A general view of the exterior of the headquarters of Norfolk Southern on April 1, 2023 in Atlanta, Georgia.
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Norfolk Southern is almost two months into a battle with activist investor Ancora, which is trying to shake up the railroad’s board and oust CEO Alan Shaw.
Now the firm is taking aim at Norfolk Southern’s new operating chief John Orr over what the activist calls an “excessive” buyout package and a career marred by allegations of racial and sexual discrimination.
Last month, Norfolk Southern hired Orr away from rival CPKC, paying tens of millions of dollars to buy him out of his contract. The move was widely seen as a response to Ancora’s operational criticisms and received praise from several Wall Street analysts.
In a letter to Norfolk Southern shareholders on Friday, Ancora highlighted past misconduct by Orr that raises questions about his hiring, even as the executive has overseen improvements in the railroad’s operations in his three weeks on the job.
Ancora documented both alleged and substantiated workplace misconduct by Orr, dating back to his time as a mid-level executive at Canadian National. An appointee of the Canadian Arbitration Board substantiated allegations that Orr used verbally abusive language toward a female employee in the early 2000s.
The employee and another witness told the employment tribunal at the time that Orr regularly cursed and shouted at the employee, and called her a “f—— b—-” and a “f—— idiot.” A witness told the arbitrator that, in one instance, Orr told the employee that she “was so f—— stupid it was embarrassing.”
The arbitrator found the claims credible.
Ancora also flagged a lawsuit filed in 2019 by a Black executive, who described Orr’s treatment of employees and subordinates as “abysmal.” The suit was filed against Canadian National, alleging racial discrimination.
Orr’s behavior was allegedly “so bad” that Canadian National was forced to provide executive coaching for him, according to a 2020 filing in the lawsuit. Orr’s deposition is sealed and the case was settled in 2022.
Prior to the announced hiring of Orr, Ancora drew attention to claims about his behavior in emails to two Norfolk Southern board members that CNBC obtained.
Ancora said in its statement on Friday that the hiring of Orr was a costly proposition that’s harming shareholders. As part of the agreement, Norfolk Southern said it would pay Orr’s prior employer $25 million in cash and provide additional unspecified concessions for a key rail hub and route in the southern U.S. Norfolk Southern values that particular part of the route at around 1% of its revenues.
When it announced Orr’s hiring, Norfolk Southern didn’t disclose the initial impact of the concessions or the estimated knock-on effects in the years to come.
‘Flawed premise’
Norfolk Southern told CNBC in a statement that Ancora’s analysis of the value of the route — the Meridian Speedway agreement — “is completely inaccurate and based on a flawed premise,” in that it assumes Norfolk Southern is forgoing more revenue than it actually is.
“As we previously stated, this revised agreement is by no means a consequential concession,” the company said.
Ancora is seeking to oust Norfolk Southern’s Shaw along with Orr in favor of former UPS CEO Jim Barber and former CSX Executive Vice President Jamie Boychuk, respectively. The activist has said that Norfolk Southern is dramatically underperforming its peers, and has laid the blame at the feet of Shaw and the board.
Regarding Orr, Norfolk Southern said he has a “track record of improving performance while operating safely and with integrity.”
“Ancora’s attempt to malign John by dredging up claims against his former employer, one of which is from over 20 years ago, is nothing more than an attempt to distract from the facts about their deeply flawed COO candidate, Jamie Boychuk,” a company spokesperson told CNBC. “Mr. Orr and Mr. Boychuk’s track records and industry reputations are simply not comparable.”
Jamie Boychuk and John Orr.
Courtesy: Longacre Square Partners and Norfolk Southern
In February 2023, a Norfolk Southern freight train derailed in East Palestine, Ohio, releasing toxic chemicals into the environment and prompting a political fight regarding railroad safety. Since then, the stock is roughly flat while the S&P 500 is up 26%.
Norfolk Southern’s shareholders meeting is scheduled for May 9.
Ancora has gained the backing of other stakeholders in its fight with the company. Neuberger Berman, which holds a small position in Norfolk Southern, said on Friday that it would support Ancora’s slate, citing a “history of poor governance that has long preceded” the railroad’s transformation efforts.
A settlement between the two sides appears unlikely, Gordon Haskett analyst Don Bilson said in a Friday note to clients. Shaw previously told CNBC that the company offered Ancora a “couple” of board seats in a settlement offer.
Ancora told CNBC that it’s made repeated attempts to settle with the company, both directly and through advisors. Any settlement, from Ancora’s perspective, would be contingent on a board refresh and Shaw’s ouster. The board has repeatedly expressed confidence in Shaw and has said it isn’t interested in a settlement that would lead to his departure.
United Launch Alliance Atlas V rocket carrying the first two demonstration satellites for Amazon’s Project Kuiper broadband internet constellation stands ready for launch on pad 41 at Cape Canaveral Space Force Station on October 5, 2023 in Cape Canaveral, Florida, United States.
Paul Hennessey | Anadolu Agency | Getty Images
Amazon delayed the launch of its Kuiper internet satellites due to poor weather conditions on Wednesday night.
A United Launch Alliance rocket carrying 27 Kuiper satellites was set to lift off from a launchpad in Cape Canaveral, Florida, but ULA said it couldn’t continue countdown operations as “stubborn cumulus clouds” and heavy winds pushed the launch outside its planned window, according to a livestream.
“Weather is observed and forecast NO GO for liftoff within the remaining launch window at Cape Canaveral this evening,” ULA said. The company said it will provide a new launch date at a later point.
Six years ago Amazon unveiled its plans to build a constellation of internet satellites in low Earth orbit, a region of space that’s within 1,200 miles of Earth’s surface. The company aims to sell high-speed, low-latency internet to consumers, corporations and governments, offering connections through square-shaped terminals. Commercial service is expected to come online later this year.
Amazon is racing to compete with SpaceX’s Starlink, the dominant player in the market, with 8,000 satellites already up in the air. SpaceX CEO Elon Musk now has a central role in the White House as one of President Donald Trump’s top advisors, overseeing the Department of Government Efficiency, or DOGE. Since Musk took on the role, Starlink’s footprint has increased within the federal government.
The clock is ticking for Amazon to meet a deadline set by the Federal Communications Commission, which requires the company to have half of its total constellation, or 1,618 satellites, up in the air by July 2026.
Once it completes its first launch, Amazon expects to ramp up its production, processing and deployment rates. It’s begun prepping satellites for its next mission, which will also hitch a ride on one of ULA’s Atlas V rockets.
Alphabet CEO Sundar Pichai meets with Polish Prime Minister Donald Tusk in Warsaw, Poland, on February 13, 2025.
Klaudia Radecka | Nurphoto | Getty Images
Google has reversed a policy forbidding employees from discussing its antitrust woes following a settlement with workers.
The company sent a notice to U.S. employees last week saying it rescinded “the rule requesting that workers refrain from commenting internally or externally about the on-going antitrust lawsuit filed against Google by the U.S. Department of Justice,” according to correspondence viewed by CNBC.
Google settled with the Alphabet Workers Union, which represents company employees and contractors, according to the U.S. National Labor Relations Board, or NLRB. The settlement and policy reversal mark a major victory for Google staffers, who have seen increased censorship on subjects such as politics, litigation and defense contracts by the search giant since 2019.
The U.S. Department of Justice filed an antitrust lawsuit against Google in 2020, alleging that the company has kept its share of the general search market by creating strong barriers to entry and a feedback loop that sustained its dominance.
Google said it “will not announce or maintain overbroad rules or policies that restrict your right to comment, internally or externally, about whether and/or how the on-going antitrust lawsuit filed against Google by the U.S. Department of Justice may impact your terms and conditions of employment,” according to last week’s notice.
The reversal comes as Google and the DOJ prepare to return to the courtroom for their scheduled remedies trial on April 21. The DOJ has said it is considering structural remedies, including breaking up Google’s Chrome web browser, which it argues gives Google an unfair advantage in the search market.
A U.S. District Court judge ruled in August that Google illegally held a monopoly in the search market. Google said it would appeal the decision. The DOJ doubled down on its calls for a breakup in a March filing.
Following the August ruling, Kent Walker, Google’s president of global affairs, sent a companywide email directing employees to “refrain from commenting on this case, both internally and externally.”
Shortly after, the Alphabet Workers Union filed an unfair labor practice charge against Google with the NLRB. The union alleged that Walker’s message was an “overly broad directive” and said that a breakup could impact workers’ roles. The NLRB in March ruled that Google must allow workers to speak on such topics.
Google’s settlement states that the National Labor Relations Act gives employees the right to form, join or assist a union. It notes that Google is not rescinding its prior clarification that states employees may not speak on behalf of Google on this matter without approval from the company. The settlement also adds that Google will not interfere with, restrain or coerce workers in the exercise of their rights.
Despite the settlement, spokesperson Courtenay Mencini said Google did not agree with the NLRB’s ruling.
“To avoid lengthy litigation, we agreed to remind employees that they have the right to talk about their employment, as they’ve always been free to and regularly do,” Mencini said in a statement to CNBC.
The settlement by Google comes at a “crucial moment” ahead of the remedies trial, the Alphabet Worker’s Union said Monday.
“We think the potential remedies from this trial could have impact on our wages, working conditions and terms of employment,” said Stephen McMurtry, communications chair of the Alphabet Workers Union-CWA, told CNBC.
Apple CEO Tim Cook inspects the new iPhone 16 during an Apple special event at Apple headquarters on September 09, 2024 in Cupertino, California.
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Apple shares skyrocketed 15% on Wednesday after President Donald Trump announced a 90-day pause on his administration’s “reciprocal tariffs,” which would have affected the company’s production locations in Vietnam, India, and Thailand.
The rally added over $400 billion to Apple’s market cap, which now stands just under $3 trillion. It was Apple’s best day since January 1998, when late founder Steve Jobs was the interim CEO and three years before the company unveiled the first iPod. At the time, Apple’s market cap was close to $3 billion.
Apple has been the most prominent name to get whacked by Trump’s tariffs. Before Wednesday, it was on its worst four-day trading stretch since 2000. Investors worried about Apple’s outlook because the company still makes the majority of its revenue from selling physical devices, which need to be imported into the U.S.
Most of Apple’s iPhones and other hardware products are still made in China, which was not exempted from tariffs on Wednesday. In fact, Trump increased tariffs on China to 125% on Wednesday, up from 54%.
China issued an 84% tariff on U.S. goods this week, raising the possibility that Apple could get caught up in a trade war and lose ground in China, its third-largest market by sales.
Apple has worked to diversify its supply chain to lessen reliance on China in recent years.
On Wednesday, tariffs on Vietnam were reduced from 46% to 10%, and tariffs on India were cut 26% to 10%, which raises the possibility that Apple will be able to serve a large percentage of its U.S. customers from factories outside of China with lower tariffs.
Stocks skyrocketed across the board on Wednesday after Trump announced the tariff pause. The Nasdaq Composite climbed over 12%, its second-best day ever.
Apple hasn’t commented publicly on Trump’s tariffs, but CEO Tim Cook will likely address the topic on an earnings call on May 1.