Norfolk Southern Chief Executive Officer Wick Moorman told shareholders at their annual meeting in Williamsburg, Va., Thursday that the “longer-term prospects for Norfolk Southern and the rail industry remain very bright.”
He also said that “against the backdrop of an improving economy, the stage is set for a good 2010.”
“Overall, our first-quarter 2010 performance reflects the strength of our high-value transportation product and operating efficiency, and provides a strong platform from which to build momentum throughout the remainder of this year,” said Moorman.
“On the negative side,” said Moorman, “we are still engaged in defending against the long-running initiative by a small, but well-funded, group of rail shippers who are attempting to alter the economic regulatory regime which governs us so as to lower their rates, and at the same time seriously damage our ability to earn adequate returns for you, our shareholders, and invest in the future.
“These shipper-representatives are cynical and short-sighted in trying to manipulate the system to their advantage, while at the same time complaining loudly about government interference in their own businesses. Fortunately, this is neither a public issue nor a partisan one, and relatively few congressmen support any significant changes, although unfortunately for us, a couple of those who do hold key committee chairmanships. The industry has been working with the Senate Commerce Committee for well over a year now to try to find common ground. The Commerce Committee has produced a bill which causes grave concern, but they want our support and we are continuing the dialogue with them. At the end of the day, I still believe that a bill that’s fundamentally bad for our industry cannot be passed.
“The second really bad thing that Washington has done to us is to mandate the installation of Positive Train Control, or PTC, technology by the end of 2015. I don’t want to say much about PTC., so I’ll just remark that other than the mandate being unfunded, the technology unproven for heavy mainline operations, the estimated NPV cost of installation of the system estimated to be $10 billion, and the government’s own estimate that every $22 of cost will yield $1 of benefits, it’s really not such a bad idea. It is a legislated mandate,so all we can do is argue for changes in the legislation. We’re gettinga lot of sympathy, but it’s unclear how that will manifest itself in votes.”
In official business, a long-term executive incentive compensation plan was approved and a stockholder proposal concerning disclosure of political corporate contributions was turned down.
Moorman’s complete remarks and a related video are posted on the Norfolk Southern website. View by clicking HERE.