Norfolk Southern’s Push for Profits Jeopardizes Safety, Workers Say

Norfolk Southern once had so few accidents and injuries that it won the railroad industry’s prestigious EH Harriman safety award 23 years in a row until it was retired in 2012. But over the past decade, the company has gone from an industry leader to a laggard.

The rate at which its trains are involved in accidents and its workers are injured on the job has skyrocketed, placing it at or near the bottom on these safety measures among the nation’s four largest freight railroads. Employees, former workers and some rail experts blame decisions by managers to cut thousands of jobs and put pressure on employees to speed up deliveries in a bid to boost profits.

Lance Johnston is among the critics. Mr. Johnston was a Norfolk Southern engineer, or train driver, in St. Louis area for over 25 years until he was fired after a dispute in 2021 with his manager over problems with a train’s brakes.

That July, he said, he started a shift at AO Smith’s rail yard in Granite City, Illinois, across the Mississippi River from St. Louis, and discovered that his locomotive had defective brakes. After notifying a supervisor of the problem, Johnston said, he was told to use the locomotive, even though the defect violated Norfolk Southern regulations and could, he said, make it difficult to control the train and even lead to a derailment.

“When the equipment is defective, the equipment is defective,” he said in an interview last week. “You stop what you’re doing and you fix it.”

Norfolk Southern’s operations have been under federal scrutiny since one of its hazardous materials trains derailed in February in East Palestine, Ohio. Johnston said he believed business had really started to deteriorate about four years ago, around the time the company said it would implement efficiency measures known in the industry as precision-planned rail. He said the cuts meant there were not enough people to repair and maintain trains.

Since 2012, the size of Norfolk Southern’s workforce has shrunk by 39 percent, a larger decline than any of the other three major U.S. freight railroads — BNSF, CSX and Union Pacific. Meanwhile, Norfolk Southern’s accident rate, which measures the number of accidents against the miles traveled by a company’s trains, rose 80 percent, by far the largest increase among the four railroads, although Union Pacific’s rate has consistently been higher. Railway accidents include derailments, collisions and fires.

Norfolk Southern’s on-duty employee injury rate has also risen, and over the past 10 years has averaged significantly worse than those recorded by the other three major U.S. railroads. The injury rate improved last year and is better than that of other railroads, including Canadian companies that operate trains in the United States.

“It is my goal to work with our new operations leadership team, union leadership and our front-line employees to further strengthen Norfolk Southern’s safety culture and make it the best in the industry,” CEO Alan H. Shaw said in a statement.

He added that Norfolk Southern’s derailments last year were the fewest in 20 years and the injury rate was the lowest in 10 years. A railroad representative said its accident rate had increased in part because trains now traveled fewer miles.

Mr. Johnston said the safety concerns he had raised were particularly important because the trains he had typically worked on traveled through residential areas in St. Louis area. (The train that derailed in East Palestine started at a neighboring railroad yard in Illinois.)

Mr. Johnston was fired shortly after the dispute and has filed a whistle-blower report with the Labor Department’s Occupational Safety and Health Administration claiming he was fired for raising a safety issue.

Norfolk Southern declined to comment on Johnston’s OSHA case and his account of his firing. In a letter to OSHA, a lawyer representing the company said it had fired Johnston for “inappropriate” behavior based on an “insubordinate, threatening and profane outburst against his boss.”

Since 2018, Norfolk Southern workers and former employees have filed 267 whistle-blower complaints with OSHA, the most of any major freight railroad. The agency, which enforces whistleblower protection laws, including those in the rail industry, opened an investigation into 239 of the complaints.

During the same period, CSX had 204 complaints, followed by 198 from workers at Union Pacific and 138 at BNSF.

Norfolk Southern’s safety practices and culture are subject to a special investigation by the National Transportation Safety Board. In opening the review, the board cited the East Palestine derailment and other recent incidents in which three workers were killed. The board aims to determine whether “there’s something more systemic going on” at the company that caused these and other accidents, said Jennifer Homendy, the board’s president.

The Federal Railroad Administration, the top rail regulator, is also investigating the company. Congress has held hearings, and lawmakers have introduced bipartisan bills that would impose tougher safety standards on all railroads, especially those that carry hazardous materials. And the Justice Department said Friday it had sued the railroad, asking it to pay cleanup costs and additional penalties for the East Palestine derailment.

Railroad experts said Norfolk Southern’s shift toward demanding more from fewer workers and pushing them to work faster was part of an industry trend. Under pressure from hedge funds and other investors, the largest freight railroads have aggressively sought to run their operations more efficiently over the past decade.

Precision scheduled railways generally involve adhering to a strict operating schedule; cut personnel and assets such as railcars, locomotives and yards; and run fewer but longer trains. Canadian National pioneered it in the late 1990s under its chief executive, E. Hunter Harrison, who later took his hyper-efficient approach to Canadian Pacific and CSX.

In 2018 and 2019, Kansas City Southern, Union Pacific and Norfolk Southern announced plans to incorporate at least some of the principles developed by Mr. Harrison, who died in 2017.

These changes have been a boon to railroad investors and executives. Norfolk Southern’s profits have soared, and over the past five years it has paid shareholders nearly $18 billion through share buybacks and dividends. On Friday, Norfolk Southern said Mr. Shaw’s salary more than doubled last year to $9.8 million. In his statement, he said his salary and that of other managers would now be based in part on safety measures.

But the industry’s drive for efficiency has so angered railroad workers that they nearly walked off the job last fall, threatening to jeopardize the U.S. economy. That strike was averted after Congress and President Biden enacted a contract that many workers saw as sorely lacking because it didn’t guarantee them paid time off for sickness or medical appointments.

“It’s profit over everything, not just safety,” said Mark Wallace, a top official of the Brotherhood of Locomotive Engineers and Trainmen, referring to the entire rail industry. “It’s profit over customer service. It’s profit over employee satisfaction.”

Bill Tucker, an attorney in Birmingham, Ala., has represented shipping workers in cases against employers for 45 years. Norfolk Southern is the worst offender among the major railroads, he said.

A lawsuit filed by Mr. Tucker filed in federal court in 2021 on behalf of two Norfolk Southern workers, Shane Fowler and Kelvin Taylor, alleging that a manager threatened to discipline the men after they reported safety problems that violated Federal Railroad Administration defects and safety regulations.

In the lawsuit, the two men said their manager had demanded they remove the “bad order” tags, used to flag defective cars, from two cars. The complaint states that Mr. Fowler and Mr. Taylor reported her manager to the Norfolk Southern Ethics and Compliance hotline for security violations. Shortly thereafter, the workers themselves were accused of safety violations, which they said they had not committed.

Mr. Fowler and Mr. Taylor, who still works at the company, said through Mr. Tucker that they had no comment. “Morale in the railroads in general, and at Norfolk Southern in particular, is abysmal,” the lawyer said. “It’s just awful.”

Laws governing the railroads force employees with grievances to use internal company hearings, limiting their ability to take disputes to court. As a result, critics of the industry say, railroad companies find it easier than other companies to fire employees and their grievances.

Some workers said that despite such problems, they enjoyed railroad work. Mr Johnston, the sacked train engineer, wants his job back.

On the day of the 2021 dispute, he ran the locomotive with defective brakes until a federal regulator, conducting inspections at the yard, called attention to the problem and said the engine had to be taken out of service until repairs were made.

Later that day, after being told that the brakes were fixed, Mr. Johnston that one was still defective, he said. He got into an argument with his supervisor and used his cell phone to take a photograph of the defect, which could be a violation of Norfolk Southern rules.

“I expected to be punished,” Johnston said, “but I didn’t expect to be fired.”

Kitty Bennett contributed research.