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Norfolk Southern CEO grilled at Senate on money for families affected by Ohio derailment

Alan Shaw faced tough questions on the logistics company’s approach to supporting the East Palestine community in the wake of the wreck.

WASHINGTON (CN) — The chief executive of the company responsible for a February train derailment that displaced scores of people in East Palestine, Ohio, refused to say during a congressional hearing whether his firm would provide full financial assistance to the affected community.

In his testimony Thursday before the Senate Environment and Public Works Committee, Norfolk Southern CEO Alan Shaw apologized for his company’s role in the Feb. 3 wreck whose resulting fire caused hazardous vinyl chloride to be burned off into the atmosphere. “I am determined to make it right,” he said.

Norfolk Southern has provided around $20 million in financial assistance to local families, Shaw told lawmakers, detailing the company’s effort to support the affected community. “This financial assistance is just a down payment,” he said. “We will continue to invest in East Palestine for as long as it takes to help the community recover and thrive.”

Senator Tom Carper, the Delaware Democrat chairing the committee, asked Shaw to commit to compensating East Palestine residents for long-term economic damages or medical expenses related to the derailment.

“We’re committed to doing what’s right for the folks of East Palestine,” Shaw responded. “That’s been my personal commitment since the day after this has happened.”

At least one lawmaker was not placated by that statement.

“A family that had a home worth $100,000 that is now worth $50,000 will probably never be able to sell that home for $100,000 again,” said Senator Ed Markey. “Will you compensate that family for that loss?”

Shaw refused to say.

“That is the right thing to do,” Markey said. “These people are innocent victims. These people were at home, and all of the sudden, their small businesses and homes are diminished in value. Norfolk Southern owes these people.”

The Massachusetts Democrat predicted that Norfolk Southern would resist fully compensating affected families. “We’re not hearing the right things today,” he said. “These families want to know if, in the long term, they are going to be left behind. I think they’re going to be in the crosshairs of Norfolk Southern’s accountants.”

Norfolk Southern's safety record came into question at the hearing as well. Rhode Island Senator Sheldon Whitehouse raised concerns about the company's opposition to a 2015 federal regulation requiring trains that carry hazardous substances to be equipped with electronic brakes.

Shaw quoted National Transportation Safety Board chair Jennifer Homendy as having said that those braking regulations would not have had an impact on the East Palestine derailment.

Vermont Democrat Bernie Sanders pushed the CEO on workforce reductions at Norfolk Southern, which he attributed to a rail operations system known as precision scheduled railroading, aimed at bringing down costs and reducing the workforce.

Precision scheduled railroading is responsible for Norfolk Southern decreasing employment by over 40% over the last six years, Sanders said. He noted the reduced workforce forces fewer rail employees to do more jobs, one of which is carrying out safety inspections.

Norfolk Southern is addressing that problem, Shaw said. “I became CEO in May of last year," he testified. "Ever since that point, we’ve been on a hiring spree. The number of employees at Norfolk Southern today is 1,500 more than it was at this time last year.”

Shaw insisted that his company has been advancing rail safety.

“I am determined to make Norfolk Southern safety culture the best in the industry,” Shaw said.

“You’re not having a good month,” Markey responded. “What I’m hearing from you is this great confidence that you have in your system. Overconfidence breeds complacency and complacency breeds disaster. Disaster has struck East Palestine.”

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