Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 10, 1993 TAG: 9301110220
SECTION: EDITORIAL PAGE: F-3 EDITION: METRO
SOURCE: DAVID R. GOODE
DATELINE: LENGTH: Long
ROANOKE MUST LOOK BEYOND THE VALLEY
HAVING lived in Norfolk for the last two and a half years, I can report that the Roanoke Valley's reputation for innovation, diversity and vitality is spreading. Roanoke's star is rising.As a son of Roanoke, that makes me proud. And because I love Roanoke so much, I want to talk seriously. I didn't come here to sing Roanoke's praises. I didn't come here to tell you how important she is to Norfolk Southern. We've been telling you that for years, and I don't think we need to do that anymore.
I also didn't come to make any announcements about the location of our service center or about Hotel Roanoke, although some may have assumed that these important decisions might be part of my message. In a sense they are - because they are the kind of economic decisions that will have a lot to say about the future of Roanoke.
As much as I love the Roanoke Valley and value its people, the location of any important Norfolk Southern facility will be determined by hard business facts. The service center is no exception.
The Hotel Roanoke is not a decision for Norfolk Southern. We created the framework by donating a valuable piece of property - and an important piece of Roanoke history - to Virginia Tech so it could be preserved and developed. But the development is the responsibility of Roanoke and its citizens.
I have been very impressed by the work done by Tom Robertson and Renew Roanoke in marshaling community support for the project. The results are impressive and represent an accomplishment by the community that can symbolize a real renewal for Roanoke.
For our part, we'll help, I'm sure, but only when and if it's clear that a sound structure is in place to make the project work. Norfolk Southern has always stepped up to the plate for this community, as we have for all our communities on the projects that are significant to them.
So, having said what I'm not going to say, let me give you my thoughts as a native son who has had a little time to acquire an outsider's perspective.
I urge you to stop thinking small.
These mountains that define our region are fundamental to Roanoke's character. Roanoke would not be Roanoke - and Roanokers would not be Roanokers - without them. They remind us of our pioneering heritage. They are essential to our lifestyle - that pleasant blend of rural casualness and urban sophistication that is uniquely Roanoke. They're a cozy, comforting presence, and gorgeous to look at year-round.
But they also can shrink the horizon, encourage small thinking. They make it tempting to view all that matters as being that bowl between the Blue Ridge and Catawba Mountain.
But the world is not a bowl.
Roanoke must ignore those mountains. When considering opportunities, competition and our future, the mountains must become invisible. Look through them to Hampton Roads, to Rotterdam, to Frankfurt, to Moscow, to Singapore, to Seoul, to Sydney.
Roanoke is the premier city of Western Virginia. But if that's all you think you are, that's all you'll ever be.
If you think of Roanoke as being heavily dependent on the railroad, that's all you'll ever be.
If you need constant reassurance that the railroad loves you and will never leave you, that suggests to me you don't quite grasp Roanoke's real potential.
I see too much worrying over minor details: How many people has Norfolk Southern moved to Atlanta, how many to Norfolk, how many from Atlanta to Roanoke, how many will there be a year from now, five years from now? How many vice presidents does Roanoke get?
What I don't see enough of is thinking about how Roanoke fits into the big economic picture. How can Roanoke tap into and grow with the global economy? What are its strengths, and how can we turn them into world-class assets?
I don't mean to downplay Roanoke's importance to Norfolk Southern. The valley is home to more of our employees than any other locality. It's home to some very important functions, both mechanical and managerial. It's home to a lot of our shareholders.
Roanoke, in short, is a significant cog in this big operation. So, more important to Roanoke than how much that cog may fluctuate in size is what's happening in the big picture. Roanoke benefits not so much from the absolute number of employees we have here, but from the success of the overall enterprise - from Norfolk Southern's ability to compete in the international marketplace.
Coal is still our No. 1 commodity. Last year we made the Appalachians 122 million tons lighter. Of that, 31 million tons of coal rolled through Roanoke on its way to export markets.
Coal comprises about a third of our business, so we devote a lot of resources to taking care of our coal customers, seeking new markets and making that business grow. Much of that is done right here in Roanoke - the center of a billion-dollar business. Roanoke is the key point in a river of black prosperity running from the coalfields to Norfolk and beyond to the world.
For the past couple of years, it hasn't been growing, due to a combination of the recession and unusually mild weather. But we take the long view. We expect demand for the high-quality coal produced by the mines of Western Virginia to resume the growth curve we've seen in the last decade, and continue right into the next century. We're working to be ready for it.
We expect the European coal market to grow substantially in the next decade or two as state-subsidized coal is replaced with coal originating on Norfolk Southern, and as European utilities look across the Atlantic for high-quality, low-sulfur coal to meet tougher emissions standards.
There are some caveats. With South Africa emerging from the international doghouse, its coal is coming onto the market. Also, the former East Bloc states are scrambling for ways to raise foreign currency, and one way may be to flood the market with coal.
A major cloud on the long-term horizon is the environmental question. To the extent that clean-air standards, both here and abroad, increase demand for low-sulfur coal, we're in a good position. However, to the extent that global-warming concerns may squeeze demand for all carbon fuels, we are vulnerable.
Still, the fact that coal remains the world's most abundant, reliable and cheapest source of energy cannot be ignored. The nations of the developing world are hungry for energy sources to enable them to catch up with the industrialized world. The world may decide the environmental price of burning coal and oil is too high, but it will pay a steep economic and social price if it forgoes a fuel as available and affordable as coal.
Reduced coal consumption would hit especially hard in Western Virginia. It would directly affect Roanoke. That's why you and the political and educational leadership here and in Western Virginia need to understand that regulatory and trade barriers against coal will do more than anything else to damage the economic future of the valley.
Conversely, if you in this room take the lead in ensuring a fair playing-field for coal, you will do more positive things for Roanoke's future than you can imagine. This can be a multibillion-dollar business, and it will be led right here, and much of the equipment to handle it will be built right here.
Over the past few years, we've been keeping Roanoke pretty busy with our coal-car rebody program. We have invested $220 million in rebodying almost 11,000 cars.
Ironically, the recent slump in coal traffic has meant even more business for the car shop. We've taken advantage of the slack to quicken the pace of our upgrade program. We're confident we're going to need every ton of capacity from every car in our fleet when the market improves, and we will be ready.
But it's all dependent on the viability and salability of that wonderful black stuff you see moving through Roanoke every day.
This is just one example of how Roanoke fits into the big picture. Far more influential and important to Roanoke's future than organizational changes decreed from Norfolk are decisions made by power generators in Italy, steel producers in Brazil and multinational environmental coalitions - and the environmental policies decided by the new administration and by state governments.
To the extent coal is diminished, Roanoke will be diminished - and, I suspect, much more significantly in the long run than by a bank merger.
Just as the rise and fall of the coal business affects the coal-marketing group here in Roanoke, the same can be said of the marketing groups for chemicals, agriculture, wood and paper products and all the other commodity groups who stay in touch with world markets from their Roanoke offices.
These are people who have a global outlook and knowledge extending well beyond the mountains. Two of your citizens are now in Russia as our emissaries - and yours - looking for opportunities both for Norfolk Southern and the Roanoke Valley.
To the extent that we remain competitive in any commodity group and are successful in growing that business, that group will maintain a strong and beneficial presence in Roanoke.
The same is true of any of the region's enterprises. Roanoke's future depends upon how well all of its corporate citizens do in the world market. It depends upon how well Roanoke integrates into that market.
President-elect Clinton has a mandate to rebuild the nation's industrial base so we can compete globally. How will Roanoke participate? What will its niche be? What can this region do to contribute to the overall competitive strength of the national economy? How can you make this valley indispensable to the United States?
Look at your resources from a global perspective, and you may discover new strengths. Capitalize on your uniqueness. The people, the geography and the educational institutions are prime assets that I believe could make this region's influence felt far beyond these protective peaks and ridges.
Take public education. The Roanoke Valley school systems are outstanding. My daughter Martha discovered that when we moved to Norfolk. In Roanoke, she attended Fishburn Park School, an experimental, cutting-edge school in the city school system. In Norfolk, she began attending Norfolk Academy, a private school with a reputation for academic excellence. She quickly realized that she was about a half a year ahead of the rest of her class.
Martha came back here during a holiday recently and visited with her old class, and found out they're still ahead of Norfolk Academy.
I'm on the board at Norfolk Academy, and I told the board about this. They regarded me as some kind of nut from Roanoke. "This school is the best in the area," they said. "It gets kids in the best colleges." And I believe it. But it isn't as good as at least one school in the Roanoke city system.
Understand what you have. Believe in it and nurture it.
You have assets - geography, education, cultural assets, land, quality of life, transportation, and - most important - the best people in the world. Team up. Bring together Virginia Tech, Hollins and Roanoke College to add to the industrial base. Capitalize on the niche in the fiber-optics and other high-tech businesses here. Go for big-time industrial development.
The question to consider, then, is not, "Are we the best in the state?" You must ask, "Are we the best in the world?" You must run with the swift. The beautiful walls of this cozy bowl will not keep out global competition.
I would like to see Norfolk Southern diminish in relative importance to this region's economy, even while we maintain a strong and strengthening presence here. I would like to see that happen as a result of Roanoke expanding its horizons, of its growing participation in a growing global economy, of the sharing of its talent and genius with a nation and a world that desperately need them.
Norfolk Southern can help. As an international operation, we have a feel for the shifts and trends of the global economy. We have expertise in dealing with it. We know other people who can help. And we want you to succeed - because we'll succeed together.
And I want Roanoke to succeed because, after all, I am and will remain a native of the valley. My roots are here, my friends are here, family is here - my heart is here. I want Roanoke and Norfolk Southern to lead - to be the best.
So I urge you today to stop looking back at old corporate headquarters and consider where Roanoke should be in the 21st century. Mentally mow down these mountains and expose yourself to the harsh winds of competition, because you've got - we've got - what it takes to win.
David R. Goode is chairman, president and CEO of Norfolk Southern Corp. This is adapted from his remarks Wednesday to the Roanoke Regional Chamber of Commerce.