May 23, 2008—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 British hedge fund called The Children’s Investment Fund (TCI) to capture leadership positions on the CSX Board of Directors.
TCU 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.
TCU leaders urge union shareholders who receive these ballots to vote in favor of CSX. Says International President Bob Scardelletti, “Don’t be fooled by the innocent name of this foreign group. What TCI is up to is an aggressive strategy that ultimately will be against the interests of all railroad members.”
The hedge fund is on record saying their goal to increase shareholder returns would be achieved by disinvestment in capital improvements—and aggressive introduction of labor-eliminating technologies. If past actions by the hedge fund are any guide, employees would suffer as a result of the fund’s drive to increase stock prices. For example, TCI previously invested in ABN Amro, a Dutch bank with worldwide locations. They broke the bank up—investors profited, while 550 ABN Abro employees in Jacksonville, Florida lost their jobs.
“We certainly have our differences on various issues with CSX management,” says Scardelletti. “But we support them in opposing The Children’s Investment Fund’s encroachment on the strength and profitability of this American railroad.”