Ancora board candidate sends letter to Norfolk Southern shareholders

Ancora, which owns a large equity stake in Norfolk Southern, issued the below letter from James Barber, Jr., who is one the seven unaffiliated candidates the firm is seeking to elect to the company’s 13-member board of directors at the annual meeting of shareholders on May 9. “I appreciate that many of you are evaluating what my colleagues and I have said in recent weeks about moving Norfolk Southern forward. Both sides have obviously sent you a lot of information to consider and digest before votes are cast at the Annual Meeting. Rather than ask you to read another long letter, I’m writing to you to share just a few personal thoughts on why I want to be part of the railroad’s turnaround and what I plan to deliver for you and the other constituents. When Ancora approached me in 2023 about serving as a proposed director and its suggested CEO, I spent a lot of time independently analyzing Norfolk Southern and considering whether my skills could speed up a turnaround. I am blessed to be able to be selective at this point in my life, and I don’t have any unfulfilled goals in my career after 35 great years at UPS. This enabled me to take my time assessing Norfolk Southern’s challenges and opportunities from the perspective of each of the Company’s key constituents: shareholders, customers, employees, regulators and the communities that trains run through each day. After thinking everything through and reflecting on the transferability of my experiences, I knew I could help move this great brand in the right direction – whether that be as a director, CEO or both. In terms of what our slate wants to deliver, it starts with a culture of accountability, integrity, safety, sustainability and teamwork – all of which underpin highly-efficient and service-oriented logistics companies. These priorities are core to our three-year strategy for initiating a network redesign and implementing true Precision Scheduled Railroading (“PSR”). This strategy, which is distinct from Norfolk Southern’s resilience model, involves laying a foundation that positions proven operators to deliver quantifiable improvements in three primary areas: Service – Transitioning to a true scheduled network will dramatically increase on-time delivery for customers, leading to more trust and more high-margin revenue over time. The Company’s Merchandise Trip Plan Compliance has dramatically underperformed the Surface Transportation Board’s 82% compliance target for years. This weak service has nothing to do with the East Palestine derailment, but rather maintaining a poorly designed network with excess assets and lax scheduling. Fortunately, our strategy provides a roadmap for getting Trip Plan Compliance well above the federal compliance target in the coming quarters. Safety – A true scheduled network will allow Norfolk Southern’s most valued asset, its people, to return home in the same condition they report to work in while also reducing catastrophic incidents that absorb shareholder capital and hinder the brand. In terms of KPIs, we will target a decline in severe derailments and a reduction in the number of reported accidents relative to total network activity. Although accidents periodically occur, Norfolk Southern’s current resilience model has led to the industry’s most costly and severe derailments over the past two-and-a-half years. Safety isn’t a buzzword to me, but an output of tangible policies that are deeply ingrained in an organization. Our strategy accounts for concrete initiatives that will cut down on train switches, decrease dangerous train congestion, and reduce burnout and hours unpredictability. Shareholder Value – I am a true believer that the organization with the best network wins for all constituents. With our scheduled network in place, Norfolk Southern will have a transparent path to balancing service and safety enhancements with operating ratio and share price improvements. A redesigned network powered by PSR will benefit from a permanent reduction in assets, delays and touch points. As assets come out of the network, we will rely on annual attrition (not job cuts or furloughs) to right size our workforce. All of this should ultimately translate to approximately $1.1 billion in annualized savings and an operating ratio in the mid-to-high 50s. When we first hit the road in this campaign, it was clear some of the Company’s constituencies would need to be convinced about what our slate brings to the table. After all, it’s not enough to diagnose problems and speak in broad terms about solutions. On a personal level, one of the most rewarding parts of this contest has been earning the belief of the BLET Teamsters and BMWED Teamsters. As a former Teamster, I’m incredibly grateful for the opportunity to earn their support. My goal is to bring this same spirit of constructive thinking and teamwork to Norfolk Southern and its boardroom. Thank you again for your consideration and time, and we will reward you and all the constituents for a vote of confidence in us. We look forward to delivering the best results possible for you.”