Norfolk Southern Corporation (NSC) announced very disappointing financial conditions this week that will affect the employment of many in the region.
The monetary concerns could mean even more layoffs by the local railroad. There are reports that as many as 2,000 jobs could be cut over the next four years.
The news has hit home as many in the Tug Valley area are employed by Norfolk Southern and many railroad employees have already been laid off at the Williamson yard.
Steve Hager, one of the local union representatives who works out of the Williamson yard, said that there are at least 40 who have been laid off in Williamson and more than 100 in the Pocahontas Division.
Norfolk Southern’s fourth-quarter profit reportedly slid 29 percent as the railroad delivered six (6) percent less freight. It plans to cut 2,000 jobs, or four (4) percent of its workforce, as it fends off a takeover bid from rival Canadian Pacific.
The Norfolk, Virginia railroad said Wednesday it will cut about 1,200 jobs this year and the rest by 2020. It also plans to reduce overtime costs, eliminate about 1,500 miles of little-used track and improve efficiency by upgrading its locomotive fleet.
“We have the right team and the right plan to address the current headwinds and deliver superior value as we move through 2016 and beyond,” said Jim Squires, who took over as Norfolk Southern’s top executive last summer.
In the fourth quarter, the railroad reported net income of $361 million, or $1.20 per share. That’s down from $511 million, or $1.64 per share, a year earlier.
The analysts surveyed by Zacks Investment Research expected earnings of $1.28 per share. The fourth quarter revenue fell 12 percent to $2.52 billion. Analysts expected $2.59 billion.
Norfolk Southern said restructuring costs of $31 million weighed down fourth-quarter profit 10 cents per share.
The additional cuts it plans should save about $130 million in 2016 and create more than $650 million in annual cost savings by 2020, the railroad said.
NSC executives have said they believe the railroad and its investors will fare better if it remains independent, so it has rejected Canadian Pacific’s roughly $30 billion offers.
U.S. Sen. Joe Manchin is calling for a Senate investigation into the purchase of a railroad that does substantial business in West Virginia.
At a press conference in Charleston Tuesday, the West Virginia Democrat announced he wants an immediate investigation into Canadian Pacific Railway’s plan to acquire Norfolk Southern; a transaction he says will profit Wall Street investors while potentially costing hundreds of jobs in West Virginia.
Manchin is insisting the details of the merger be thoroughly reviewed by the Senate Committee on Commerce, Science and Transportation before the transaction is allowed to proceed.
(Editor’s Note: The Associated Press contributed to this article. The WDN could not get figures on how many local railroaders have been furloughed at press time.0
(Kyle Lovern is the Managing Editor for the Williamson Daily News. He can be contacted at [email protected] or at 304-235-4242, ext. 2277 or on Twitter @KyleLovern.)