Norfolk Southern (NYSE:NSC)'s CEO, Alan Shaw, pledged to enhance safety across all levels of the company, following recommendations from an external consultant hired after a major derailment incident in Ohio in February. The announcement was made in a letter to the railroad's employees on Thursday, indicating that the organization would take several immediate steps to strengthen its response to any safety incidents.
The railroad industry has been under scrutiny since the derailment in East Palestine, Ohio, near the Pennsylvania border in February. Shaw emphasized the need to prevent similar accidents in the future and expressed his commitment to raise the bar for industry safety standards.
A report from Atkins Nuclear Secured, the consulting firm hired by Norfolk Southern after the incident, suggested that the company needed to improve its learning from safety incidents and continue hiring to fill critical shortages. The report also recommended reducing pressure on managers and coaching employees for improvement rather than disciplining them for minor concerns.
"Atkins found outstanding leaders at all levels devoted to safety," said Shaw, adding that it also praised Norfolk Southern's strong response to the East Palestine derailment. This included committing more than $74 million to the affected community and announcing a $4.3 million grant on Thursday to help overhaul the city's water treatment system.
Shaw highlighted that this report is just one of many steps towards improving safety on the railroad. He also noted that Atkins would continue recommending improvements over the next couple of years. Following the East Palestine derailment, Norfolk Southern had pledged to use technology to detect mechanical problems before they could cause further derailments.
Despite promising to join the Federal Railroad Administration's anonymous safety reporting system, major freight railroads like Norfolk Southern have yet to do so due to their desire to retain disciplinary rights under certain circumstances.
In addition, Norfolk Southern is working on repairing its strained relationships with unions by addressing concerns about demanding schedules and lack of resources. The consultant recommended the railroad to continue working with labor leaders to further improve safety.
Shaw plans to establish a new vice president role to encourage employees' suggestions on safety and operations improvements, despite fears of retribution. As part of an effort to boost morale, Norfolk Southern also pledged to make improvements to over 70 facilities across 22 states in the eastern United States.
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