Norfolk Southern CEO Criticized in Senate Hours After New Accident
(Bloomberg) -- Senators attacked Norfolk Southern Corp.’s response to last month’s toxic chemical spill in Ohio just hours after another one of the company’s trains derailed in Alabama.
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The railroad showed “an apparent lack of transparency” immediately after the Feb. 3 incident, Senator Tom Carper, a Delaware Democrat who leads the Environment and Public Works Committee, said Thursday in the first congressional hearing about the accident. He chided the “mistrust” the railroad created with local residents, while Norfolk Southern Chief Executive Officer Alan Shaw offered a personal apology.
The three-hour spectacle amplified questions about the company’s safety record, which has been called into question following a string of incidents this year. Early Thursday morning, a Norfolk Southern freight train derailed in eastern Alabama. Two days prior, there was a fatal wreck involving one of the company’s trains in Cleveland.
Shaw faced heated rounds of questions from lawmakers that ranged from safety to the railroad’s policy about staffing and sick leave. He said the company is making some changes, including hiring more staff, but he stopped short of promising everything that the lawmakers asked for.
“You sound like a politician,” Vermont Senator Bernie Sanders, an independent, told Shaw at the hearing.
The accident in East Palestine, Ohio, set off a political inferno and has led federal agencies to open broader reviews of the railroad’s safety practices. While no one was directly injured by that train wreck, it forced people to temporarily evacuate their homes and has raised tough questions about the way chemicals are transported across the US.
Dozens of rail cars jumped the tracks in the small town after a wheel bearing failed, prompting a fire and, days later, the burning of toxic vinyl chloride to prevent an explosion.
“It was a disaster waiting to happen,” said Senator Ed Markey, a Massachusetts Democrat. “Corporate greed, outdated railway safety regulations, lax hazardous material standards were all the fuel that was ready to combust.”
Shaw told the committee that the railroad has committed to $20 million in reimbursements and other payments in East Palestine and is urgently working to remove waste from the area.
“To date, nearly 600 homes have been screened; none of the results indicate a health risk from incident-related substances,” Shaw said. “We are committed to this monitoring for as long as necessary.”
Analysts at UBS AG said in a research note Thursday that there’s “significant momentum” in Congress to pass legislation tightening safety at freight railroads, but details of such a measure remain unclear.
Several lawmakers called for passage of bipartisan legislation on rail safety. The measure would require potentially costly measures such as additional track-side sensors designed to prevent derailments and setting minimum staffing on train crews.
Shaw said the company supported some of the proposals, but he declined to offer a full endorsement.
Ohio Senator JD Vance, a Republican, chided fellow members of his party who oppose the measure.
“There is nothing about the conservative worldview or our principles that requires us to take a knee to a massive corporation,” he told reporters.
Shaw told lawmakers that the railroad operator is funding a center to assist more than 4,200 families as well as reimbursing firefighters and making payments to local schools.
The company is also working to improve its safety based in part on findings so far in the investigation by the National Transportation Safety Board, he said. He defended the engineers on the East Palestine train, saying they were operating below the speed limit and followed proper protocols.
Shares of Norfolk Southern slipped 1.1% in New York trading at 1:59 p.m.
--With assistance from Jarrell Dillard and Ari Natter.
(Updates with Alabama incident in third paragraph, lawmaker comments starting in eighth.)
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