TCI/CSX showdown. Themes

Continuing yesterday's entry about the Riskmetrics-sponsored webcast....

Michael Ward, the railroad's CEO, said early on in the company's presentation that "there's a growing recognition among public policymakers of the critical role of rail."

He seemed to mean a couple of things by that. First, I believe he wanted to wrap his cause in the mantle of homeland security. Imagine how terrible it would be if the US rail system fell into the hands of foreigners?

GI Joe and Tommy have been fighting together in the desert for some time now, so even given certain premises, most people find this a less than compelling danger when the damn furriners in question have their HQ in London.

But I think he meant something else, too. He meant that building up the rail system might be part of a national energy policy. They get more freight-transporting bang for the hydrocarbon buck than highway-travelling trucks. Letting TCI get seats on the board would threaten this because (in his view) TCI isn't interested in building up the railroad, but in deconstructing it for a quick buck.

Another speaker on the CSX side was Donna Alvarado, one of the incumbent directors. She took umbrage at TCI's contention that they're trying to shake up a lazy and entrenched board, that has let value-enhancing opportunities pass it by. Ms Alvarado said that, so the contrary, CSX is a model of enlightened corporate governance, "the board has opted out of anti-takeover statutes" for example, and its elections aren't staggered.

That was an interesting point, and frankly a better one than any Mr. Ward had made.

When TCI got its turn, they did in fact make the charge that Ms Alvarado had sought to pre-empt. Christopher Hohn, the fund's founder, said: "We see a really dramatic difference between companies that have strong boards and companies that have rubber-stamp boards," and that CSX is, alas, one of the latter.

Also, in reply to much of Mr. Ward's presentation, Mr. Hohn said: "If we were just looking to make a quick buck, we would have left CSX a long time ago."