# CSX as the goose that laid the golden egg?!



## John Bredin (Jan 3, 2008)

As you may be aware, there's a major controversy brewing over the management of CSX. A hedge fund called the "Children’s Investment Fund," along with another hedge fund, owns about 8% of CSX shares, and CIF is trying to nominate a board of directors opposed to the present CSX management.

http://biz.yahoo.com/nytimes/071221/1194728394989.html?.v=21

So why is this an issue for a rail discussion board? Because part of CIF's platform for the CSX board is that management must "justify the capital spending plan," which it describes as "reckless" and "economically unjustifiable." Moreover, CIF wants CSX to freeze *any* growth-oriented capital spending (that is, expansion of capacity) until Congress resolves the re-regulation issue. (Does anyone really know when that would be? Because AFAIK one shippers' group or another has been pushing for re-regulation in some form or another for years now, and there's no reason to see that trend ending anytime soon.)

http://www.businesswire.com/portal/site/go...amp;newsLang=en

I've got no dog in this fight except insofar as it affects rail service. People already make jokes about CSX as the "broad gauge line" and the like due to insufficient spending on capital improvements. Now comes a group of investors who think CSX spends *too much* on capital?!


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## battalion51 (Jan 6, 2008)

Apparently the owners of the hedge fund missed the memo last week where the company was slapped with huge fines for safety infractions. These guys obviously know nothing about railroads, because anyone who knows anything knows it requires a HUGE amount of investment and continued investment in maintenane for the physical plant. The only capital spending they may not be able to justify is the nearly continuous purchase of new locomotives.


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