Posts Tagged ‘Norfolk Southern’

NS Posts 2015 Annual Report Online

April 1, 2016

Norfolk Southern has posted its 2015 annual report online and CEO James Squires touted early highlights of the company’s five-year strategic plan to promote growth, streamline operations, improve network performance and deliver enhanced shareholder value.

NS logo 2[NS] “has taken decisive and deliberate action to capitalize on significant growth opportunities within our unique network,” Squire wrote in a letter included in the report.

“This year (2016) we expect to achieve productivity savings of $130 million through disciplined cost control and asset utilization,” Squire wrote. “Annual savings will grow to more than $650 million by 2020. The projects we accomplished in 2015, together with the initiatives we are undertaking over the next five years, will position Norfolk Southern to achieve our long-term financial goals.”

Among the steps cited by the report that NS said it has taken to cut costs and improve its network are:

  • Closing the Roanoke, Virginia, office building and consolidating or relocating approximately 500 positions.
  • Restructuring the company’s Triple Crown Services subsidiary.
  • Reducing capital spending.
  • Expanding track rationalization in the coalfields.
  • Idling a major lake coal terminal in Ashtabula.
  • Consolidating two operating divisions.

NS said it has implemented these measures while still maintaining its commitment to providing good customer service. “During this time, we achieved near all-time best service levels,” Squires wrote.

NS also noted that it expanded its ability to serve the Northeast through acquiring the Delaware & Hudson line between Sunbury, Pennsylvania, and Schenectady, New York.

NS Offers Opening on CP Merger Talks

March 31, 2016

As expected, Canadian Pacific has filed with the U.S. Securities and Exchange Commission a shareholder resolution to be voted upon at the annual meeting of Norfolk Southern on May 12 that directs the NS board of directors to conduct “good faith discussions” about a merger.

The Calgary-based CP intends to send letters to NS shareholders to outline the value of the proposed merger.

Canadian PacificNS told the SEC in a proxy that it believes the CP-sponsored resolution is unnecessary because the NS board would be willing to discuss a merger with CP if the Canadian carrier obtains a declaratory order from the Surface Transportation Board and is willing to increase its offer.

CP has made three offers to acquire NS stock, but the NS board has rejected all three proposals.

The NS proxy filing signaling a willingness to discuss a merger was greeted warmly by CP.

“CP has consistently stated that we are open to discussing all terms of a potential deal, including price, but we can’t negotiate with ourselves,” said CP Chief Executive Officer E. Hunter Harrison in a news release. “Given we have also asked the Surface Transportation Board for a declaratory order on the voting trust model we were pleased to hear that Norfolk Southern may now be willing to engage in direct face-to-face discussions.”

In its statement of opposition, the NS board wrote that:

  • It is open to all feasible alternatives to drive shareholder value.
  • It has confidence in NS’ strategic plan, which aims to boost revenue and cut costs to reduce the railroad’s operating ratio to 65 percent by 2020.
  • It has clearly communicated its concerns regarding CP’s acquisition proposals.
  • CP has not addressed the board’s concerns regarding the value of its three merger offers or the regulatory risks of a merger.

It is unclear if the STB will issue before the NS annual meeting a ruling on the CP voting trust even though CP asked for one by May 6.

STB spokesman Dennis Watson said he couldn’t say when the board might rule.

Watson said the STB could issue a decision based on initial evidence or might begin a proceeding to ask the parties to submit additional evidence.

The latter would likely move a ruling by the board to date after the NS annual meeting.

“We have not heard anything from the STB on timing, and we are proceeding with our shareholder resolution,” said CP spokesman Martin Cej.

Although voting trusts are commonly used to insulate companies from unlawful control during a merger review process, CP has proposed an arrangement that the STB has never ruled upon.

CP proposed putting itself and not the company it wishes to acquire, into a trust. Harrison and other CP executives would sever their positions with CP and, presumably, take over as managers of NS.

Earlier, the STB set a deadline of April 8 for interested parties to file statements and participate in the declaratory order process.

‘McKay Day’ at Berea is this Saturday

March 30, 2016

The Akron Railroad Club’s 12th annual Dave McKay Day will be held in Berea on Saturday, April 2.

The outing is held in memory of the ARRC’s longest-serving president. McKay served as president for 12 years before stepping down in December 2004.

ARRC logoAs always, ARRC members, guests and friends are invited to spend the day in Berea watching the action on the Norfolk Southern and CSX mainlines.

We can expect to see a diverse mixture of traffic on both railroads, including intermodal, automotive, manifest, minerals and tank car trains carrying crude oil or ethanol.

The trains of both railroads sometimes feature locomotives from other railroads, particularly BNSF, Union Pacific, Canadian Pacific and Canadian National.

CP has a pair of run-through trains between Chicago and Buffalo, New York, that use CSX tracks. At least one of those might pass through during our time in Berea.

The outing begins when the first member arrives and ends when the last person leaves.

It will be early April so who knows what kind of weather we will have. Past McKay Days have featured everything from shirt sleeve temperatures to heavy snow.

A few members have been having dinner at the end of the day at the Berea Union Depot Taverne. That tradition will continue this year.

Parking is available in the far west end of the restaurant parking lot or across Depot Street on private property owned by railfan Ed Gibbs.

The radio frequencies in use by trains in Berea are 161.070 and 160.980 on NS and 160.800 and 160.860 on CSX.

NS Sets Annual Meeting for May 12

March 30, 2016

Norfolk Southern has set May 12 as the date for its annual meeting during which Canadian Pacific interests are expected to ask NS stockholders to vote on a resolution mandating merger discussions with CP.

NS logo 1The resolution would direct NS management to meet with CP management to discuss a merger. NS management is opposing the resolution.

In a letter sent to NS employees, CEO James Squires said he will discuss during the meeting the progress the company has made in its five-year strategic plan to streamline operations and increase profit.

Squires said NS stockholders might receive proxy materials from CP pertaining to the resolution it has proposed to direct NS to talk merger with CP.

Another Successful ‘Easter Egg Hunt’

March 29, 2016

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Over the Easter weekend I ended up with some colorful lashups while railfanning in a sort of Easter Egg hunt.

On Saturday I got a GATX GP15 going west on a Norfolk Southern freight at Alliance. Later that afternoon I caught a “skittles” lashup of Wheeling & Lake Erie power at Summit Street in Akron.

On Sunday, I found a Union Pacific GE in a westbound NS coal train. The engines were making some nice smoke effects.

Finally, I got an eastbound oil train which I chased down the Bayard line. A scenic photo at the dairy farm at Moultrie finished off my weekend.

Article and Photographs by Todd Dillon

NS Puts Executive Retreat up for Sale

March 28, 2016

If you want to know how a railroad tycoon lives and have $12 million burning a hole in your pocket, you can find out by purchasing Norfolk Southern’s executive retreat in Florida.

NS has put the 1.96-acre beachfront complex on the market, apparently as part of its ongoing cost-cutting campaign to try to boost its financial performance.

NS logo 1The retreat is known as Lay-by and is located on Anna Maria Island near Tampa.

It has 14 units, a tennis court, a pool and 190 feet of beach on the Gulf of Mexico.

Railroad analyst Anthony Hatch told Trains magazine that sale of the beach retreat is largely symbolic.

The railroad said last December that it would seek to reduce expenses over the next five years in an effort to achieve productivity savings of $650 million per year by 2020 and reduce its operating ratio from 72.5 percent last year to at least 65 percent.

NS Cuts Rails on West Virginia Secondary

March 25, 2016

Norfolk Southern cut the rails this week on its West Virginia Secondary, formally taking the track out of service for about 50 miles, most of it in Ohio.

NS halted traffic last month on the route, which extends from Columbus to Belle, West Virginia, near Charleston.

NS logo 2The line is out of service between Glouster, Ohio, and milepost 116.5 where CSX ownership of the track begins.

The Ohio Central continues to use a portion of the West Virginia Secondary in Ohio to serve a coal mile at milepost 65.5

The mothballed property includes 50 miles of mainline track, and the yard tracks, a siding and a couple of industrial spurs in Middleport, Ohio.

In West Virginia, NS continues to provide local service on the West Virginia Secondary six days a week between Alloy and Nitro.

NS operates north of Nitro as needed to serve the interchange with CSX at milepost 128.6 in Point Pleasant. The yard in Nitro is located at milepost 170.

Thus far, NS has operated only a couple of trains per month north of Nitro to serve two customers and the CSX interchange. An NS ballast train was also spotted recently near Point Pleasant.

NS Names New VP of Human Resources

March 24, 2016

Ann Adams has been named by Norfolk Southern as its vice president human resources.

The appointment is effective April 1. She succeeds Juan Cunningham, who retired on Jan. 31.

Ann Adams

Ann Adams

Adams will be based in Norfolk, Virginia, and oversee employment planning and staffing, employee development, employee benefits, compensation, equal employment opportunity compliance, and employee assistance programs and medical services.

She has served NS as assistant VP human resources since 2012, having joined the company in 2001 as a human resources manager.

Before coming to NS, Adams founded a business that developed customized database applications for retail clothing sales. She also worked as a product manager for a database application marketing company.

Look What I Found in Bellevue

March 22, 2016

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On Sunday I drove out to Bellevue to catch the Rio Grande tunnel motor pair. While driving by the Norfolk Southern yard on Ohio Route 4, I spotted a strange sight.

I turned around to park and got these photos of NS 8509 a GE C40-8.5 just out of the rebuild program. It and several sisters are testing in road service, most without a full paint job.

Unlike the SD60e program, which has been fairly successful, this rebuild program is not going so well. The other day 8505 was leading a train and failed on the road.

Currently, just the engines that have been finished will remain in use but further rebuilds have been canceled.

Article and Photograph by Todd Dillon

GE Pushing Internet Connectivity in Locomotives

March 22, 2016

General Electric expects that more than 3 million locomotives and other GE-built products will be connected to the Internet by 2020.

The company said in a recently published report that digital interconnectivity plays a critical role in its newer locomotives and industrial vehicles developed and produced by its transportation division.

GE transportation“By the end of 2016, we expect it to have 200,000 assets under management, 100 GE applications and 20,000 developers creating many more applications,” said GE CEO Jeffrey R. Immelt.  “Our aspiration is to offer with every GE product a pathway to greater productivity through sensors, software and big-data analytics.”

GE estimates that more than 700 of its locomotives that meet Environmental Protection Agency Tier 4 emission standards have digital components that have saved their railroad owners $197 million in fuel expenses.

Digital components also have reduced the amount of time needed to make a diagnosis of problems and to make repairs.

Norfolk Southern began to adopt in 2010 GE’s Movement Planner software to streamline train operations.

In its factories, GE uses Predix software, a cloud-based productivity management system that may have applications for the railroad industry.

GE Transportation, which has an assembly plant in Erie, Pennsylvania, produces the majority of locomotives for the North American market.


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