance group, Teamsters Rail Conference spokesman David White said.
CSX, TCI Respond
CSX welcomed the support of the unions, which have sparred with management in the past, as it prepares for the June 25 annual meeting in New Orleans.
“We are always pleased to have the support of our labor unions who recognize our performance our defined vision for the future,” spokesman Garrick Francis said.
Jonathan Gasthalter, a spokesman for London-based TCI, said unions would benefit under the fund’s slate.
“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.
CSX rose 3 cents to $69.06 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 57 percent this year to lead the Standard & Poor’s 500 Railroads Index.