Activist Grim Reaper Claims Another Suit… CSX CEO Out After Failing to Find a Merger Partner

Boy, that escalated quickly…

You know that Grim Reaper meme… the one where Death knocks on doors, leaves a blood trail, and keeps moving to the next victim? Well, Joe Hinrichs (the CEO ex-CEO of CSX) just got the live-action treatment (metaphorically speaking, of course).

After barely two years in the engineer’s seat, his door was the next to get marked… only this time the scythe came in the form of activist investors. Now he’s out, and a 70-year-old industrial gas veteran has been handed the keys to a $65B freight train.

Hinrichs, fresh off his Ford days, parachuted into CSX in 2022 with one job: cool tensions with the unions before they boiled over. For a minute, he did it (labor disputes chilled out) but then Mother Nature and infrastructure projects kicked him in the nuts. First, hurricane damage north of $100M. Then, a $466M Baltimore tunnel rebuild that basically turned the railroad into a glorified parking lot. Trains slowed, profits slipped, and investors didn’t care about “acts of God” or orange vests with jackhammers… they only cared that Union Pacific was absolutely “sonning” CSX.

(Source: CNBC)

By midsummer, Ancora Holdings (aka the activist hedge fund that already made Norfolk Southern cry uncle) had CSX in a reverse triangle. And the message wasn’t polite. It was straight Tony Soprano energy: “Listen, you either find yourself a bigger railroad to dance with… or we’ll find some guys or we’ll tow your Lexus out of your parking spot stat.”

And just like that, the “shocking” news nobody was shocked by hit the wires: Joe Hinrichs is out. On paper he “resigned,” but let’s be real… Ancora was basically standing over his shoulder dictating the farewell email. Sliding into the big chair is Steve Angel, a 70-year-old industrial gas lifer who once ran GE’s locomotive division back when Aqua Net was still a thing. He’s got nearly half a century of CEO mileage and more Wall Street contacts than a Hamptons clambake. The board is selling him as a “visionary in long-term value creation.” Translation: please, Steve, just make the line on the stock chart go up.

The panic button at CSX has Union Pacific’s fingerprints all over it. UP is cooking up an $85 billion marriage with Norfolk Southern that would give America its first coast-to-coast railroad empire. If that deal closes, CSX risks becoming the third wheel stuck in the Eastern corridor, watching freight fly past. Investors want action, not kumbaya with labor unions. And because we’re living in the “activist investor cinematic universe,” BNSF and Canadian Pacific Kansas City already said they’re not interested in tying the knot. Meaning Angel might have to get creative… or desperate.

At least Wall Street got a kick out of it… CSX stock climbed 4% on the news, as investors bet Angel might finally steer the company out of its two-year slump. And that’s where the irony kicks in. The massive construction projects that wrecked CSX’s numbers? They’re basically finished. Hinrichs was probably just a couple months away from looking like a hero. Instead, the curtain falls early… he’s at home tossing socks in the dryer and watching reruns while Angel strolls in, cuts the ribbon, and takes the applause. So the next time someone tells you timing doesn’t matter send them this article.

At the time of publishing this article, Stocks.News holds positions in Ford and General Electric as mentioned in the article.