Manchin, Capito, Jenkins, McKinley Welcome Canadian Pacific's Decision to End Norfolk Southern Takeover
Merger would have profited Wall Street investors while potentially costing hundreds of West Virginia jobs
Washington, D.C. – U.S. Senators Joe Manchin (D-WV) and Shelley Moore Capito (R-WV), and Representatives Evan Jenkins (R-WV) and David McKinley (R-WV) today applauded Canadian Pacific Railway’s announcement that it will end efforts to takeover Norfolk Southern. The announcement comes after they expressed their concerns about the merger due to the potentially devastating impact it would have on West Virginia’s economy. Last week, the U.S. Department of Justice and the U.S. Army expressed their opposition to the merger as well.
“The executives at Canadian Pacific Railway recoiled after we exposed their history of cutting jobs to increase investor profits,” Senator Manchin said. “I am pleased that we have been able to shed some light on the potentially devastating impacts of this acquisition, and that the company has ended this attempt to take over Norfolk Southern. This merger was not in the best interest of our state or our nation, and I am pleased that the company withdrew their plans to takeover Norfolk Southern.”
“After hearing the concerns raised by many local officials and employers across the state, it was clear that this merger would have hurt jobs, rail service and several ancillary industries in West Virginia. Considering these negative impacts, I am pleased that Canadian Pacific Railway’s proposed takeover of Norfolk Southern has been stopped in its tracks,” said Senator Capito.
“This hostile merger was a bad deal for West Virginia, and I am relieved that it will not be moving forward. However, the war on coal continues to cost West Virginia jobs, as we are seeing at Norfolk Southern’s division in Bluefield. I am committed to fighting to protect our jobs and to stopping the job-killing regulations coming out of Washington,” Rep. Jenkins said.
“This announcement is good news for our local economy and the workers of West Virginia. Reliable rail service supports hundreds of thousands of good paying jobs and it’s vital we continue investments in rail infrastructure to keep our economy moving. Norfolk Southern has been a strong partner and I am pleased that this ill-advised takeover has been terminated and possible job losses averted,” Rep. McKinley said.
In January, they sent a letter to the U.S. Surface Transportation Board Chairman David Elliot, Vice Chairman Ann Begeman, and board member Debra Miller, which detailed the potentially devastating impact the merger would have on West Virginia’s economy and urged the Board to carefully review the details of the merger. To read the letter, please click here.
Senator Manchin also called for a Senate investigation into the Canadian Pacific Railway’s plan to acquire Norfolk Southern, a transaction that would have profited Wall Street investors, while potentially costing hundreds of jobs in West Virginia. Senator Manchin insisted that the details of the merger be thoroughly reviewed by the Senate Committee on Commerce, Science and Transportation before any element of this transaction was allowed to proceed. Senator Manchin spoke with the CEO of Norfolk Southern James Squires and expressed his support for continued commitment in West Virginia, especially the Prichard Intermodal facility in West Virginia.
For years, Norfolk Southern has been committed not just to its shareholders, but to its employees and to the West Virginia communities it serves. Norfolk Southern currently employs 990 people and supports 430 retirees in the Mountain State. For more information, please click here.
For a comprehensive map of railways throughout the Northeastern United States, click here.
Canadian Pacific Railway’s attempt to acquire Norfolk Southern is troubling because of Canadian Pacific Railway’s history of cutting jobs to increase investor profits. In 2011, Bill Ackman, hedge fund manager at Pershing Square Capital Management and one of the largest shareholders of Canadian Pacific Railway, acquired 14.2 percent of the company’s outstanding shares and initiated an ugly proxy battle that he ultimately won. This earned Ackman more board members, a new Chief Executive Officer, Mr. Hunter Harrison, and a new direction for the Canadian railroad that had a history and a culture of promoting from within. It cost Ackman $40 million to repay Harrison's retirement plan that Canadian National pulled after he violated his non-compete clause to go work for Canadian Pacific, their largest competitor, almost four years ago.
Since Harrison took over as CEO of Canadian Pacific Railway, the company has slashed 6,000 jobs, including 1,800 people in 2015. Just last week, Harrison announced plans to cut another 1,000 jobs – or 12 percent of its workforce – in 2016.
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