(The following article by Gregory Richards was posted on the Virginian-Pilot website on May 12.)
NORFOLK — Wick Moorman addressed Norfolk Southern Corp.’s shareholders meeting here Thursday for the first time as the railroad’s new chairman and chief executive officer. He couldn’t have picked a better time to make an entrance.
For the Norfolk-based railroad, 2005 was its most successful year, with earnings topping $1.3 billion, revenue of $8.5 billion, the movement of a record number of railcars and a stock dividend that increased 30 percent.
To top it all off, Norfolk Southern’s stock reached an all-time high Wednesday of $57.71 a share in intraday trading before settling at $57.35 each, putting shareholders in an especially good mood.
“I would not expect every annual meeting to have a new all-time stock price on the day before, but that’s a good thing when it happens,” Moorman said to laughs.
Norfolk Southern’s stock slipped Thursday with the rest of the stock market, down $1.34 to $56.01 a share.
Moorman told the gathering of 160 shareholders and company executives at the Tidewater Community College Roper Performing Arts Center downtown that he expects the strong performance of Norfolk
Southern – and all of the country’s freight railroads – in the p ast two years to continue.
“There is little doubt that we are seeing some structural shifts in the transportation marketplace,” said Moorman, also Norfolk Southern’s president. “However, I do want to point out that we will not know how deep and how significant these underlying changes really are until we see a soft patch in the economy.
“The good news today is that we don’t sense any weakness in the economy thus far. In 2006, we’ve been able to maintain our positive momentum.”
Moorman said a variety of factors are responsible for the railroad’s recent rebound, namely a strong national economy; a bevy of problems plaguing the competing trucking industry, such as high fuel prices, a shortage of truck drivers and congested highways; and a n increase in cargo moved through the East Coast ports that Norfolk Southern serves, including the port of Hampton Roads.
He also attributed the railroad’s business growth to efforts made to improve service and increase capacity, and pledged that those will continue. Moorman said new management plans have been rolled out and large investments made in technology, people and infrastructure.
Norfolk Southern also expects to be recognized Tuesday as the nation’s safest large railroad in 2005 with an E.H. Harriman Memorial Gold Medal, its 17th in a row. Moorman said the railroad redoubled its safety efforts after the January 2005 train disaster in Graniteville, S.C., which killed nine people.
Also at the meeting, Moorman was re-elected to Norfolk Southern’s Board of Directors, along with Daniel A. Carp, the former chairman and CEO of Eastman Kodak Co., and Steven F. Leer, the president and CEO of Arch Coal Inc., one of the country’s biggest coal producers. KPMG LLP was ratified as the railroad’s auditor.
One of the outgoing directors was David R. Goode, Norfolk Southern’s longtime leader. Goode turned over the chairman’s role to Moorman in February.
Several shareholders used a question-and-answer period after the formal meeting to pepper Moorman with questions, mainly about fuel efficiency, security and housing for employees.
One stockholder, a locomotive engineer from Atlanta, asked him why Norfolk Southern continued to buy large, gas-guzzling pickup s and sport utility vehicles while some other railroads have started switching to smaller, more environmentally friendly trucks and cars.
“I will commit to making sure that we take a hard look at this in our next round of vehicle purchases,” Moorman said.
John F. Murphy, a vice president with the International Brotherhood of Teamsters, queried Moorman about how well the railroad has readied its roughly 30,000 employees to deal with a terrorist attack. Murphy cited a Teamsters survey showing that many Norfolk Southern employees don’t feel prepared for such an event.
Moorman said he had not seen the survey but that the railroad has given its employees security training and it takes security issues “extraordinarily seriously.”
Jeffrey J. Bainter, Indiana legislative director for the BMWED, asked Moorman why Norfolk Southern is the only railroad that still uses converted railcars to shelter track repair workers overnight. He said the cars provide less room for employees than inmates get in federal prisons and that they are usually unhealthy and unsafe.
Moorman said he couldn’t comment on that issue because it’s one of the topics being discussed during ongoing contract talks with the railroad unions. Susan Terpay, a Norfolk Southern spokeswoman, later added that the railcars meet federal standards.