Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, May 12, 1995 TAG: 9505120032
SECTION: BUSINESS PAGE: A-17 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Long
David Goode, Norfolk Southern Corp.'s chairman, president and chief executive officer and a Vinton native, took a moment at the end of the company's annual meeting Thursday to introduce his 88-year-old father, Otto Goode, a retired Vinton department-store owner and real-estate dealer.
It was a touch that added to the feeling of homecoming as the Norfolk-based transportation company returned, holding its shareholders meeting at Hotel Roanoke and Conference Center for the first time since it gave the historic hotel to Virginia Tech in 1989. It was the fourth annual meeting NS has held at the Hotel Roanoke in 13 years since the company was formed by a merger of the Roanoke-based Norfolk and Western and the Southern Railway of Washington.
The meeting drew 960 people; the company had ordered chairs for 1,300. Norfolk Southern has more than 3,000 employees in the Roanoke Valley and scores more retirees, many of whom own stock.
"In 1994, we achieved new levels of safety, productivity, efficiency, traffic volume and revenues," Goode said. "It was our first billion-dollar operating income year."
In January, NS reported record net income of $667.8 million in 1994 and record earnings per share of $4.90 when tax and accounting changes that produced a windfall in 1993 were discounted.
Some attendees rose during the meeting to praise NS management for its work, but not everyone was happy.
Lewis Ferguson, a 40-year employee of the railroad from Roanoke, questioned the board of directors approval of certain management perks, including over $55,000 in personal use of a company plane by Goode. Ferguson admonished the board for not performing its duty to look after stockholders and of discriminating in favor of some workers over others. Goode answered only that the company's policy is not to discriminate.
Bob Fort, an NS spokesman in Norfolk, said it has been board policy "for quite some time" for security and other reasons to allow the chairman to use the company plane. Most other major corporations have similar policies, he said.
With mergers and merger rumors rampant within the railroad industry over the past several months, it was inevitable that someone would ask Goode about reported merger discussions between NS - a Southern and Midwestern railroad - and Conrail - which serves the Northeast - or other potential railroad consolidations.
One member of the audience asked Goode if NS shouldn't hook up with Conrail before Union Pacific or another railroad does.
Goode responded that Conrail has made it clear that it wants to remain an independent railroad. He said, however, that NS will continue working cooperatively with Conrail on such things as the recently expanded intermodal service between Atlanta and New York.
A drive along Interstate 81 or I-95, both filled with truck traffic, indicates a potential for a lot more freight business for the railroads, he said. "We can do all the motorists of the East a favor and take as much of that freight off those corridors as we can," he said.
Asked about potential mergers after the meeting, Arnold McKinnon, Goode's predecessor as NS chairman and still a board member, said merger opportunities have to be judged on their individual merits. "You do the best you can internally, and if these other things happen, they happen," he said.
Bev Fitzpatrick Jr., director of the New Century Council, a public-private economic planning group in the Roanoke and New River valleys and Alleghany Highlands, pressed Goode about the prospects for NS locating an intermodal freight yard in the region.
Goode said NS is studying several possible intermodal activities in the area, noting that Roanoke is important because of its location on the I-81 corridor.
Bill Hargrove, a shareholder from Milledgeville, Ga., asked Goode about the potential for NS resuming passenger service. Goode responded that NS will cooperate with Amtrak in providing passenger service when it doesn't interfere with the railroad's prime mission as a freight hauler.
Among the stockholders enjoying snacks outside the meeting room following the meeting were Lowell W. and Maxine Sink of Roanoke. Lowell Sink retired in 1977 after 38 years in the railroad's Roanoke car shops. "I think it's running good," he said of the railroad. "I would like to see some passenger service, though."
Julia Wimmer was attending her first shareholders meeting.
"I think they're doing a good job," she said of NS management. "I'm like other people. I regret the fact we had to discontinue steam," referring to Norfolk Southern's decision last year to stop offering excursion trips pulled by restored steam engines.
Other points that Goode made during his speech to stockholders included:
NS achieved record results last year despite a disappointing year for its export coal business, which illustrates the company has been successful in its efforts to diversify its business.
NS leads the railroad industry in safety because it's good for the workers and good for business. The company expects to receive a sixth straight Harriman Award this year for having the best safety record in the rail industry, he said.
The company is forecasting slower national economic growth for the last half of this year but still expects to better last year's record results because of its efforts to continuously improve productivity and revenue growth.
The company's common stock closed Thursday at $64.75 a share, up 871/2 cents in trading on the New York Stock Exchange.
by CNB