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2/18/2016 11:50:00 AM Write a Letter to the Editor Write a letter to the Editor

Railroads Close Tracks, Cut Jobs Across the Country as Coal Cools Off

Andrew Harrer/Bloomberg News

Working in or around Conway Terminal, the sprawling testament to the might of the U.S. freight railroad system, it might be easy to forget the storm of troubles brewing at Norfolk Southern Corp.

The Virginia-based rail carrier has long experienced the booms and busts of products and commodities in the broader U.S. economy, and so have its workers at Conway Terminal, one of the largest rail yards in the country that hugs the Ohio River in Beaver County.

But the recent and historic decline of coal — long the most important commodity hauled through Pennsylvania — has represented a significant hit for the financially ailing Norfolk Southern, which owns Conway and all the traffic that moves through it.

Furloughs that began last month served as a wake-up call for Heath Vezza, vice president of the workers union representing about 325 track maintenance employees in the central operating division in Pennsylvania. Vezza said 12 of his union workers — younger employees hired from 2012 to 2015 — have been furloughed at the moment. There have been handfuls of layoffs at other divisions through January, he added, and it’s hard to know how many jobs in total were cut.

“That’s your new generation of railroaders that need to learn from the older employees and to be trained,” Vezza lamented.

Layoffs, facility closures, and the downgrading and selling of rail lines are all on the table as part of Norfolk Southern’s four-year plan presented Jan. 27 to shareholders following a fourth-quarter earnings report. The carrier reported a profit of $1.6 billion in 2015, down 22% from $2 billion in 2014. The decline was spearheaded by a 23% drop in coal revenue, the commodity that makes up nearly a fifth of Norfolk Southern’s total revenue.

The pullback isn’t only being seen at Norfolk Southern.

CSX Corp., which owns a competing rail line across the river from Conway Yard and follows a similar path through Pittsburgh, also plans to continue its years-long effort to reshape its business after coal revenue dived 19% in 2015. The Jacksonville, Fla.-based carrier reported annual earnings of $2 billion in 2015, up 2% from 2014.

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By Daniel Moore
Pittsburgh Post-Gazette


Distributed by Tribune Content Agency, LLC.

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