(The following article by Don Phillips was published in the February 1 issue of the Washington Post.)
WASHINGTON, D.C. — CSX Corp.’s board of directors yesterday named President Michael J. Ward to succeed John W. Snow as chairman and chief executive, replacing a man steeped in the ways of government and politics with a lifelong railroad man.
Snow, confirmed as Treasury secretary Thursday night, had tapped Ward as his successor. Yesterday’s board vote, by telephone, formally ratified a decision made weeks ago.
Ward, 52, is a Baltimore native who received an undergraduate degree from the University of Maryland in 1972 and a master’s degree in business administration from Harvard in 1976. He has spent his entire career of nearly 26 years with the railroad, unlike Snow, who had a career in law and government before being tapped as a CSX vice president in 1977.
Ward, who is expected to move CSX’s corporate headquarters from Richmond to the current railroad headquarters in Jacksonville, Fla., said in an interview that he will concentrate on running an efficient railroad and on improving customer service, and will spend about $1 billion a year to continue improving CSX’s track structure. The Federal Railroad Administration twice issued special reports in the late 1990s harshly criticizing CSX’s track maintenance and safety record.
“There was a reason there was an FRA audit several years ago,” Ward said.
Ward noted that he has effectively been in charge of the railroad since April 11, 2000, when he was named executive vice president of operations, and that measurements such as on-time operations had improved since then. Reportable accidents decreased 18 percent in 2002 and 39 percent in 2001, he said.
However, Ward offered no encouragement for commuter agencies, such as Maryland Rail Commuter Service (MARC) and Virginia Railway Express, which want to expand passenger train operations on CSX tracks. Ward said government agencies would have to pay for all improvements necessary to allow more commuter operations without interfering with freight operations.
Virginia already is spending a significant amount for increased VRE capacity, but Maryland and CSX have sparred over how to pay for more MARC service.
Ward said CSX has an obligation to run Amtrak and commuter trains efficiently and on time. He noted that on-time performance of commuter trains has been “97, 98, 99 percent” in the past few months.
“But they can’t suck up all our capacity with passenger trains, which are not very remunerative,” Ward said. “They must come with their own capacity. They can’t interfere with freight.”
Ward said passenger trains are something CSX “must do well,” but he added: “We don’t make any money on them. The fees are not worth the priority they get.”
He also discouraged talk of increasing the height and width of the Howard Street Tunnel in Baltimore and the Virginia Avenue Tunnel in Southeast Washington.
Maryland officials have long wanted more clearance in the tunnels to allow the Port of Baltimore access to “double stack” trains, in which freight containers are stacked two deep on flatcars. This type of service, which has become a norm for shipping containers from ports nationwide, can save up to 40 percent in shipping costs. Without the ability to use double stacking, Maryland officials see the port as being at a big disadvantage to ports in the New York area and Norfolk.
Ward said most double-stack trains “want to go to the West,” where CSX facilities already have enough clearance. He said CSX has found that more efficient operations on its north-south lanes mean clearance “is not a tremendous hindrance” to freight flow.
“This [double-stack clearance] is not a big issue as we grow this business,” Ward said. “I don’t expect to see it anytime soon.”Ward said he’ll work to attract truck traffic to the railroad through better service.
He wants to make greater use of computers aboard trains and remote-control switching locomotives, and said a goal will be to win the prestigious Harriman Award for rail safety within “a year or so.” Norfolk Southern Corp., with one of the best safety records of any industrial corporation, has held the award for almost a decade and a half.