Nine months after Alan Shaw took over as CEO of Norfolk Southern, a train derailed in East Palestine, Ohio, which has come to define his leadership of the company.
And now, almost a year after the February 3, 2023 derailment, Shaw told a small gaggle of local media reporters in East Palestine that the company is safer than it has ever been, that it’s fulfilled all of the commitments it has made so far and that it’s continuing to work to bring the village of East Palestine back to life.
“The key message is, since day one: We made a lot of promises and we've kept our promises and we understand there's more work to be done.”
In the immediate aftermath, Shaw said, he didn’t exactly know what the company was getting into. “I knew that we could bring Norfolk seller's resources to bear,” he said. “I also knew that we needed to listen. We needed to listen to the community and let the community help direct our efforts and where our resources went.”
The company has since committed more than $100 million to East Palestine. That includes $25 million for a regional safety training center for the company that Shaw said will draw workers from across the country to the town. And it includes $25 million in planned improvements to East Palestine’s park. The company also paid $9 million to local first responders, including to replace equipment that was no longer usable after the derailment.
The company set aside $2 million for the community to select projects and another $500,000 to promote economic development. It has also purchased two buildings in town, one of which was an abandoned old car dealership that it is renovating into its East Palestine headquarters. The company is also helping to restore the town’s old train depot and donating it to the town.
The company has paid $21 million directly to residents. Initially the company paid residents $1,000 each for the inconvenience and the company also promised to pay businesses and workers, such as restaurant wait staff, who saw their incomes decline the year after the derailment.
Norfolk Southern set up a program to pay relocation fees while it cleaned up contamination at the crash site. That cleanup work ended in October, Shaw said, and so the company is ending its relocation assistance program next month. The end of this program will impact 50 families who have continued to live outside of East Palestine, Shaw said. Three people have also been charged with trying to defraud the company by lying to them about assistance they were given.
The company is now preparing to backfill the pits near the derailment site where contaminated soil was dug up and shipped away. And the company is working with landowners to decide whether they want the cleanup sites covered in plants or parking lots.
Two large water treatment tanks continue to operate at the derailment site on Taggart Street — which reopened to traffic in October — and the company continues to divert stream water around it. Norfolk Southern continues to monitor two streams where there have been reports of contamination, Shaw said.
“We're working under the oversight of the EPA and Ohio EPA,” he said. “We've completed the first phase of testing and assessments. We're working on next steps. We have already cleaned out five culverts.”
The company has committed $4.3 million to provide enhanced filtration to East Palestine’s drinking water.
“The testing that's come back to date — there's been thousands of tests and millions of data points — they've all said that the air is safe to breathe and the water is safe to drink,” he said. “But we're also setting up ongoing water monitoring and testing as well.”
A Long-term Health Fund
As many of the most acute health symptoms in town have long-since subsided, residents have turned their attention to potential long-term impacts. Shaw said the company is still working with various stakeholders to develop a health fund. In the meantime, he said, Norfolk Southern would pay for residents who have health concerns to go to the doctor.
“It takes time,” Shaw said. “As you can imagine, there's a lot of interested parties, a lot of relevant key stakeholders, and we're working with them to make sure that we incorporate their needs into this long-term health fund.”
The company has agreed to pay the difference to any residents whose homes sell for less than they were worth before the derailment. So far, Shaw said, nine of the 72 properties that have sold since the derailment have taken advantage of the program.
Norfolk Southern has invested around $1 million in the area schools, which saw a drop in enrollment after the derailment and had to teach some students remotely. The company spent more than $500,000 on a resilience center to help with mental health challenges from the derailment.
Safety Concerns
The National Transportation Safety Board identified a defective wheel bearing from one of the cars as the cause of the accident. And Shaw said that this is why he continues to support some additional federal train safety regulations that would require everyone in the industry to meet higher standards — though those additional regulations haven’t progressed out of Congress.
“When you look at the NTSB report, which shows that the crew did everything they were supposed to do, that Norfolk Southern’s technology worked as designed, there were no track defects,” he said. “The NTSB report is looking at a failed wheel bearing on a car that no railroad owns. That was a customer-owned car. It shows me that we need an industry-wide solution.”
Shaw said Norfolk Southern continues to improve its safety efforts. The company has hired around 1,600 new employees over two years, including many conductors and engineers. The company has begun installing additional hot-box detectors, which can detect the kind of malfunction that led to the accident, including detectors on each side of East Palestine. The increased emphasis on safety is paying off, he said: main line derailments were down 40% in 2023.
“So that's another promise made, promise kept,” he said. “We said we're going to make a safe railroad even safer and we did.”
The company is now working with the Georgia Tech Research Institute to invest in new “safety sheds” with 38 cameras on them, Shaw said. The cameras would take a thousand pictures of each rail car and utilize AI to identify potential safety hazards. Shaw said the plan would be to first deploy these near key hubs, such as the Conway rail yard outside of Pittsburgh.
“We have kept every promise that we've made,” Shaw said. “We've acknowledged there's more work to be done. We're committed to doing more.”
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