Norfolk Southern to become ‘gold standard of safety’: CEO

“A crisis is an opportunity to really, kind of like, test your leadership and your resolve. It’s also an opportunity to accelerate change”, Alan Shaw, President and CEO of railroad company Norfolk Southern (NSC) told Yahoo Finance.

Shaw sits down with Yahoo Finance’s Executive Editor Brian Sozzi to discuss criticism he faced, after high-profile derailments raised questions about the company’s safety protocols.

Shaw says “I knew that coming out of this we were going to be a stronger company”, stressing that Norfolk Southern is “a safe railroad”, and that the recent derailments, while unacceptable, represented learning experiences for the company.

Shaw saw the crisis as an opportunity to bring in outside perspectives, partnering with organizations like the Georgia Tech Research Institute and nuclear Navy admirals from Newport News Shipbuilding to introduce new safety initiatives and transform Norfolk Southern’s safety culture. Shaw believes these changes will make Norfolk Southern a “gold standard of safety” in the coming years.

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Video Transcript

BRIAN SOZZI: As a leader, public company forward, or the face of the company, in many respects, what is it like to take that criticism that you’ve gotten, even despite all the efforts you’ve been trying to put forth on the ground?

ALAN SHAW: Look, we’re a safe railroad. And I knew that, right? Last year, the number of derailments on Norfolk Southern was the lowest in two decades. But I know we can get better. And as I look through this crisis, a crisis is an opportunity to really kind of like test your leadership and your resolve. It also is an opportunity to accelerate change. And I knew that coming out of this, we were going to be a stronger company.

And so one of the things I did is I looked outside the rail industry for inspiration. I used to work at Newport News Shipbuilding in the Nuclear Department, installing nuclear reactors in aircraft carriers. And so I had a really good idea of–

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BRIAN SOZZI: That’s a pressure cooker.

ALAN SHAW: Yeah, I had a really good idea of the safety culture of Admiral Rickover’s Nuclear Navy. And so I reached out to a former admiral who used to run the Navy nuclear propulsion system and asked him to put together a team of former Navy nukes, reporting directly to me as an independent consultant, and help us with our safety culture. And they’ve been on the ground for about six months. They’re going to be here two to three years. They’re engaging with our employees, our craft colleagues. And they’re going to make us a safer railroad.

BRIAN SOZZI: So–

ALAN SHAW: We’re going to be the gold standard of safety.

BRIAN SOZZI: So three years from now, how do you– how is Norfolk a safer railroad?

ALAN SHAW: Well, we’re going to continue to invest in our infrastructure. We invest over $1 billion in safety every year. We’re going to continue to train our employees. We’re going to use technology. We have partnered with the Georgia Tech Research Institute on a machine visioning train inspection portal, which is basically a shed that goes around the tracks. The train goes through it, the track speed about 60 miles an hour.

It’s got 38 cameras that take about 1,000 pictures of each rail car and immediately uses AI to spot potential safety defects. And that’s something that I know that a conductor in Chicago at night in February just won’t catch with the human eye. We are using technology and automated intelligence to enhance our safety.