CLEVELAND, May 30 — There is a proxy fight under way at CSX. At stake is the direction the company will take in the future if it fails to fight off efforts by a hedge fund called The Children’s Investment Fund (TCI), which is seeking to capture leadership positions on the CSX Board of Directors.
BLET members who own CSX stock will receive in the mail a white ballot from CSX, which recommends that its slate of directors be elected. TCI will be sending a blue one seeking to add five handpicked nominees to the Board.
BLET urges all union shareholders who receive these ballots to vote in favor of CSX. Supporting the hedge fund’s Board of Director nominees could have negative consequences for your job.
Hedge fund investors are typically out for only one thing — money for shareholders, sometimes at the expense of the company in which they invest.
If past actions by the hedge fund are any guide, CSX employees would suffer as a result of the fund’s drive to increase stock prices. TCI is on record saying that their goal of increasing shareholder returns would be achieved by disinvestment in capital improvements. In other words, no investments in track and infrastructure would lead to derailments, injuries and — in severe cases — fatalities. TCI is also on record saying they would seek to achieve their goal by aggressively introducing labor-eliminating technologies. In other words, the hedge fund would try to make money for its investors by eliminating your job.
For example, the Florida Times-Union reported on August 12, 2007, that pressure from TCI led to the breakup and sale of the Dutch banking firm ABN Amro, which at the time had offices all over the world. While TCI made money for its investors, the fallout caused 550 ABN Amro workers to lose their jobs in Jacksonville, Fla.
The Times-Union reported that hedge funds like TCI “often look to break up companies they own and sell the pieces, cashing out as the profits from the sale are distributed to shareholders. Another strategy: pressuring management to take cash a company had been planning to use for other purposes and instead distributing it to shareholders.”
Rail Labor has certainly had its differences with CSX on a variety of issues. However, the BLET supports CSX in closing the gate on TCIs “Trojan Horse” in order to better protect the welfare of the railroad and its hard working employees.
Again, the BLET believes it is in the best interest of our members and all of Rail Labor to use the white ballot and vote in favor of the CSX slate of directors.