THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Monday, January 20, 1997 TAG: 9701180828
SECTION: BUSINESS WEEKLY PAGE: 9 EDITION: FINAL
SERIES: 1997 FORECAST
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: 53 lines
With all the uncertainty swirling around the battle for Conrail Inc. there's little that can be predicted about what the Eastern railroad map will look like by the end of 1997.
However, some things seem sure to be true by the end of the year.
Norfolk Southern Corp. and CSX Corp., the two railroads vying for Conrail, will still be running dozens of trains a day to and from the port of Hampton Roads, loaded with coal and shipping containers full of all kinds of goods.
The region's coal terminals will likely stay busy as the European economy continues to grow and demand for power and steel increase.
Norfolk Southern's headquarters will likely still be in Norfolk, though 1998 is not so certain.
Conrail and Richmond-based CSX want to merge in a $9 billion deal that would create the largest Eastern railroad, dwarfing Norfolk Southern. Norfolk Southern has countered with a $10.3 billion hostile takeover bid for Conrail.
The winner's rail network would stretch from Boston to New Orleans, Chicago to Florida.
Since October Norfolk Southern and CSX have been slugging it out in federal courts and wooing Conrail shareholders, who must approve any deal for the Philadelphia-based railroad.
Norfolk Southern initially offered to consider moving its headquarters to Philadelphia if Conrail would agree to talk. Conrail spurned Norfolk Southern's overture and the bidding war has turned acrimonious.
Still Norfolk Southern has not taken the headquarters off the table.
The status of the headquarters and its 300 employees isn't likely to be resolved until the takeover war is settled. And it will likely be early 1998 before the federal Surface Transportation Board makes a final ruling on the merger.
In the end, most observers expect a compromise resolution that creates two reasonably competitive Eastern railroads. Such a resolution could be negotiated between the railroads or imposed by federal regulators or even Congress.
For most of the region's railroad workers, though, 1997 will be business as usual.
The port will continue to need trains to ship and receive general cargo and coal - what Norfolk Southern Chairman David R. Goode calls ``black gold'' - should continue to flow from Appalachia to region's export terminals.
Norfolk Southern officials were circumspect about coal exports. ``Indications are that the business through Lamberts Point will be flat with perhaps a slight increase,'' said spokesman Bob Auman, referring to railroad's coal terminal in Norfolk.
But even a flat year would be the equal of the railroad's best coal year since 1992.
KEYWORDS: 1997 FORECAST RAILROADS