The company behind Ohio’s toxic train disaster: Deaths, silenced whistleblowers, and $10bn for shareholders

Norfolk Southern faced repeated criticisms ahead of this month’s crash, Bevan Hurley and Louise Boyle write

Thursday 16 February 2023 00:57 GMT
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The site of the Norfolk Southern train derailment in East Palestine, Ohio
The site of the Norfolk Southern train derailment in East Palestine, Ohio (Associated Press)

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The rail company behind the toxic train disaster in Ohio was lambasted for safety failures last year after the company authorised $10bn stock buybacks for shareholders rather than maintenance, The Independent can reveal.

On the evening of 3 February, Norfolk Southern freight train 32N derailed in the small town of East Palestine. Of the 50 rail cars involved, around 11 were carrying toxic chemicals.

To prevent an explosion from the hazardous materials, clean-up crews carried out a controlled burn which sent noxious black clouds billowing across the region. More than 2,000 people were evacuated but have since been told it’s safe to return home. Yet 12 days after the incident, reports of illness, dead animals, and concerns about the region’s water supply continue to emerge.

The disaster was years in the making, according to a coalition of rail worker unions, driven by slashing the workforce, deregulation, corporate lobbying and shareholder payouts.

The big rail operators eliminated at least one-fifth of jobs in just a couple of years, The Associated Press reported.

“The wreck of Train 32N has been years in the making. What other such train wrecks await us remains to be seen,” Railroad Workers United (RWU) said in a press release.

In April 2022 federal regulators were so concerned over the “deterioration of the freight rail industry” that they hauled executives from the four largest US rail companies, including Norfolk Southern, to Washington DC for urgent public hearings.

The Surface Transportation Board (STB), which regulates the freight rail industry, told how it had heard compelling testimony from whistleblowers about reports of chronic employee shortages. Chairman Martin Oberman described the situation as a “rail service crisis”.

The foursome - also made up of BNSF Railway Company, CSX Transportation and Union Pacific Railroad - were ordered to file detailed reports explaining how they would correct deficiencies the following month.

When May came around, the SBT issued a highly critical statement accusing the companies of only filing “perfunctory” responses.

Federal regulators singled out Norfolk Southern for “flatly (refusing) to provide the six-month targets for achieving their performance goals explicitly required by the Board’s order”.

Yet just weeks before this public scrutiny, Norfolk Southern had announced a $10bn stock buyback.

Then, in December 2022, Alan Shaw, Norfolk Southern’s recently-named CEO, sold 2,000 shares of his stock in the company, according to a Securities and Exchange Commission (SEC) filing. At an average price of $258, it netted him more than $516,000, Marketbeat reported.

Devastating aftermath of Ohio train derailment revealed in shocking drone footage

The rail firm’s director, James Squires, sold 21,272 shares of stock around the same time, amounting to $5.2m, Marketbeat reported.

Then on 24 January 2023, Norfolk Southern’s Board of Directors approved a 9 per cent increase on its quarterly dividend on the company’s common stock, from $1.24 to $1.35 per share.

The Independent has contacted the company for comment.

The company has a checkered past of deadly accidents and silencing whistleblowers, The Independent has also discovered.

At least 18 Norfolk Southern employees have died on the job since 1991, according to figures from the National Transportation Safety Board (NTSB) and the Railroad Workers Union.

The latest fatality was in December 2022 when trainee conductor Walter James Griffin III was killed and another conductor was seriously injured after being struck by a piece of metal from a passing train car in Bessemer, Alabama. The death is still under investigation.

In 2005, nine people including one Norfolk Southern engineer died and 250 people were injured from toxic chlorine exposure after two Norfolk Southern freight trains collided near Graniteville, South Carolina.

The fatalities were a result of chlorine searing the victims’ lungs. An NTSB accident report blamed the crash on the failure of one train crew to return a main line switch to the normal position after completing work on the track.

In February 2013, Norfolk Southern was ordered by the Occupational Safety and Health Administration (OSHA), the watchdog of the Department of Labor, to pay $1.1m to three whistleblowers who were wrongfully fired for reporting workplace injuries.

Couple and daughter diagnosed with respiratory conditions following Ohio train crash

One was a crane operator in Fort Wayne, Indiana, who was removed from service after reporting an eye injury that required the extraction of a sliver of metal and rust ring from his eye. The injury occurred while he was operating a crane to build a bridge. The employee was terminated after an internal investigation.

The other investigation involved a welder and a welder’s helper in Pennsylvania who had worked at the railroad for more than 36 years without incident. They reported injuries from an accident caused by another vehicle that ran a red light and hit a second vehicle, which in turn collided with the company truck they were in.

The employees initially reported minor shoulder pain and declined medical treatment but their pain increased and they were treated at hospital. They were later formally terminated when management concluded they made false reports about their conditions.

In addition to the settlements, Norfolk Southern was ordered to expunge their disciplinary records.

"The Labor Department continues to find serious whistleblower violations at Norfolk Southern, and we will be steadfast in our defense of a worker’s right to a safe job – including his or her right to report injuries," said acting Secretary of Labor Seth D. Harris at the time.

Several other orders were made against Norfolk Southern between 2011-2013, OSHA reported.  The “investigations have found that the company continues to retaliate against employees for reporting work-related injuries, and these actions have effectively created a chilling effect in the railroad industry”, the agency said.

Norfolk Southern said on Tuesday that it was sending $1m of “immediate charitable relief” to East Palestine residents.

A few days after the derailment, the company had offered East Palestine a $25,000 donation to assist residents who were forced to evacuate their homes.

The rail workers’ unions said that the immediate cause of the Ohio trainwreck “appears to have been a 19th century style mechanical failure of the axle on one of the cars—an overheated bearing—leading to derailment and then jackknifing tumbling cars”.

“There is no way in the 21st century, save from a combination of incompetence and disregard to public safety, that such a defect should still be threatening our communities,” RWU said in a statement.

An investigation into the East Palestine derailment is ongoing, according to the NTSB.

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