In many ways, Norfolk Southern is a lot like its chief executive, Wick Moorman.
Charles W. “Wick” Moorman, Chairman, President and CEO of Norfolk Southern, provides the strong leadership that has enabled Norfolk Southern to make great strides in areas that are critical to the future of the railroad industry. In addition to performing solidly, controlling costs, improving productivity, and continuing to invest in growth capital in a recessionary economy, NS has excelled in technological innovation and development of public-private partnerships. Among the many examples of these accomplishments are the railroad’s development of a battery-electric locomotive, and opening of the Heartland Corridor, a major intermodal artery developed in partnership with several states. Norfolk Southern is strongly positioned for growth and is an example of why railroads are increasingly the mode of choice for the nation’s transportation needs. This is why Railway Age has chosen Wick Moorman as its 2011 Railroader of the Year.
Moorman is Railway Age’s 48th Railroader of the Year. He follows in the footsteps of several railroad industry icons from the Norfolk Southern, Norfolk & Western, and Southern railroads: Stephen C. Tobias (2008), David R. Goode (2005 and 1998), Arnold B. McKinnon (1990), W. Graham Claytor, Jr. (1989, at Amtrak), L. Stanley Crane (1974), and D. W. Brosnan (1964), the first Railroader of the Year. Moorman will be honored on March 15, 2011, at Chicago’s Union League Club.
Last month, at NS headquarters in downtown Norfolk, Railway Age Editor William C. Vantuono talked with the former trackworker who now presides over what is arguably the world’s best-run transportation enterprise, Norfolk Southern.
In part one of this three-part feature, Moorman talks about his roots at the Southern, and his path to chief executive of NS. In part two (p. 30), he discusses the Conrail integration, public-private partnerships, capital spending, and new-technology ventures. In part three (p. 44), Moorman talks about two areas of deep personal interest: communication with NS employees, and—most important—safety.
Railway Age: Congratulations. You are our 48th Railroader of the Year, and you follow in the footsteps of people like Bill Brosnan, Stanley Crane, Graham Clayor, Arnold McKinnon, David Goode, and Steve Tobias.
Wick Moorman: Thank you very much. I am extraordinarily flattered and pleased, not for myself, but for Norfolk Southern and the recognition Norfolk Southerners receive. This is a team game, and I’m just happy to represent our great team.
RA: There has always been a focus on management transition. The continuity is very impressive.
Moorman: That is, I think, one of the real strengths of our company, that you can name the people who have led it going back many years. They are some of the great names in railroad history. I know that when I found out that I was getting this job, it was in many ways a sobering experience. And one of the most sobering things was when I thought, oh, my goodness, this is the position that those men held, and they were great leaders. That great leadership has continued all the way up through the company. We have a terrific history, not only of leadership at the senior level, but all down through the company.
RA: How did you first get interested in the railroad business?
Moorman: The story I tell, which obviously is probably not true, is that my mother apparently dropped me when I was very young. I landed on my head, and when she picked me up, the only difference was that my brain had been slightly addled and I loved trains. I was always interested in the railroad business and always kind of a railfan, if you will. When I went off to Georgia Tech with the goal of becoming an engineer, I was extraordinarily fortunate because I went off as a co-op student where you work as you go through school. I was hired by the Southern Railway. And that was the first of just an unending number of strokes of good fortune and good luck that have happened to me throughout my career.
I started as an engineering co-op student in 1970 and did that while I went through Georgia Tech, and received a degree in civil engineering. Then I went to work for the Southern as a management trainee in 1975. I came out of the management trainee program and was then a track supervisor in a couple of locations, then an assistance division engineer, and then a division engineer in three locations. So, my first 12 years were in maintenance-of-way.
RA: As you know, it was the Southern under Bill Brosnan that started the mechanization of the maintenance-of-way function that really revolutionized the industry.
Moorman: Mr. Brosnan was a transformational figure in the history of the railroad industry. I was exposed to all of the early maintenance equipment. There was the introduction of information technology, where the Southern was also a leader—installation of the first microwave communications system in the railroad industry, the standardization and the introduction of process. Then there was the Big John hopper car, and the famous grain case. It was not just operations, but marketing. The Southern was a great company, as all of our predecessor companies were. And it was an interesting place to go to work because there was, even then, the feeling that we were trying to do new things all of the time, to change the way the business worked.
RA: When you started, the motto “Southern Gives a Green Light to Innovation” was in place.
Moorman: It had a tagline to it: “Southern gives a green light to innovations that squeeze the waste out of distribution.” We still have a lot of things that carried over from the early days. Everyone had a sign on their desk that said, “It can’t be done,” with a slash over the “t” in “can’t,” which I have in my office today. It was a great time. And I had a wonderful early part of my career in maintenance-of-way. I enjoyed it immensely.
RA: You enjoyed being out in all kinds of weather.
Moorman: One of the great things about maintenance-of-way I enjoyed so much was, there is really that tangible job satisfaction of going to a location and fixing something. And at the end of that day or that week, you look back and you see what you’ve done and you know you’ve made a difference, and you’ve improved the railroad. And you also work with so many wonderful people. I think track people are just usually great people.
RA: Would you say that being a track person is very in tune with human nature in that we humans like to build things, construct things, make things work, make things better?
Moorman: Certainly, with a certain subset of human beings, and particularly people who, like me, had something of a bent for engineering, too. That tangible job satisfaction was really a big part of it. I do like to be outside. The weather was inclement at times, but day in and day out, I really just enjoyed being out on the railroad, around the operation. It’s one of those things where it’s always interesting. You learn something every day. You’re never bored. It’s never the same. You may not enjoy every minute of it, but you’re always being challenged.
RA: What about some of your early career influences?
Moorman: One of the good fortunes I’ve had is the number of people who have taken an interest in me and mentored me along the way. Early on, I worked for a couple of division engineers, and then one of the line chiefs in particular, who was enormously supportive and helped teach me how to do things right, and taught me about the railroad and the work ethic. It gave me some of this esprit de corps that I think you get from working in this challenging but very interesting environment. I’ve been, all along the way, extraordinarily fortunate in people that I’ve worked with and for.
RA: You’ve held many positions in many disciplines. You have a very broad background, a very broad knowledge base.
Moorman: I do. And that, I think, has been one of the things that has made my career so much fun. And it’s also one of the things that I think helps me with the job that I have today. I’ve been fortunate enough to see a lot of different components of the railroad. I was in maintenance-of-way for 12 years, so I not only know it, but I have at least some feel for all of the operating division. And 90% of what our company does, in terms of the people we employ and the money we spend, is around the operating department. So, it’s very useful for me today to have some feel for the operating department. And in fact, I like to spend as much time as I can out on the railroad with the operating folks.
In the operating division, I spent some time in staff jobs in Atlanta, after graduate school, in stations and terminals and transportation planning. That gave me a different insight. And then my career really took an unexpected turn, unexpected to me, kind of, where out of the blue, I was promoted to Vice President of Personnel and Labor Relations—maybe the single biggest surprise I’ve ever had. I didn’t know I was being considered. I didn’t even know the job was open. I was in Atlanta, and Arnold McKinnon called me up one day and said, congratulations, the board has elected you Vice President of Personnel and Labor Relations. I’d been told to call his office. And I was thinking—Arnold and I didn’t talk a lot—that something bad might happen. So I was just in shock. He told me later that I asked him three times during the conversation if he was kidding. But, it just happened to be a right-time, right-place set of circumstances. I did that for a year and a half.
One of the things that I initiated in that job—and the timing was right—was an early retirement program. The head of IT retired, along with two of his three principal reports. And he and I both reported to the same executive vice president, a fellow named Tom Sheller, who was a great mentor to me. Tom called me and said, I think I want you to go to IT. I kind of thought that might be coming. But at the time, really, all I knew about IT was control/alt/delete. And I did that for six years. It was just a wonderful learning experience, and gave me much more of an understanding of what technology is, what technology can do for our company.
I ran IT through the Conrail transition and all the way up to just short of Y2K, so we had a lot to do. It was fun and interesting. I then went and did this little telecom startup called TCubed. We were there for one great year and then the market collapsed, so that was fun on the way up and somewhat harrowing on the way down. But it taught me some valuable lessons, too, about risk management, and in a very real sense about when enterprises don’t work out the way you expect them to and fail. After that, I did some strategic planning work.
The advantage of that, in terms of my background, I think, was very, very helpful. And mine was somewhat serendipitous, really—right time, right place. Mine wasn’t the typical career path at Norfolk Southern.
One of the things that we have really focused on since I got this job is trying to make more and more opportunities available to our people—those who we think are on the way up, in terms of these cross-functional kinds of moves, even if it’s just for a year or two, to go out in the operating department and see what it’s like to be a trainmaster, and then come back to whatever function you are. You’ll be better, as a result. We keep pushing on that kind of opportunity today.
RA: What you’ve described seems to be along the lines of more horizontal integration, rather than the railroad being operated as silos where each department is an entity unto itself and the left hand doesn’t necessarily know what the right hand is doing. We’ve seen that for the past 20-30 years, especially since deregulation.
Moorman: I think it’s immensely useful and immensely important to really try to strengthen those horizontal ties, not only through giving people opportunities to move across departments, but also in terms of some other things we do.
For example, we have an educational process we call T-School, Thoroughbred School, where we bring people in from all across the railroad, all different levels, about 70 at a time. They go through four days of a really interesting and I think fun educational process about what Norfolk Southern is and how it works—all of the moving pieces—and how we think about where the company is going. Part of the strength of that, clearly, is the educational process. But the other part is that we create these bonds, these horizontal bonds, between people, which ultimately are an enormous source of strength for the company.
“We’re convinced we have a very bright future”
Following the difficult integration of Conrail in the late 1990s, Norfolk Southern has increased its geographic reach and grown market share by forging partnerships with other railroads, and with state governments in its operating territories. Underlying that is a strong, growth-focused capital investment program that did not significantly let up during the recession, and which will increase this year. Add to that an emphasis on adopting new and innovative technologies.
Railway Age: Let’s talk about your experience during the Conrail integration. At the time you were running the information technology department.
Moorman: It was difficult—I’m still in therapy. Really, it was an extraordinarily interesting and challenging time. We had our share of technology problems, as did—I’ll say in fairness to Norfolk Southern—the other big rail mergers of that era. I’m not sure that the phrase “successful large railroad merger” isn’t an oxymoron in some sense. They’re just extraordinarily difficult to do. And the challenge that we and CSX had was really, in retrospect, almost impossible, which was take a big functioning railroad and split it in half on the run at 12:01 a.m., June 1, 1999.
We had our share of IT issues, to some extent, precipitated by decisions that we had to make. From an IT perspective, we would have pushed it back some more. But when January 1, 2000 and the Y2K problem was also staring you in the face—another potentially huge problem, and a problem that we did an enormous amount of work on, as did the rest of the world—that was about as late as we could go. And it required us to do a lot of integration between our existing systems and the Conrail transportation system, which was antiquated, to say the least.There was a lot of stuff that we really didn’t quite figure out, down in its bowels, until split date came.
So, without belaboring this, it was an enormously complex technical challenge, unlike anyone else has tried to do before or since. It was, again, a great learning experience, if you will. And interestingly enough, our current Vice President of Information Technology, Tom Warner, was a consultant for us on that project. And one of his two assistant vice presidents, Carol Lawrence, was a director of IT at Conrail. So, one of the things that came out of this merger—not just in IT, incidentally—was that we got a real influx of talent into Norfolk Southern that really wasn’t something we would have necessarily predicted.
Similarly, if you look in our operating department today, we have three general managers, three regions on the railroad, each one run by a general manager. Two of the three came from Conrail. So, that was one of the great benefits we received from the acquisition.
I recently had a conversation with someone who I know well at CSX. And as we occasionally do, we started talking about those eventful years. We both agreed that it was a lot of pain and a lot of expense, but we’re all very glad that we did it.
RA: In the final analysis, it all worked out.
Moorman:: It worked very well. And the northern region of our company is an extraordinarily important part of our franchise today, with great people that run it.
RA: Now, rather than mergers, we’re seeing more strategic partnerships.
Moorman: We have a corridor strategy that involves partnerships with other railroads, and enhances our own infrastructure—things like the Heartland and Crescent corridors, and what we call Pan Am Southern, with the Pan Am Railway. It’s driven by the fact that railroads are essential franchise businesses. Your franchise determines what you haul and who you serve and where you go.
Although I’m only one person in this industry, I don’t believe that we’re going to see any kind of major merger transaction any time soon. I’ve got my list of reasons why I don’t think that will happen. Hopefully, I won’t be proved wrong. So, if that’s not going to happen, what else can you do around your franchise? And the core NS franchise is a great franchise, and we’ve been successful for a long time.
But there are places and business opportunities where we think, if we do a development project, it’ll just strengthen our franchise that much more. And a great example of that is the Crescent Corridor, the megaproject that parallels probably the last major freight route in this country, or one of the last two or three. It has not been significantly attacked, if you will, by intermodal rail freight. And there are a number of reasons why that is. It’s a corridor that we serve extraordinarily well. We’re the railroad in that corridor, and it’s a market where there are between five and six million truckloads a year. So, it’s a target-rich environment. Strengthening that corridor, in terms of terminals, more infrastructure for capacity, speed improvements: We think we can go out, and over some period of some years, really take on a lot more business on our property.
RA: For 2011, you’ve increased the capital budget. Where is a lot of that going to be applied? What sorts of projects?
Moorman: Your first point is really the important point, and it’s important not just for Norfolk Southern, but really for the rail industry, because nobody slacked up a lot. We all cut back a little, but everybody in the industry continued to invest. And that is, I think, because we’re all convinced that we have a very bright future and we need to continue to invest, to ensure that bright future.
If you look at our 2010 capital budget, it’s about a billion and a half. 2011 will be higher, driven by three or four things. We’re making a substantial investment in SAP, which will replace some of our financial systems, our material management systems, and all our HR systems. We’ll finish that in 2011. We’re going to start buying coal cars again. We have an aging coal car fleet. And there are reasons why our business demands are such that we need to own a substantial portion of our coal car fleet for things like the export coal traffic, and some of the utility coal business.
We bought about 3,000 new cars in the past four years. We didn’t buy any in 2010, didn’t buy any in 2009. We’ll go back in the market this year for coal cars. We’re buying some additional locomotives. We’ve committed to 50 new locomotives—25 GE, 25 EMD. We’re working with Caterpillar/Progress Rail Services on some interesting locomotive technology, and we’re going to acquire a few more of that technology, too.
We are also going to go out and buy some other equipment that we have historically leased. But we have the wherewithal to purchase it, should we choose. We’ve done the economics, and this is equipment that we are highly confident that we’ll use for its entire useful life. As long as there’s a railroad, we’ll be using this kind of equipment, and it makes terrific economic sense to buy rather than lease.
RA: What type of equipment?
We’re talking about some cars that are probably going to be out in the intermodal market, and containers and some things like that. We’ve been buying some containers all along. We haven’t finalized all of that. We’ll publically announce what we’re doing at our Analyst Call this month. But, you’ll see a substantially bigger capital budget this year for those reasons. And we continue, obviously, to invest in infrastructure. We’ll have very strong rail and crosstie programs and all of those things.
RA: And a substantial amount will have to go, unless things change, toward PTC.
Moorman: PTC is a big number next year, too. That’s the other big driver of it.
RA: Do you see any loosening of PTC, maybe extending the deadline further?
Moorman: I don’t know what’s going to be possible. We’re certainly having conversations about that within the industry. As you know, we’re very disappointed with some of the ways that the FRA has interpreted the regulations in terms of the hazmat data, the map. Which date do you use—2008 or 2015? We’re very concerned about this two-screen requirement that seems to have materialized—wasn’t in the regs, and wasn’t in the law—and we don’t see any rational need for it.
Beyond that, I certainly would like to see us be able to do something in terms of not only maybe extending the date for some of the network, not necessarily all of it, but also do what should have been done from the beginning, and that is look at all of the possible risk mitigation strategies for handling TIH. I firmly believe that there are lines where we can do other things, in terms of operational practices or maybe less expensive technology, that will give us the same risk reduction that PTC will. PTC certainly accomplishes certain things, in terms of reducing accidents, but there are a lot of accidents where it doesn’t do anything. PTC would not have prevented a significant number of the TIH releases that have occurred, so why not take a look at all of this rather than push a technology on us that is not really quite proven for the primetime, in terms of running a railroad, and is $22 in costs for every dollar in benefit? And that’s not the odds you want when you make these kinds of investments. I don’t know what’s going to be possible legislatively, and it would obviously require legislation.
RA: In terms of technology, let’s talk about some of the ones with a good return. A lot of innovative things are happening on the mechanical side.
Moorman: We continue to believe in technology. Our company has been a technology leader in the industry for a long time, although I give a lot of credit to the other carriers that are also pushing the envelope in various directions. But, when we look at what we’re investing in and some of the technology that I think makes a difference, the first thing I would say is the genset technology, which originated on the Union Pacific, and all credit to them. We’ve been working with Caterpillar on a genset road locomotive—the PR43B. We’ve got three of them out there testing. They look pretty good.
We invest a lot in our shops at Altoona, in terms of locomotive rebuilding, and innovative rebuild designs. We’re trying to push the envelope there. We have shown that we can effectively do a frame-up rebuild of a locomotive and create a like-new model, if you will, for a substantially lower capital investment. We’re going to continue to work on that. We’ve got a significant number of rebuilds at Altoona.
When I talk about things that came out of the Conrail transaction that we weren’t quite sure would be that good, Altoona is a great example. It is an absolute jewel and a great advantage to our company to have the capabilities and the workforce that we do in Altoona.
Our electric, battery-powered locomotive is clearly a test bed. The real thing we’re working through, and we’re on the second generation now, is a battery management system. How do you make sure that this host of batteries discharges at an equal level and then recharges at an equal level, which is a non-trivial problem? We’re also looking at recharging them off dynamic breaking. One of the visions we have long-term, and Altoona is a great example of it, is putting one of these battery locomotives—all-battery slugs, if you will—between two road locomotives, and you go up the mountain at Altoona with the battery locomotive churning away, adding to the horsepower. And then you go all the way down the hill on the other side and charge it back up. That’s a territory where we’re pushing a lot of trains in both directions. So, maybe we can do some innovative things there.
The LEADER technology, which we’ve been working on for a while with New York Air Brake, is now going in across the northern region. We’re going to see significant fuel savings there. We’ve really gotten much more aggressive on top-of-rail lubrication, in terms of reducing rail wear and saving fuel. I convinced our research and test guys to run our own little homemade back-of-the-envelope test to validate in a rough way what we’d seen at FAST (at TTCI). And the validation was there. There are fuel savings in that kind of territory.
The latest thing is the Movement Planner technology that’s tied in with the installation of our new GE UTCS dispatching system. I was a little bit of a skeptic that Movement Planner could help us that much, but we’re seeing substantial, meaningful increases in velocity—a couple of miles an hour in average velocity. It’s going to translate to more capacity and fuel savings. And more capacity ultimately translates into having to put less capital out there. So, this is very strong technology. We’re doing a lot and we’re trying to always look for other places to do more.
RA: Any thought to electrification? Providing the right-of-way to wind farms, electric power grids, drawing off that?
Moorman: We’ve looked at it. I don’t discount the idea that it might happen at some time or another.
The problem with electrification—well, there are two or three. The first is just the enormous cost of putting up the catenary. Once you get going, the operating costs are pretty good, particularly, where you can regenerate power back into the grid when you’re in dynamic brake. You also have, obviously, the cost of the locomotive technology. You can’t just put electrification in a heavy territory in the middle of the railroad, where you’ve got to change locomotives at one end and change them again at the other. The only way it makes sense is with a long corridor. Having said that, we have rights-of way that are important, in a world where it’s getting harder and harder to assemble rights-of-way. We have an enormous need for a new, smart electrical grid in this country. And we do have places like West Texas and elsewhere where the wind blows and the sun shines, and there’s a lot of power opportunity but no way to get it back to where we need it. We’re certainly open to it, but it’s a ways off.
“The railroads have a great story to tell”
One of Norfolk Southern’s hallmarks is the emphasis the company places on communicating—with employees, with the public—and making management accessible to employees. Here, Wick Moorman talks about internal communications and their effect on the railroad’s exemplary safety record. He also discusses how Norfolk Southern is presenting its public face—especially important in these times of fickle Capitol Hill politics.
Railway Age: This is the new railway age. But it really is the information age. Information ties everything together.
Moorman: We have so much better data about what we do and what’s going on. We try to make that data available to lots and lots of people. So, for the past number of years, if you work in a yard, you see on a weekly basis how that yard is doing in terms of ontime arrivals and departures and connections made, and things like that. And we can drill down even further. We have NSTV now, which we’re rolling out in a lot of places. We’re putting video monitors in our terminals. We’ll eventually put them in crew reporting locations. We can offer not only local information, with local content, but also NS content, including what we tell the analysts. And then there are our internal publications, and a lot of focus, obviously, on safety.
I believe so strongly that you can’t communicate enough. And in fact, if I spent all day, every day, talking to every person on this railroad, and then ran a survey on what they need, they’d still say more communication. You just can’t do enough of it. The great thing about technology, is that we can do so much more of it. And a lot of the focus of our corporate communications people is just that—how do we get information out to everyone on the railroad? Everyone on the railroad has the right to know everything, really, that I know, in terms of what the company is doing, where we’re trying to go, and how we’re trying to get there.
RA: Norfolk Southern is getting into social media with Facebook and Twitter. That’s really a great outreach tool to the public.
Moorman: We’re trying to do that in terms of getting out our messages about things like regulation. The railroads have a great story to tell, and the more people in the general public that hear it, the more support we have.
We do run, as part of our internal network, a mechanism called “Ask Wick,” where employees can send in questions of any kind. They come straight to my email inbox and I try to answer as many as I can. I get all kinds of questions, as you might imagine, some of which are specific to an employee, but some of which are general. Anything that’s general, we try to post the answer on our website for everyone to see. It’s interesting. A lot of people tell me they like that a lot. I would say that 90%-plus of the questions I get are from our agreement workforce. There are a certain number that have a little edge to them. But edge or not, one of the great things for me is it’s just another way to hear what’s going on out on the railroad and what people are thinking, in an unvarnished way. We use every medium we can to get out there.
RA: If agreement employees receive a personal response from you, do they feel more connected that you’re not some person sitting in an ivory tower who doesn’t know who they are?
Moorman: Yes. We have about 28,500 employees, and I’ve told our people, my goal is to shake everyone’s hand. I’m only about 5,000 or 6,000 into that. When we go out, we have open sessions with employees. Whatever questions they have, whatever they’re hearing, whatever advice they have, if they have heard any rumors—we try to talk about everything that’s going on. And the more we do that, the stronger our company is. It’s just that simple.
RA: How much time do you spend out in the field?
Moorman: Every week is different. On our inspection trips, we make a point of stopping in a lot of places and talking to people. It’s substantial, to the extent that I have the ability to manipulate my schedule and focus my time on the things that I think are important. That’s really a place where I try to focus a lot of my time.
RA: Safety: How many Harriman Awards in a row now?
Moorman: Twenty-one. They retired the word “unprecedented” about 15 years ago. But it is a great accomplishment. The 21 Harrimans are the strongest indication that I could ever site for just how great our team is. It’s a remarkable record, because what that means is, for the past 21 years, we have been absolutely and resolutely focused on safety, and on the safety of our operations and of the communities we serve and the safety of the operations of our customers, as well.
When I go out in the field, the first thing I talk about is safety. It’s not because people haven’t heard it before, because we all talk about safety, every day. It’s the message that everyone has to keep focused on all the time, because a moment’s inattention can lead to an injury. My message to everyone is always that, when we think about safety, it’s the foundation of how we do everything in this company. And we do it for one reason, really, and one reason only: I, personally—and I think everyone in this company feels the same way—can think of no stronger obligation that we all have than to make sure that we and our coworkers go home safe at the end of every work assignment.
You can site a lot of other great benefits, in terms of what safety does for business and what it does in terms of our workforce being able to focus on the other important things out there, like service. But we do it because we want to make sure that everyone goes home safely. That’s the simple truth.
RA: An aging workforce, attracting new employees, recruiting: Every CEO that I’ve spoken with, including you in previous interviews, has talked about the need to bring new talent into the industry, but more important, keeping that talent and getting people interested in railroading as a viable career, like the football player (Keith Fitzhugh) who would rather be running trains than sacking quarterbacks.
Moorman: Yes, that’s a fascinating story, obviously. But I think it’s an indication that there are a lot of people who view us as a very desirable, stable employer with excellent pay and benefits. We don’t have an enormous amount of trouble attracting talented people to the railroad. The only significant issue the people have to work their way through are the lifestyle issues, particularly in the field, both in the agreement ranks and the non-agreement ranks, because it’s not easy. It’s challenging, it’s rewarding, it’s interesting, but we never tell anyone it’s easy, because it’s not. We have done an enormous amount of hiring in the past five or six years, and we’re back hiring now.
We’ll end up hiring 2,500 people or so this year. So, we’re back in the market hiring. Our demographics in a lot of areas, in the train and engine service workforce, for example, look better than they did five years ago, when they just looked terrible. But we’re still like every other American company. We’ve got workforce demographic issues to work through. We’ve hired some really terrific people as management trainees in the past five or six years. We’ve promoted a lot more supervisors from the ranks. And we’ve got a very strong supervisory workforce.
Every once in a while, I’ll be out on an inspection trip and I’ll look around and see a 28-year-old trainmaster and other folks like that, and I’ll think, this place is being run by children. It’s not. It’s being run by competent, smart young people. What I have to remember is that when I was 28, I was an assistant division engineer, and there were probably a lot of people looking at me saying, well, how on earth can he do that? Fact of the matter is, these young people do great.
I feel very confident that we’re going to be able to continue to hire and train and retain the skilled workforce that we need going forward, and we’re putting in an enormous amount of effort in that. We’ve redesigned our training programs and put in new programs. We’re focused on managing our way through this cycle of the demographics of the aging workforce that we’ve been living with for a while now.
When I was asked when it first became apparent I was going to get this job, I had some people, mostly in the financial analyst community ask, what do you think your legacy will be? My response was, I have no idea. But it did make me think. If we can manage our way through what our demographics looked like five years ago, when I became CEO, and at the end of my tenure here, however long that is, we have a workforce that is equally talented, and of an age to carry the company forward, I think that, in and of itself, would be a reasonable legacy, because it is a formidable challenge to manage.
RA: What about the shift in power in Washington?
Moorman: The prospects for legislation that would be really detrimental to our industry are significantly lower than they were. We had a situation for the past couple of years where we had not only a Democratic House and a Democratic Senate, but we had the two leaders of the committees of jurisdiction who were committed to doing things that would have been highly negative to our industry. The good thing about it is that they really didn’t even have much support on their own committees, let alone in the entire Congress, because the railroads are viewed, I think, as an industry that needs to be doing more.
People understand that diminishing our likelihood of an adequate return on capital is not going to lead to further investment in our industry. In general, one of the things that’s really shifted in the past 10 years is the public policy attitude toward our industry. We are viewed by a lot of people now, quite rightly, as one of the real solutions to a lot of this country’s transportation problems.
So, the prospects for negative legislation are dimmer. There’s still at least some concern on the regulatory side, in terms of what the STB might do. Yes, the STB has been under pressure from Senator Rockefeller to become proactive. He would like it to do things to the industry that he has not been able to accomplish legislatively. That does create some concern for us, and we’re going to be very focused on telling our story to the STB. “Eternal vigilance is the price of freedom” could be paraphrased to fit our industry: Eternal vigilance is what we need in order to make sure that our industry can be successful.
RA: Would you say the Obama Administration is railroad friendly? What is it trying to accomplish?
Moorman: One of the remarkable things as part of this sea change is that we do have an Administration that is clearly rail-friendly, that knows the word “railroad,” and thinks that passenger and freight rail are critically important. That’s an enormous step forward for us. We’ll always have policy differences and issues we need to work out. But I applaud what the Administration and Secretary LaHood have done in terms of talking about the advantages and the long-term benefits of rail transportation. It’s counter to this idea that somehow the railroads need to be reigned in, that we’re making too much money.
RA: What message do you have for your suppliers?
Moorman: The industry is blessed with great people in the supply industry, dedicated to making improvements in their product. We’re all a big team. It has been tough on the supply industry. The good news is that we have a lot of confidence in the future, and that we’re going to continue investing in all parts of our business. Better times are ahead for everyone. The other message is, continue to stay engaged with us. How can we work together to improve your products? How can we be easier to deal with and make use of what you have? How do we continue to drive the industry forward in terms of efficiencies and making us a stronger industry as a whole?