State, Unions Petition to Keep Rail Shops Open

PHILADELPHIA -- Six rail unions and the state of Pennsylvania on Wednesday jointly petitioned the Surface Transportation Board (STB) to issue an order that Norfolk Southern Corp. (NS) keep several Pennsylvania car repair shops open.

The railroad announced late last year that it planned that it plans to close the former Conrail shops in Hollidaysburg. Since NS acquired 58% of Conrail for $5.8 billion, certain basic changes have occurred in its business. Export coal traffic, among the company's most lucrative, has withered to 50% of its former volume, and the railroad says it no longer needs facilities to repair and maintain as many railcars as it once did.

The unions retorted by saying that that the railroad's commitment to keep the shops open were not conditional .

In the 1997 joint application by NS and CSX Corp. for permission to acquire the former Conrail Inc. for $10 billion and divide its operations between them, NS committed to keeping the shops open and to investing $4 million in the facility.

An NS spokesman said the railroad had not seen the petition, and "under the circumstances it would be inappropriate to comment."

Under pressure from then Cong. Bud Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, NS agreed in 1997 to keep the Hollidaysburg facility open and to make the additional investment. Shuster then agreed to support the Conrail deal. Hollidaysburg is in the heart of the district represented by Shuster, who retired earlier this year.

The STB retained jurisdiction for five years in the Conrail case to make sure that the parties complied with its conditions.