Norfolk Southern CEO Refuses to Commit to Giving Workers 7 Paid Sick Days, Halting Stock Buybacks
Questioned at a Senate hearing on the East Palestine disaster, Alan Shaw also wouldn't agree to end "precision-scheduled railroading," a Wall Street-led profit-maximizing approach that critics say endangers communities nationwide.
Thursday's U.S. Senate hearing about the ongoing environmental and public health disaster in East Palestine, Ohio "did not go well" for Norfolk Southern president and CEO Alan Shaw, the progressive media outlet More Perfect Union declared.
Shaw refused to commit to providing workers with seven days of paid sick leave, ceasing stock buybacks, and abandoning Wall Street-endorsed policies that critics say contribute to the 1,500-plus derailments seen each year in the U.S., including Norfolk Southern's toxic crash near the Ohio-Pennsylvania border last month as well as a derailment that happened in Alabama just before the multimillionaire executive testified.
In remarks prepared for the Senate Committee on Environment and Public Works, Shaw wrote, "I am deeply sorry for the impact this derailment has had on the people of East Palestine and surrounding communities, and I am determined to make it right."
But during the committee's hearing, Shaw refused to use the multiple opportunities he was given to publicly commit to enacting meaningful changes.
Noting that Norfolk Southern has recently rewarded wealthy investors with $10 billion in stock buybacks, Independent Sen. Bernie Sanders of Vermont asked Shaw if he could "tell the American people and your employees right now that... you will guarantee at least seven paid sick days to the 15,000 workers you employ."
Sanders acknowledged that Norfolk Southern recently agreed to provide up to a week of paid sick leave per year to roughly 3,000 track maintenance workers. However, he asked Shaw, "Will you make that commitment right now to your entire workforce?"
"I will commit to continuing to discuss with them important quality-of-life issues," Shaw responded.
Sanders told Shaw he sounds "like a politician" and reiterated his question, but the executive repeated his dodge.
Sanders, chair of the Senate Health, Education, Labor, and Pensions Committee, then told Shaw that he looks forward to discussing the matter further, hinting at a potential request to testify before the panel he leads.
Later during the hearing, Democratic Sen. Jeff Merkley of Oregon asked Shaw, "Will you pledge today that you will do no more stock buybacks until a raft of safety measures have been completed to reduce the risk of derailments and crashes in the future?"
Once again, Shaw refused to give a straight answer, saying that he will commit to "continuing to invest in safety." Merkley repeated his question, to no avail.
More Perfect Union has calculated that payouts to Norfolk Southern's shareholders surged by more than 4,500% over the past 20 years, from $101 million in stock repurchases and dividend bumps in 2002 to $4.7 billion in 2022.
In response to Merkely's inquiry, Shaw claimed that thanks to his company's safety investments, "the number of derailments, hazardous material releases, and personal injuries has declined" over time.
Not helping Shaw's case, a Norfolk Southern train careened off the tracks in Calhoun County, Alabama around 6:45 am ET on Thursday, about three hours before the hearing began. The rail giant was also responsible for other derailments last month in addition to the highly visible one in East Palestine. Moreover, a Norfolk Southern conductor was killed in a collision in Ohio early Tuesday.
More Perfect Union shared data showing that Norfolk Southern's accident rate grew faster than the industry average over the past decade and accused the CEO of lying about his company's safety record.
According to Railroad Workers United and others, industry-led deregulation and Wall Street-backed policies such as "precision-scheduled railroading" (PSR) have made the U.S. rail system more dangerous.
During Thursday's hearing, Sanders brought up PSR, which forces fewer workers to manage longer trains in less time.
The profit-maximizing practice championed by Wall Street has enabled Norfolk Southern to rake in billions of dollars while reducing the size of its workforce by nearly 40% over a recent six-year period, said Sanders, but that has come at the expense of safety.
"Will you make a commitment right now to the American people that you will lead the industry in ending this disastrous precision-scheduled railroading?"
Despite Sanders' request for a "yes or no" answer, Shaw danced around the question, saying that he has increased hiring since becoming CEO last May.
Sanders characterized the recent uptick in hiring as an attempt to recover from a preceding round of mass layoffs and asked once again if Shaw "will lead the industry in doing away with" the PSR model that was "imposed" by profit-hungry Wall Street actors.
Shaw, however, refused to commit to such a change.
Thursday's hearing comes two days after the National Transportation Safety Board—which is already probing the causes of the East Palestine disaster—announced a "special investigation" into Norfolk Southern's "organization and safety culture."
It also comes less than a month after Shaw angered East Palestine residents by skipping a town hall where people expressed their concerns over the long-term consequences of air pollution and groundwater contamination stemming from the release and burnoff of carcinogenic chemicals, a move that was made to avoid a catastrophic explosion.
Following the hearing on Capitol Hill, Food & Water Watch executive director Wenonah Hauter said in a statement that "Shaw's apology today rings hollow," coming as it did "after years spent pushing to roll back the very sorts of safety regulations that would have prevented an accident like this."
"If Norfolk Southern had real concern for the safety of the countless communities like East Palestine through which their trains run, they would be calling for more safety measures for the industry," said Hauter. "Instead they offer voluntary steps that can easily be undone, prioritizing profit margins over people."
