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precision scheduled railroading
Norfolk Southern CEO Refuses to Commit to Giving Workers 7 Paid Sick Days, Halting Stock Buybacks
Questioned at a Senate hearing on the East Palestine disaster, Alan Shaw also wouldn't agree to end "precision-scheduled railroading," a Wall Street-led profit-maximizing approach that critics say endangers communities nationwide.
Mar 09, 2023
Thursday's U.S. Senate hearing about the ongoing environmental and public health disaster in East Palestine, Ohio "did not go well" for Norfolk Southern president and CEO Alan Shaw, the progressive media outlet More Perfect Union declared.
Shaw refused to commit to providing workers with seven days of paid sick leave, ceasing stock buybacks, and abandoning Wall Street-endorsed policies that critics say contribute to the 1,500-plus derailments seen each year in the U.S., including Norfolk Southern's toxic crash near the Ohio-Pennsylvania border last month as well as a derailment that happened in Alabama just before the multimillionaire executive testified.
In remarks prepared for the Senate Committee on Environment and Public Works, Shaw wrote, "I am deeply sorry for the impact this derailment has had on the people of East Palestine and surrounding communities, and I am determined to make it right."
But during the committee's hearing, Shaw refused to use the multiple opportunities he was given to publicly commit to enacting meaningful changes.
Noting that Norfolk Southern has recently rewarded wealthy investors with $10 billion in stock buybacks, Independent Sen. Bernie Sanders of Vermont asked Shaw if he could "tell the American people and your employees right now that... you will guarantee at least seven paid sick days to the 15,000 workers you employ."
Sanders acknowledged that Norfolk Southern recently agreed to provide up to a week of paid sick leave per year to roughly 3,000 track maintenance workers. However, he asked Shaw, "Will you make that commitment right now to your entire workforce?"
"I will commit to continuing to discuss with them important quality-of-life issues," Shaw responded.
Sanders told Shaw he sounds "like a politician" and reiterated his question, but the executive repeated his dodge.
Sanders, chair of the Senate Health, Education, Labor, and Pensions Committee, then told Shaw that he looks forward to discussing the matter further, hinting at a potential request to testify before the panel he leads.
Later during the hearing, Democratic Sen. Jeff Merkley of Oregon asked Shaw, "Will you pledge today that you will do no more stock buybacks until a raft of safety measures have been completed to reduce the risk of derailments and crashes in the future?"
Once again, Shaw refused to give a straight answer, saying that he will commit to "continuing to invest in safety." Merkley repeated his question, to no avail.
More Perfect Union has calculated that payouts to Norfolk Southern's shareholders surged by more than 4,500% over the past 20 years, from $101 million in stock repurchases and dividend bumps in 2002 to $4.7 billion in 2022.
In response to Merkely's inquiry, Shaw claimed that thanks to his company's safety investments, "the number of derailments, hazardous material releases, and personal injuries has declined" over time.
Not helping Shaw's case, a Norfolk Southern train careened off the tracks in Calhoun County, Alabama around 6:45 am ET on Thursday, about three hours before the hearing began. The rail giant was also responsible for other derailments last month in addition to the highly visible one in East Palestine. Moreover, a Norfolk Southern conductor was killed in a collision in Ohio early Tuesday.
More Perfect Union shared data showing that Norfolk Southern's accident rate grew faster than the industry average over the past decade and accused the CEO of lying about his company's safety record.
According to Railroad Workers United and others, industry-led deregulation and Wall Street-backed policies such as "precision-scheduled railroading" (PSR) have made the U.S. rail system more dangerous.
During Thursday's hearing, Sanders brought up PSR, which forces fewer workers to manage longer trains in less time.
The profit-maximizing practice championed by Wall Street has enabled Norfolk Southern to rake in billions of dollars while reducing the size of its workforce by nearly 40% over a recent six-year period, said Sanders, but that has come at the expense of safety.
"Will you make a commitment right now to the American people that you will lead the industry in ending this disastrous precision-scheduled railroading?"
Despite Sanders' request for a "yes or no" answer, Shaw danced around the question, saying that he has increased hiring since becoming CEO last May.
Sanders characterized the recent uptick in hiring as an attempt to recover from a preceding round of mass layoffs and asked once again if Shaw "will lead the industry in doing away with" the PSR model that was "imposed" by profit-hungry Wall Street actors.
Shaw, however, refused to commit to such a change.
Thursday's hearing comes two days after the National Transportation Safety Board—which is already probing the causes of the East Palestine disaster—announced a "special investigation" into Norfolk Southern's "organization and safety culture."
It also comes less than a month after Shaw angered East Palestine residents by skipping a town hall where people expressed their concerns over the long-term consequences of air pollution and groundwater contamination stemming from the release and burnoff of carcinogenic chemicals, a move that was made to avoid a catastrophic explosion.
Following the hearing on Capitol Hill, Food & Water Watch executive director Wenonah Hauter said in a statement that "Shaw's apology today rings hollow," coming as it did "after years spent pushing to roll back the very sorts of safety regulations that would have prevented an accident like this."
"If Norfolk Southern had real concern for the safety of the countless communities like East Palestine through which their trains run, they would be calling for more safety measures for the industry," said Hauter. "Instead they offer voluntary steps that can easily be undone, prioritizing profit margins over people."
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Rail Labor Leader Calls Norfolk Southern's Business Model 'Dangerous to America'
"They gamble with your money, and you hold all the risk if they lose by putting a toxic train in the ditch in your community."
Mar 01, 2023
A rail labor leader on Wednesday sent a scathing letter to Ohio's Republican governor warning that Norfolk Southern's business model poses a threat to communities across the U.S.—one that must be met with swift regulatory action.
"I am writing to share with you the level of disregard that Norfolk Southern has for the safety of the railroad's workers, its track structure, and East Palestine and other American communities where NS operates," reads the letter by Jonathon Long, general chairman of the American Rail System Federation (ARSF) of the Brotherhood of Maintenance of Way Employes Division of the International Brotherhood of Teamsters (BMWED), which represents nearly 3,000 Norfolk Southern employees tasked with constructing, inspecting, and maintaining railroad tracks.
Long, who has been a Norfolk Southern maintenance of way employee for nearly three decades, wrote to Ohio Mike DeWine that Norfolk Southern is "one of many freight railroads operating under the cost-cutting business model, 'precision scheduled railroading,' otherwise known as 'PSR.'"
"This business model was foisted upon the railroad industry by Wall Street 'activist investors' and hedge funds starting around 2015," Long noted. "What this business model really involves is running longer, heavier behemoth trains that the track structures are not necessarily designed to handle."
"It also involves the concentrated slashing of employees from the workforce (30% industry-wide since 2015, 21% for NS Maintenance of Way Employees) and then shifting the workload onto those remaining workers, pushing them to work faster and longer hours," he continued. "Additionally, PSR involves eliminating fail-safes or preventative safety precautions that promote safer rail operations and help prevent disasters such as derailments."
Emphasizing the rail giant's lack of concern for worker health and safety, Long wrote that he received reports from employees indicating that Norfolk Southern "neither offered nor provided" adequate protective equipment to those who were instructed to assist clean-up efforts in the wake of last month's toxic derailment in East Palestine, Ohio.
According to Long:
One worker shared with me that he called his supervisor and requested to be transported off the derailment site due to concerns of his safety caused by the exposure to the chemicals which were causing him nausea and migraines; the supervisor stated he would get back to the employee, but he never heard back from his supervisor and the employee was left on the job site. Many other employees reported that they continue to experience migraines and nausea, days after the derailment, and they all suspect that they were willingly exposed to these chemicals at the direction of NS.
Long argued that such blatant neglect is "a basic tenet" of Norfolk Southern's "cost-cutting business model," which he called "dangerous to America" because it "disregards the sanctity of human life for the sake of more record profits."
The labor leader went on to reveal that during recent talks over paid sick leave, Norfolk Southern urged union negotiators to drop their opposition to the company's "experimental automated track inspection program," which workers fear is a ploy to replace and ultimately weaken existing track inspection protocols.
Long attached a copy of the company's request to his letter to DeWine, noting that "while BMWED and NS reached an agreement on paid sick leave, I absolutely did not agree with NS' proposal to support their experimental track inspection program."
"NS' proposal was ultimately for the union to be complicit in NS' effort to reduce legally required minimum track safety standards through supporting their experimental track inspection program without a sensible fail-safe or safety precautions to help ensure trains would not derail," Long wrote.
"In other words," he added, the rail company's plan "was to use your community’s safety as their bargaining chip to further pursue their record profits under their cost-cutting business model. They gamble with your money, and you hold all the risk if they lose by putting a toxic train in the ditch in your community."
\u201cAs clean-up of the New Palestine HAZMAT derailment ensued, N.S. dangled the lifting of in-person track inspection requirements (as currently required by FRA regs) as a bargaining chip in exchange for paid sick leave. Because to the RRs, profits are the only thing that matters.\u201d— BMWED (@BMWED) 1677683298
Long's letter came as lawmakers in the U.S. House and Senate pushed new legislation this week aimed at strengthening regulations for trains carrying hazardous materials and increasing penalties for companies that violate safety rules.
"It shouldn't take a massive railroad disaster for elected officials to put partisanship aside and work together for the people we serve—not corporations like Norfolk Southern," Sen. Sherrod Brown (D-Ohio) said in a statement Wednesday marking the introduction of a bipartisan Senate bill for which he is one of the lead Democratic sponsors.
"Rail lobbyists have fought for years to protect their profits at the expense of communities like East Palestine and Steubenville and Sandusky," Brown added. "These commonsense bipartisan safety measures will finally hold big railroad companies accountable, make our railroads and the towns along them safer, and prevent future tragedies, so no community has to suffer like East Palestine again."
In his letter Wednesday, Long warned that unless concrete action is taken at the state and federal levels to rein in Norfolk Southern and other rail giants, more trains will "go off the rails in communities like East Palestine."
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Strong Plurality of Voters Blame Norfolk Southern for Toxic Train Crash
"Voters across party lines are in favor of increased safety measures," according to think tank Data for Progress.
Feb 24, 2023
Almost half of U.S. voters surveyed by progressive think tank Data for Progress blame rail company Norfolk Southern for the February 3 train derailment in East Palestine, Ohio which forced 1,500 residents to evacuate, contaminated soil and water, and has been blamed for causing a number of symptoms even as officials claim air and water monitoring hasn't shown dangerous levels of pollution.
Forty-nine percent of the 1,243 people surveyed by Data for Progress from February 17-22 said they believed Norfolk Southern was responsible for the crash, including 50% of Democrats, 52% of Independents, and 47% of Republicans.
Nineteen percent said they didn't know who to blame, while 10% blamed the U.S. Department of Transportation.
\u201cNEW POLL: After the train derailment in East Palestine, Ohio, voters blame train operator Norfolk Southern for the crash and strongly support requiring railroad companies to improve working conditions and upgrade their braking systems.\n\nhttps://t.co/JeTnZ1ugxl\u201d— Data for Progress (@Data for Progress) 1677251896
The poll was taken as the National Transportation Safety Board (NTSB) released its preliminary assessment of the derailment of the train, which was carrying hazardous materials including vinyl chloride. As Common Dreams reported Thursday, the report found the crash was likely caused by a wheel bearing failure due to overheating.
Eddie Hall, national president of the Brotherhood of Locomotive Engineers and Trainmen (BLET), pointed out after the report was released that rail companies have aggressively pushed to loosen safety regulations, spending "nearly a half billion dollars lobbying Congress" in the past two decades as they attempt to reduce train crews to just one person and pushed back as the Obama administration sought to require more modern braking systems on trains carrying hazardous materials.
Rail workers have also blamed major rail companies' use of Precision Scheduled Railroading (PSR), which requires train to run on strict schedules and cuts back on equipment and train crews, for the crash and others like it.
NTSB Chair Jennifer Homendy said Thursday the board is now examining Norfolk Southern's use of "wayside defect detectors," which did not alert the train crew quickly enough to the overheated wheel bearing, and said the board could issue safety recommendations to regulators or the rail company.
ProPublicareported on Wednesday that Norfolk Southern has at times instructed train crews "to ignore alerts from train track sensors designed to flag potential mechanical problems"—a policy union leaders say is "emblematic" of PSR. The NTSB did not suggest that was the case with the derailment in East Palestine.
Fifty-eight percent of respondents to the Data for Progress survey said they believe there are not enough safety regulations in place for railroad companies that transport hazardous material.
"Voters across party lines are in favor of increased safety measures, including 89% of voters who support setting higher standards for maintenance on railroads and strengthening safety regulations on railroad cars carrying explosive substances," reported the group. "Eighty-six percent of voters support placing limits on the length and weight of freight trains carrying hazardous materials."
The poll results were released as Rail Workers United (RWU), an inter-union caucus of rail workers, demanded that regulators and lawmakers take action to stop companies like Norfolk Southern from prioritizing speed and profits over safety.
"Every day we go to work, we have serious concerns about preventing accidents like the one that occurred in Ohio," RWU general secretary Jason Doering said. "As locomotive engineers, conductors, signal maintainers, car inspectors, track workers, dispatchers, machinists, and electricians, we experience the reality that our jobs are becoming increasingly dangerous due to insufficient staffing, inadequate maintenance, and a lack of oversight and inspection."
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