(The following story by Peter Bacque appeared on the Richmond Times-Dispatch website on June 25.)
RICHMOND, Va. — Just how an acrimonious stockholder battle over seats on CSX’s board of directors might effect Virginians is unknown, experts and officials say.
“It would have virtually no operational impact on Virginia,” George E. Hoffer, a transportation economist at Virginia Commonwealth University, said yesterday.
But Amtrak and Virginia Railway Express commuter trains in Northern Virginia run on CSX tracks, said state Transportation Secretary Pierce R. Homer.
“We don’t know if a change in management would affect the timeliness or quality of that service,” Homer said. “It’s a complete unknown to us.”
CSX, the third-largest U.S. railroad, is holding its annual stockholder meeting in New Orleans today. The railroad has more than 1,000 miles of track and more than 1,300 employees in Virginia, said company spokesman Garrick Francis.
The TCI Group, made up of The Children’s Investment Fund, a London-based equity group, and Cayman Islands-based 3G Capital Partners, are seeking five seats on CSX’s 12-member board in an effort to force better financial performance out the company.
CSX says it’s already performing well, noting that the company’s share price has risen more than 270 percent since January 2004.
“The CSX board has delivered outstanding performance in every relevant measure of operations, created industry-leading shareholder value and outlined detailed plans to continue driving strong, sustainable growth,” the company said.
“CSX is fast on the way to becoming the best railroad in America,” the Jacksonville, Fla.-based company said.
The TCI Group would sell the company, burden it with debt, freeze expansion, alienate customers and regulators, and lay off workers, CSX warned.
But Jennifer Pickett with the state’s Department of Rail and Public Transportation said, “We have not received any information regarding potential impacts on Virginia service. It’s too early to know.”
To improve Virginia’s rail service capacity, Pickett said, the state rail agency is funding $60.6 million in capital-improvement projects with CSX in Virginia.
CSX was based in Richmond until 2003, and Richmond physician Frank S. Royal is one of its board members. He could not be reached for comment yesterday.