Norfolk Southern CEO set to face Senate scrutiny after series of derailments
The company proposed a limited safety plan as Congress considers expansive new railroad regulations.
Norfolk Southern CEO Alan Shaw is set to testify before a Senate panel on Thursday, hoping to tamp down bipartisan scrutiny of freight rail operators in the wake of his company’s toxic derailment last month in East Palestine, Ohio.
Shaw will be appearing at a hearing of the Senate Environment and Public Works Committee, along with state and local officials who responded to the Feb. 3 accident. Members of both parties have called for increased regulations of the rail industry.
In advance of the hearing, Norfolk Southern announced on Monday a six-point safety plan meant to address overheated bearings, which the National Transportation Safety Board said was the likely cause of the derailment.
The Senate hearing comes shortly after another Norfolk Southern train derailed in Springfield, Ohio, on Saturday, although that train was not carrying hazardous materials. It was at least the fifth Norfolk Southern derailment in the state since October.
Rail workers have been calling for changes to safety protocols, including shorter train lengths, more time for inspections and maintenance, a mandated minimum of at least two people on every crew and upgraded braking systems. Ohio Sens. Sherrod Brown, a Democrat, and J.D. Vance, a Republican, will be testifying prior to Shaw. They introduced a bipartisan rail safety bill last week that includes some of those requests.
Norfolk Southern is likely to testify in opposition to the legislation. It said it had “opposed additional speed limitations and requiring ECP brakes” in a 2015 lobbying disclosure. The company has seen an increase in both profits and accidents in recent years, as it runs longer and heavier trains while cutting the workforce.
“We want to hear his commitment to make this community whole, to make this so that people can get back to their lives the way they were — that means reimbursement for all the expenses,” Brown told reporters last week.
Officials in Sandusky, Ohio, said that following the focus on East Palestine, Norfolk Southern was more receptive to cleaning up the aftermath of an Oct. 8 wreck that blocked an underpass. Officials had waited for months for the company to perform repairs to sewer infrastructure, pavement and retaining walls, according to WOIO, a Cleveland news outlet.
“The American people should hear from Norfolk Southern’s CEO precisely why they thought it was a good idea to spend years — years — lobbying to loosen regulations designed to prevent accidents like this,” Senate Majority Leader Chuck Schumer said in a floor speech last week. “And I especially want to hear why Norfolk Southern, after seeing a record $3.3 billion in profits last year, prioritized billions — billions — in stock buybacks instead of putting that money toward safety and towards their workers.”
Shaw visited East Palestine on Feb. 18, following scrutiny about his company’s handling of the cleanup. He said he was there to support the community.
“Our company will be working tirelessly every day to get East Palestine back on its feet as soon as possible,” Shaw said in a statement released a day before his visit. "We know we will be judged by our actions, and we are taking this accountability and responsibility very seriously.”
Norfolk Southern says it has provided $13 million to East Palestine in the weeks since the crash. (The company had initially pledged $25,000 to support “the efforts of the American Red Cross and their temporary community shelters” and offered affected residents $1,000 “inconvenience fees.”) In 2021 and 2022, the company spent billions on stock buybacks. It announced that Shaw was personally setting up a scholarship fund of $445,000 for high school seniors in the town, a similar amount to the proceeds he received from a recent stock sale.
Shaw did not attend a town hall at East Palestine High School on Thursday; the company instead sent a representative, a government relations employee. Norfolk Southern had pulled out of an earlier community event at the last minute, citing concerns over unspecified threats.
The CEO did speak at a Feb. 23 CNN town hall, where residents grilled him about the cleanup efforts. Residents and officials like Pennsylvania Gov. Josh Shapiro have accused the company of prioritizing a speedy reopening of the railroad over safety. Last month, the EPA sent a letter to Norfolk Southern saying the company had failed to properly dispose of contaminated soil at the crash site.
At the CNN town hall, Shaw said Norfolk Southern believed it had an “environmentally sound plan based on engineering principles” and that the company was going to remove the tracks in response to pushback from the community. That process began Friday. Last week, a railway union official accused the company of endangering workers at the cleanup site by not providing proper equipment.
“In East Palestine, Norfolk Southern was on-scene immediately after the derailment and coordinated our response with hazardous material professionals who were on site continuously to ensure the work area was safe to enter and the required PPE was utilized, all in addition to air monitoring that was established within an hour,” Norfolk Southern told Yahoo News last week in a statement responding to the letter.
Shaw became CEO on May 1, 2022, after being named president in December 2021. Previously serving as the chief marketing officer, he has worked at Norfolk Southern in various roles since 1994, with a focus on “marketing, operations, and finance,” per a company press release.
Scrutiny over the company came after one of its trains derailed minutes from the Ohio-Pennsylvania border on the evening of Feb. 3, with the governors of both states issuing a joint evacuation order for a roughly 1-mile radius, since 11 of the cars contained hazardous materials. On Feb. 6, Norfolk Southern burned off five tankers full of vinyl chloride in what it said was an effort to avoid a catastrophic explosion, but it resulted in images of a giant toxic smoke plume that quickly circulated on social media. Two days later, residents were urged to return home, despite a lingering smell in the air and reports of such symptoms as dizziness, headaches and rashes.
Prior to the recent scrutiny, Shaw and Transportation Secretary Pete Buttigieg met in Washington, D.C., late last year, which Shaw celebrated on LinkedIn.
“We appreciated the opportunity to discuss our shared goals for economic growth and job creation, a more sustainable supply chain and continued investments in America’s essential transportation infrastructure,” read the caption of a photo of Shaw, Buttigieg and Norfolk Southern’s chief legal officer.
“Every time we shift freight from highway to rail, we reduce carbon emissions, ease congestion, and reduce wear on the nation’s publicly funded highway infrastructure,” the post continued. “That’s a source of great pride for our railroaders, and a growing competitive advantage as we help our customers achieve their own goals for carbon reduction. I was proud to represent our company with Secretary Buttigieg and look forward to partnering on ways to deliver for the American people.”