DATE: Thursday, March 20, 1997              TAG: 9703200309

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: ASSOCIATED PRESS 

DATELINE: HARRISBURG, PA.                   LENGTH:   57 lines

LEGISLATIVE PANEL SEEKS ASSURANCES IN CONRAIL HEARINGS

Recalling how the last railroad merger in Pennsylvania ended in bankruptcy, a legislative panel sought assurances from the future owners of Conrail that history would not be repeated.

Addressing officials from Norfolk Southern Corp. and CSX Corp. at a daylong hearing Wednesday on their proposed $10.5 billion takeover, Sen. Edwin Holl said, ``Pennsylvania has suffered long and hard from railroad bankruptcies.''

Holl referred to the 1968 merger of the Pennsylvania Railroad and New York Central into Penn Central. It went bankrupt four years later, and in 1973, the U.S. government cobbled together the operations of Penn Central and five other busted railroads to form Conrail.

Norfolk and CSX officials said the bankruptcy occurred before federal deregulation in 1980 made railroads ``strong and competitive again.'' They said the rail lines they acquire in the nation's Northeast would require them to hire people.

``When we get in the Northeast we are going to have growth,'' said CSX's Michael Ruehling, a company vice president.

Norfolk Southern issued a letter in full-page ads in newspapers around the state Wednesday ``welcoming the dedicated and talented employees of Conrail who will be joining our company.''

But members of the Senate and House transportation committees, meeting jointly, remained wary of promises that Conrail's takeover will mean better service, competitive shipping rates and new jobs.

Their wariness was fueled by railroad officials' refusal to reveal details about the takeover, which the companies say will create two competing railroads in the Northeast. They promised the lawmakers they would do so once they present their plan for approval to the U.S. Surface Transportation Board in June.

After officials from the two Virginia-based companies testified, lawmakers spent the day hearing from the shortline railroads, manufacturers and industries dependent on Conrail's 11,000-mile railway.

Wednesday's legislative appearance came on the heels of an appearance by the two rails' chief executives at an Altoona repair shop Monday, where they attempted to reassure workers that they plan to keep such shops open.

The executives came off their corporate jets to the sounds of ``Chattanooga Choo Choo'' by the Altoona Area High School band.

Other students greeted the entourage bearing gifts and letters, the whole package speaking to the uncertainty of what selling Conrail means to them, their parents and their town.

CSX Chairman John W. Snow and Norfolk Southern Chairman David R. Goode on Monday toured the Conrail repair shops in Altoona and nearby Hollidaysburg. At 1,200 employees, Conrail is Blair County's largest employer.

``We're clearly going to need these facilities up here,'' Goode said.

Snow said even though Norfolk Southern will own the shops, CSX will bring broken-down locomotives and rail cars there to be repaired.

The chairmen - brought by U.S. Rep. Bud Shuster, R-Everett - said they expect the Conrail deal to help their companies regain business from the truck industry and create more railroad jobs.

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