December 2007—TCU has been receiving questions as to our position about the very public criticisms levied by TCI, a British hedge fund, against CSX management.
TCI owns approximately 4% of CSX stock. Earlier this year the fund called for a sweeping change in direction at CSX. They want to up stock prices by freezing capital spending, levying higher prices on shippers, and leveraging the company to “junk” credit status to fund stock repurchases.
If past actions by the hedge fund are any guide, employees too would suffer as a result of their single-minded drive to increase stock prices. TCI previously invested in ABN Amro, a Dutch bank with worldwide locations. They broke the bank up – investors profited, while 550 ABN Amro employees in Jacksonville, Florida lost their jobs.
TCU leaders note that while we certainly have our differences on various issues with CSX management, we support their opposition to TCI’s move to disinvest in the railroad.