Subhi Agrawal
On Wednesday, September 11, Norfolk Southern announced firing the CEO Alan Shaw as had an inappropriate relationship with an employee.
“Delivering Enhanced Value For Our Employees”
His departure comes after two Challenging years in the top job and just days after the company’s board revealed it was investigating him for alleged ethical misconduct.
The Atlanta-based railroad stated that Shaw had an inappropriate relationship with Norfolk Southern’s chief legal officer, who was also fired from the railroad. The next CEO of the railroad will be Norfolk Southern’s Chief Financial Officer Mark George.
“I look forward to my continued partnership with John and the entire (Norfolk Southern) team as we further our progress on optimizing operations and serving our customers while creating a safe and satisfying workplace and delivering enhanced value for our employees, customers, shareholders, and communities,” George said, reported by News 18.
In February 2023, Shaw was in charge of Norfolk Southern when one of its trains derailed, spilled toxic chemicals, and caught fire in East Palestine, Ohio leading to the major disaster in the decades. Activist investor Ancora Holdings attempted to take control and expelled Shaw.
After the derailed disaster, he weathered congressional hearings and difficult community meetings and promised to make Norfolk Southern the “gold standard for safety” in the industry.
Moreover, the disaster was an awakening call for lawmakers and regulators to re-examine railroad safety and call for reforms. However, made trivial changes like installing more trackside detectors to find overheating bearings just like the one that caused the East Palestine issue.
They Confirmed The Expulsion Was Not Related To Financial Performance
Norfolk Southern’s profits have been lower than those of other major railroads that have adopted the lean operating model, which is now standard in the industry.
The railroad also confirmed that Shaw’s expulsion was not related to its financial performance, and the board confirmed its financial guidance. They aim to improve productivity by about $550 million and improve its profit margin over the next two years.
As per News 18, The railroad’s Chairman Claude Mongeau stated, “The Board has full confidence in Mark and his ability to continue delivering on our commitments to shareholders and other stakeholders” despite having only worked on the railroad since 2019.
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