Railroad CEO Won't Commit To Concrete Changes After Train Derailment

Norfolk Southern's CEO insisted his company will improve safety and "do what's right" after the disastrous train derailment in Ohio, but outlined few specifics.

The CEO of railroad giant Norfolk Southern, the company responsible for the disastrous train derailment in rural Ohio last month, pledged during a congressional hearing on Thursday to drastically improve the company’s safety culture and make East Palestine and surrounding communities whole again.

“I am determined to make this right,” Alan Shaw told members of the Senate Committee on Environment and Public Works. “Norfolk Southern will clean the site safely, thoroughly and with urgency. You have my personal commitment. Norfolk Southern will get the job done and help East Palestine thrive.”

But he refused to commit to a number of specific actions that senators view as key to fulfilling those promises, from supporting new rail safety legislation and temporarily halting stock buybacks to compensating homeowners for lost property value.

Thursday’s hearing, the first of what is expected to be many on the Ohio derailment, comes more than a month after a Norfolk Southern train careered off the tracks in East Palestine, Ohio, while hauling tons of toxic chemicals. Of the 50 train cars that either derailed or were damaged in the resulting fire, 20 contained hazardous material. Of primary concern are the hundreds of thousands of pounds of vinyl chloride, a common organic chemical used in the production of plastics that has been linked to several types of cancer.

The National Transportation Safety Board concluded that an overheated wheel bearing caused the derailment, and opened a special investigation into Norfolk Southern’s safety practices. The probe targets a series of recent accidents, including the fiery derailment in East Palestine and a conductor’s death on Tuesday.

Meanwhile, a bipartisan group of senators introduced legislation this month to improve safety in the freight rail industry. The bill would create new safety rules for all trains carrying hazardous materials and increase penalties for safety violations. Its sponsors include Sens. J.D. Vance (R-Ohio), Sherrod Brown (D-Ohio) and John Fetterman (D-Penn.).

Shaw said Norfolk Southern supports certain provisions in the bill but stopped short of endorsing the legislation in its entirety.

“We are committed to the legislative intent to make rail safer,” he said. “Norfolk Southern runs a safe railroad, and it is my commitment to improve that safety and make our safety culture the best in the industry.”

Alan Shaw, president and CEO of Norfolk Southern Corporation, testifies before the Senate Environment and Public Works Committee on Capitol Hill on March 9, 2023, in Washington, D.C.
Alan Shaw, president and CEO of Norfolk Southern Corporation, testifies before the Senate Environment and Public Works Committee on Capitol Hill on March 9, 2023, in Washington, D.C.
Anna Moneymaker via Getty Images

The railroad industry, including the Association of American Railroads, an industry lobbying group of which Norfolk Southern is a member, has a long history of fighting stricter safety regulations.

Several lawmakers pressed Shaw about both the company’s safety record and its long-term commitment to East Palestine and other communities impacted by the chemical disaster.

Shaw reminded the committee several times that he’s only been CEO of the company since May of last year. He stressed that the company’s $20 million investment in East Palestine is only an initial “down payment.” And he repeatedly returned to a talking point about doing “what’s right.”

“Will you commit to compensating affected homeowners for their diminished property values?” Sen. Ed Markey (D-Mass.) asked.

“I’m committing to do what’s right,” Shaw said.

“Well, what’s right is — a family that had a home worth $100,000 that is now worth $50,000 will probably never be able to sell that home for $100,000 again,” Markey said. “Will you compensate that family for that loss?”

“Senator, I’m committing to do what’s right,” Shaw said again.

“That is the right thing to do!” Markey shot back. “These are the people who are innocent victims, Mr. Shaw.”

Shaw offered the same vague answer when Sen. Bernie Sanders (I-Vt.) asked him about covering residents’ health care needs into the future.

“We are going to do what’s right for the citizens,” Shaw began.

“What’s right is to cover their health care needs. Will you do that?” Sanders interjected.

“Everything is on the table,” Shaw replied.

Sanders also pressed the railroad executive about the company’s adoption of a cost-cutting strategy called “precision-scheduled railroading,” which involves reducing railroad employees and increasing the length of trains. Sanders noted that Norfolk Southern has reduced its workforce nearly 40% over a six-year period.

“Will you make a commitment, right now, to the American people, that you will lead the industry in ending this disastrous precision-scheduled railroading, which has slashed your workforce and made railroading much less safe?” Sanders asked.

Shaw said the company has “been on a hiring spree” since he took over as CEO, adding 1,500 employees over the last year, but did not directly answer Sanders’ question.

Other lines of questioning ran a similar course.

When Sen. Alex Padilla (D-Calif.) asked if Norfolk Southern planned to hire the workers necessary to inspect rail cars and track infrastructure in order to prevent accidents like this in the future, Shaw again said the company has been on an aggressive “hiring spree” since he started as CEO.

“If we need to hire more signal workers to maintain and inspect the signals, we will absolutely do that,” Shaw said.

When Sen. Jeff Merkley (D-Ore.) asked if the public could count on the company to lobby for, rather than against, safety improvements moving forward, Shaw said Norfolk Southern would “continue to follow the science” and invest in safety.

“I just really thought when you said ‘turn over a new leaf,’ I thought you were saying you were going to now support safety regulations,” Merkley said. “I’m sorry you can’t tell this crowd here today, that would like to hear that, that that is the case.”

Merkley also asked Shaw to pledge to halt stock buybacks until the company puts a “raft” of safety measures in place to reduce derailments. (Norfolk Southern spent a combined $6.5 billion on stock repurchases in 2021 and 2022 and has plans to spend another $7.5 billion on stock buybacks, CNN reported. Those figures dwarf the millions the company has pledged to spend in East Palestine.)

“I will commit to continuing to invest in safety,” Shaw said, stating that the company invests over $1 billion annually on safety. “There is always more that we will do, and I am committed to having the best safety culture in the industry.”

Shaw’s most bureaucratic, noncommittal answer came when Sanders asked him to pledge to provide all Norfolk Southern employees with guaranteed paid sick leave.

“I will commit to continuing to discuss with them important quality-of-life issues,” Shaw said.

“With all due respect, you sound like a politician here, Mr. Shaw,” Sanders said. “Paid sick days is not a radical concept in the year 2023.”

Several committee members stressed the importance of holding Norfolk Southern accountable for immediate and longer-term cleanup and monitoring in East Palestine and the surrounding area. Some have argued that the disaster is the direct result of corporate greed.

“If Norfolk Southern had paid a little more attention to safety and a little less attention to profits — it cared a little more about the Ohioans along its tracks and a little less about its executives and shareholders — these accidents would not have been as bad or not happened at all,” Sen. Brown said.

Paige Lavender contributed reporting.

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