
DATE: Sunday, March 2, 1997                 TAG: 9703010592

SECTION: BUSINESS                PAGE: D01  EDITION: FINAL 

SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER 

                                            LENGTH:  155 lines

WHAT NORFOLK SOUTHERN MEANS TO HAMPTON ROADSTHE IMPACT OF THE REGION'S ONLY FORTUNE 500 COMPANY EXTENDS BEYOND ECONOMICS. THE COMPANY ALSO IS A CULTURAL AND POLITICAL LEADER. THE COMPANY'S IMPACT

What if a Fortune 500 company considered moving its headquarters to Hampton Roads?

Let's say it would employs 1,350 people in the region with a combined compensation of nearly $72.5 million. Some of them would be top executives, who would take community leadership roles. The firm would spend nearly $118 million on goods and services and pay about $20.5 million in state and local taxes a year in Virginia.

Cities, politicians, economic developers and chambers of commerce would be stumbling over themselves to roll out the red carpet.

``Anybody would be anxious to attract such a company,'' said Rod Woolard, Norfolk's development director.

Thankfully, it's already here: Norfolk Southern Corp., the nation's fourth-largest railroad with nearly 15,000 miles of lines in the Southeast and Midwest.

The problem is Hampton Roads could lose it, or at least the headquarters.

Norfolk Southern offered in October to move to Philadelphia as part of its effort to woo Conrail Inc. away from CSX Corp. Such a move seems unlikely at this point as the heated merger fight drags on, but Norfolk Southern has not taken the offer off the table.

That ominous cloud looms and much is at stake.

Besides its direct impact on the community in terms of jobs, wages, spending and taxes, Norfolk Southern plays a critical role in the development of the port and in the arts community in Hampton Roads.

``It's hard to even think what the cultural life would be like in Hampton Roads if Norfolk Southern weren't here,'' said Catherine Jordan, the Chrysler Museum's interim director.

The Chrysler got $75,000 from the railroad's charitable arm, the Norfolk Southern Foundation, in 1995, and a similar amount in 1996. Even more money came to the museum through the railroad's support of the Business Consortium for the Arts.

``They reach out to all the arts,'' Jordan said. ``We're not the only ones who benefit from Norfolk Southern being here and being so generous.''

Indeed, various organizations throughout Hampton Roads enjoyed the railroad's largesse to the tune of more than $500,000 in 1995, according to a report from the Grantsmanship Service Inc. The foundation gave nearly $4 million to arts, social service, environmental and advocacy groups as well as schools in 1995, according to the report, which is taken from federal tax documents.

Though the railroad declines to discuss its charitable activities, it did say in a statement that the foundation was organized in 1983 ``based on the philosophy that good corporate citizens help provide quality lifestyles for employees and others in the communities.''

The railroad's largesse extends to all the communities it serves, however preference is given to organizations near its major employment centers in Hampton Roads, Roanoke and Atlanta.

Locally, Norfolk Southern gives big bucks to just about every major arts group and museum, to the zoo in Norfolk, Old Dominion University, the United Way, the American Red Cross, Children's Hospital of the Kings Daughters and dozens of smaller organizations. It's also the biggest contributor to the upcoming Virginia Waterfront International Arts Festival.

``Hopefully it will never happen, but if for some reason they were to stop their support of arts and culture, every organization in town would have a serious, serious problem in their ability to continue to exist,'' said Patrick Barberich, president of the Virginia Stage Company's board. ``Norfolk Southern is that important a player in this community.''

In fact the stage company is heading up an effort to nominate Norfolk Southern for a national corporate giving honor called the Business in the Arts award, which is sponsored by the Business Committee for the Arts Inc. and Forbes magazine, Barberich said.

While Norfolk Southern has buoyed the region's arts community even as other corporate headquarters moved, it has also been the engine for the region's civilian economy.

A predecessor railroad of Norfolk Southern first brought a load of coal to Norfolk from West Virginia in 1883. Since then thousands of its trains have delivered coal to Norfolk docks to fire steamships decades ago, and fuel electricity plants and stoke steel mills across the ocean today.

Hampton Roads is by far the nation's largest coal port, mostly because of Norfolk Southern. The railroad's Pier 6 coal terminal at Lamberts Point in Norfolk shipped 29.5 million tons of coal last year.

The hundreds of colliers that load coal in the port each year sustain the jobs of tugboat crews, marine pilots, dockworkers, ships agents and lab technicians.

``Norfolk Southern has certainly helped put the port of Hampton Roads on the map,'' said Jeff Keever, executive vice president of the Hampton Roads Maritime Association.

Norfolk Southern also fueled the explosive growth of the port general cargo terminals in the past 15 years. While its rail lines have long served the port, Norfolk Southern only moved its headquarters to Norfolk in 1982, when Roanoke-based Norfolk & Western Railway merged with Washington-based Southern Railway.

Before then the region's port had stagnated for more than a decade, competing on an even-footing with ports like Baltimore and Philadelphia for Midwest-bound cargo.

Since Norfolk Southern arrived, the port's general cargo tonnage has nearly quadrupled as both Baltimore and Philadelphia stagnated. Hampton Roads is now the second largest general cargo port on the East Coast after New York.

A number of factors contributed, but port officials cite the railroad as a leading one.

Norfolk Southern and the Virginia Port Authority formed a strategic partnership in the early 1980s with the stated intent of making Hampton Roads the port of choice on the East Coast.

``Without that, much of the cargo going to the Midwest could go through Baltimore, New York, Halifax or Montreal,'' said James Brennan, a principal and director at Mercer Management Consulting in Washington.

Hampton Roads was the first East Coast port to have trains capable of carrying two stacked containers to the Midwest, which lowered costs for shippers. The railroad also made rail rates very competitive.

Since 1982, cargo tonnage shipped through Hampton Roads has soared from about 2.5 million tons to 9.7 million tons in 1996.

``The Norfolk Southern is an integral part of our success story,'' said Joseph A. Dorto, chief executive and general manager of Virginia International Terminals Inc., which runs the port's three state-owned terminals.

``One of the reasons we've been able to attract so many shipping lines to the port is they know we've got a very well managed and successful railroad that serves the markets that they need to get to,'' Dorto said.

Norfolk Southern attributes the port's success to the competition between it and CSX for freight in and out of the port.

Hampton Roads would only lose a handful of jobs if Norfolk Southern winds up moving to Philadelphia so it can close a deal with Conrail. The railroad accounts for only a tenth of one percent of the region's 862,000 jobs. And only the headquarters is at risk.

Regardless of the headquarters' location, Norfolk Southern trains will continue to run in and out of the region daily, serving the Pier 6 coal terminal, the port's terminals and local industries such as the Ford truck plant.

About 342 people work at the headquarters in downtown Norfolk. Each of those jobs probably supports another 1.5 jobs in the region, estimates John Whaley, an economist with the Hampton Roads Planning District Commission.

In Whaley's view, a Fortune 500 headquarters brings far more to the economic table than just its employment impact. ``It might be easier for us to recruit other Fortune 500 companies . . . ,'' he said.

``Another issue is the leadership we get from a large company's executives,'' Whaley said. ``They tend to be good corporate citizens and tend to be interested in seeing the region prosper and grow.''

So Norfolk Southern's impact is not so much about the jobs, but the prestige, leadership, generosity and history the railroad gives the region. MEMO: Staff writer Christopher Dinsmore can be phoned at (757) 446-2271

or e-mailed at dins@pilotonline.com ILLUSTRATION: Graphic

NORFOLK SOUTHERN'S RAIL LINES AND EMPLOYMENT CENTERS

[Includes photos:]

[Pier 6 Coal Terminal]

[Portlock Yard]

[Lambert's Point docks]

[Headquarters]

For copy of graphic, see microfilm

Graphic

NORFOLK SOUTRHERN'S GIVING IN HAMPTON ROADS

For copy of graphic, see microfilm]