Norfolk Southern CEO on freight rail safety in the aftermath of East Palestine

Transcript

SCOTT DETROW, HOST:

It's been about five months since a Norfolk Southern train carrying toxic chemicals crashed in East Palestine, a town right on the edge of the Ohio-Pennsylvania border, a little south of Youngstown. A number of the cars were carrying hazardous materials. And in an attempt to avoid a possible explosion, there was a controlled dayslong burn of those chemicals. Residents within a mile radius of the crash were evacuated. Days later, the evacuation order was lifted, and some residents say they developed rashes and nausea. The crash became a national flashpoint and a hot-button issue on both sides of the aisle. Not long after the derailment, Norfolk Southern CEO Alan Shaw found himself in front of Congress, being grilled by a group of bipartisan lawmakers. In March, Democratic Senator Ed Markey of Massachusetts asked Shaw whether he would support legislation requiring two-person train crews at minimum. Shaw didn't answer.

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ALAN SHAW: Senator, we'll commit to using research and technology to ensure the railroad operates safely.

ED MARKEY: Will you commit to a two-person crew on all trains?

SHAW: Senator, we're a data-driven organization, and I'm not aware of any data that links crew size with safety.

DETROW: The Railway Safety Act of 2023 proposed stricter safety regulations, including mandating two-person crews on freight trains. Here's the co-sponsor of the bill, Republican Senator J.D. Vance of Ohio, speaking in May.

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J D VANCE: What happened in East Palestine cannot be undone. We cannot reverse it. We cannot change it. We cannot undo the psychological, economic and physical toll of the derailment in East Palestine. But I guarantee you, whether it's tomorrow or next week or next year, there will be another East Palestine in this country if we do not pass the Railway Safety Act. It's that simple.

DETROW: And back at that March hearing, Ohio Governor Mike DeWine said life in East Palestine stopped being normal.

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MIKE DEWINE: Members of the committee, Norfolk Southern has an obligation to restore this community. It was their train, their tracks, their accident. They're responsible for this tragedy.

DETROW: The National Transportation Safety Board is investigating the incident, and cleanup efforts are still ongoing. The residents of East Palestine are still in limbo. Alan Shaw, the CEO of Norfolk Southern, insists the company is continuing their commitment to help East Palestine recover and that Norfolk Southern is now on the forefront of improving safety in the rail industry. I sat down with Alan Shaw to talk about all of this.

SHAW: Scott, it's a pleasure to be here. Thank you for hosting me.

DETROW: And I want to start with that gold standard line, because we've heard you say it a lot in recent months. What specifically does it mean?

SHAW: You know, for me, it means we're going to continue to enhance safety at Norfolk Southern. We recognize the role that we play in the U.S. economy, and we take safety very, very seriously. So I look for inspiration, and I look outside of the industry. And I decided to hire the former - an admiral, who was a former head of the Navy Nuclear Propulsion Program, as an independent consultant reporting directly to me. And so he's put together a team, which includes several former admirals, all with Navy nuke experience. And they're going to help us enhance our safety culture at Norfolk Southern. We know that the Navy Nuclear Program is the gold standard of safety, and we will be the gold standard of safety in the rail industry.

DETROW: Have there been any specific changes that you've made since you've started getting that consultation from that expert group?

SHAW: Yeah, we've done a number of things. You know, in March, we implemented a six-point safety plan. You've seen me on the Hill engaging proactively with legislative leaders on both sides of the aisle, advancing various railway safety bills. You know, there are a lot of things that make a lot of sense to us, and we're not waiting to act. We've hired the Navy Nuclear Program. You've seen me engage personally with the heads of our labor unions. I wrote an open letter to all 20,000 Norfolk Southern employees, talking about collaborating with my union colleagues on safety. And it was jointly signed by the heads of 12 of our labor unions.

DETROW: The February crash got a lot of attention, as you certainly know, but this is a broader issue, right? If you look at Norfolk Southern, you look at the other big rail lines, there were 286 train derailments last year. That's about every other day on average - more than every other day on average. And that's on the mainlines. You know, that's not counting the rail yard derailments, things like that. It's just that they're not carrying toxic chemicals in towns in the way that happened in East Palestine. What's the big-picture problem here? Why does this keep happening at this level, and how do you get those numbers down?

SHAW: You know, rail is the safest, most efficient and most sustainable form of transporting goods across land, and we can do better. You know, last year at Norfolk Southern, the number of derailments was the lowest in two decades. You know, we can do better. And last year, the employee injury rate at Norfolk Southern was the lowest in a decade, and we can do better.

DETROW: This bill, it's not quite stalled on the Senate right now, but there's an open question of, does it have 60 votes to go forward? Do you want to see something pass the Senate? Do you want to see some sort of rail safety legislation get to President Biden's desk and signed?

SHAW: Yes, we are for bipartisan solution to rail safety. And we understand that it's a industry-wide approach, and it's - it includes shippers, it includes customers, it includes railcar owners, and it certainly includes the railroads themselves. And again, we're not waiting to act.

DETROW: I want to talk about the two-crew minimum, though, because that is a piece of this legislation. That was a component of a law that Ohio put in place after the crash. And that's something that the industry has pushed back on, even filing a lawsuit to block that aspect of Ohio's law. Where are you on mandating two-crew minimums?

SHAW: You know, what we're really interested in is focusing on quality of life for my union colleagues. And there is a component of a ground-based conductor that would improve a predictable work schedule.

DETROW: And ground-based conductor - this is a conductor who's not physically on the train?

SHAW: Correct. And so, you know, we - since I became CEO about a year ago, I've made it a real point to engage with my union colleagues. And we were the first railroad to have paid sick leave for all of our union employees. We're the first railroad to have assigned days off for all of our union employees. Since I became CEO of Norfolk Southern, we've been on a hiring spree. And right now, we've got about 1,500 more union employees than we did when I became CEO.

DETROW: I guess - I have a couple follow-up questions on that. And first of all, can you just explain the idea of a ground-based conductor a little more? Because I think a lot of people hearing this might think, wait a second, how does this work? How does somebody who's not on the train help make sure the train is safe?

SHAW: Well, a ground-based conductor will be at various points along the route. The ground-based conductor will have a very predictable schedule and know when they're - when they'll be able to go home. And they'll be able to assist the engineer with switching cars at local industry.

DETROW: So that's a future where there's one person on the train, there's one person assisting the train, but not physically on the train.

SHAW: Correct.

DETROW: I want to stick with the crew just for one more moment because it's something that certainly a lot of the labor groups involved in freight rail have talked a lot about. It's something that's been one of the higher-profile points of contention here. I guess, thinking about this from somebody who lives in a town that the freight train is coming through, somebody who's not an expert in the field, who doesn't know a lot of the details, they might be thinking, these trains are up to three miles long. Doesn't it make sense to have more people on the train?

SHAW: You know, we have not seen a link between crew size and safety. We invest in safety at Norfolk Southern. We've invested over a billion dollars a year in safety. And, you know, we're investing in engagement with our craft colleagues as well, as I noted, because we're investing in the future.

DETROW: We're talking about working with the labor unions, and you've been doing that and having those conversations. And I saw that letter that you signed, along with various unions that work on Norfolk Southern saying, we're going to have a conversation. We don't always need to agree, and that's OK. It's a little bit of a paraphrase, but you basically had that message in there. And I know you've been having a lot of internal conversations, but I just wanted to play some criticism from you - from somebody. This is Clyde Whitaker, the Ohio state legislative director for one of the big rail employee unions. This was speaking at a Senate hearing about East Palestine, and I wanted to just listen to this and get your response.

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CLYDE WHITAKER: This derailment did not have to happen, and it makes it so much more frustrating for us to know that it was very predictable. And yet our warnings and cries for help over the last seven years have fallen on deaf ears, and the outcome was exactly as we feared.

DETROW: I know we were talking kind of broadly about these trends, but what's your specific response to that, that something that happened like what happened in February was predictable, as he put it?

SHAW: Yeah. When I became CEO, I charted it, of course, for Norfolk Southern. And we are investing in our employees. We're investing in safety. We're investing in the long-term health of our customers and the communities that we serve. And employee engagement is a big part of that. And I am very encouraged by the fact that our employees feel - they feel that they are welcome to raise their hand and offer suggestions for improvement. That's a big part of our safety program. I'm looking for 20,000 voices at Norfolk Southern advocating for safety.

DETROW: It's been about - more than five months at this point since the derailment. Knowing what you know now, what would you have done differently? What could the company have done differently, either leading up to the derailment or in the immediate aftermath of the derailment?

SHAW: I'm really proud of our response in East Palestine. We had a family assistance center set up the day following the derailment. We have committed over $63 million to East Palestine, which includes a $25 million park revitalization project. We're working really closely, under the direction of the EPA and the IEPA on the environmental remediation, and we're investing in the community to help the community thrive. I go back almost every week, and I sit and listen to the community about what we can do to help invest in the community and help it thrive. And I'll keep going back in each - each and every day, we're going to do the next right thing.

DETROW: Let me try that a little differently. What is a lesson you've learned? Not necessarily something you'd do differently, but what is a lesson you have learned that hadn't quite materialized in your head before, after dealing with this experience very intensely?

SHAW: You know, I think what it does for me is it reaffirms my commitment to working in the best interest of our employees and our customers and the communities we serve, which is the commitment that I rolled out in December of last year.

DETROW: That's Norfolk Southern CEO Alan Shaw. Thanks so much for talking to us.

SHAW: Thank you, Scott.

DETROW: And Frank Morris was listening in to that conversation. Frank covers the rail industry from member station KCUR in Kansas City. Frank, what did you hear in that conversation? What jumped out to you about what Shaw said and what Shaw didn't say?

FRANK MORRIS, BYLINE: Yeah, what he didn't say was that railroads really hate this two-person mandate that's baked into this Railway Safety Act. They feel that that's just not germane to the wreck in East Palestine - there were three people in that crew, for instance - and that it's not a safety issue. They say that they don't have data to back up the assertion that two people are better than one in the cab. Now, that's a very popular idea and it makes intuitive sense. And there are anecdotal, you know, instances of two people - the conductor helping the engineer through a heart attack or, you know, backstopping them on safety issues. But the railroads hate that idea because they are facing a future of autonomous vehicles, driverless trucks, and they don't want to have a statutorily mandated economic disadvantage going forward in perpetuity because of this Railway Safety Act.

DETROW: He didn't quite answer when I said, do you oppose the two-person requirement? But it was clear from what he said that it seemed like he did. And as you're saying, this has been a really big area of pushback from the rail industry, going as far as to sue Ohio to block that part of that state law from taking effect.

MORRIS: Yeah, the American Association of Railroads sued Ohio, and they'll probably be suing other states, too, because there are other states, like Kansas, who are proposing the exact same thing. You know, mandating two people in a cab or a train, again, makes sense intuitively. The unions are solidly behind it, and they say it's a safety issue. But the railroads are, again, facing this driverless vehicle future, and they don't want to be locked in to that requirement.

DETROW: I noted to Shaw that there were 286 train derailments on mainlines in 2022, and he responded that derailment numbers are overall down from several years ago. Was that accurate?

MORRIS: That is true, but there's a caveat. So in terms of the rate of accidents, it's up a little bit per mile. But the actual number of derailments is down.

DETROW: That's Frank Morris, who covers the rail industry from member station KCUR. Frank, thanks so much.

MORRIS: Thank you, Scott. Transcript provided by NPR, Copyright NPR.