(The following story by The Associated Press appeared on the Bloomberg Businesswekk website on July 29, 2010.)
Railroad Norfolk Southern Corp. said Tuesday it expects shipping volume growth to remain on pace throughout the year.
Shipments of vehicles and parts are up significantly from brutal levels a year ago. Sales in Norfolk Southern’s biggest category — general merchandise — which includes everything from lumber to cars, rose 31 percent to $1.3 billion.
Norfolk Southern CEO Wick Moorman discussed his forecast for U.S. auto shipments this year, in a conference call with analysts.
QUESTION: If I’m looking at your outlook for the back half of the year. You guys indicated that you are expecting volumes similar to the first half.
Is there anything different with regard to your automotive sector which you guys indicated is a positive outlook. Can you give us a sense of those expectations regarding volumes? And what the primary driver is for that — is it new business?
RESPONSE: “The automotive production for the year is still projected to be up 37 percent. Our business, even (with costs related to the) redesign of one of our customer vehicle networks, we are up 17 percent in the third quarter. If we back out the redesign, we are up 31 percent in the quarter. Looking ahead we see some new models coming out with large customers (like Ford) that we expect to handle increased volumes for in the second half.
For that reason, we moved the automotive sector from a neutral to a positive for the second half.”