Two days after the termination of Norfolk Southern’s CEO, the Atlanta-based railroad’s newly named chief executive, Mark George, said he’s happy the board decision on the changeover was so rapid.
Former CEO Alan Shaw was fired for an alleged inappropriate relationship with another executive at the company.
“We’ve been in the news for all the wrong reasons in the past week,” George said during a presentation at an investor conference Friday. “I am super proud of our board for moving very swiftly and very decisively and very quickly, so that this is just a speed bump and it’s not a continuation of all the distractions that our organization has been dealing with for the past 18 months.”
The company has been under severe scrutiny since February 2023, when a Norfolk Southern train carrying hazardous materials derailed in East Palestine, Ohio.
Earlier this year, an activist investor group carried out a campaign to gain control of the railroad by board members with a plan to oust Shaw. It didn’t gain enough board seats to do so.
But this past Sunday, Norfolk Southern disclosed it was investigating Shaw for alleged misconduct, then on Wednesday terminated him for cause after preliminary findings from an “ongoing investigation” determined he violated company policies by engaging in a consensual relationship with the chief legal officer.
George was immediately appointed president and CEO, and he was named to the company’s board of directors.
“I’m just happy that we got this behind us quickly. We can get the organization focused moving forward,” George said.
“I’ll be honest with you, the (past) 18 months has been brutal for our organization, for our employees. Nobody wants to work with a name card with a company who is infamous right now,” George said. “They’re eager to move forward. … Norfolk Southern has a very long history of being successful, and we want to get great again.”
With more than 30 years of experience at industrial conglomerate United Technologies before joining Norfolk Southern, “I’ve seen the world operate differently, without a whole lot of patience for anything other than excellence on the operation side,” George said. “The tolerance for poor performance inside of rail has always bothered me.”
George joined Norfolk Southern as chief financial officer in 2019.
“If you’re not excellent in the way you serve your customers, they have options, and we’ve suffered from that over my first four and a half years,” he said.
Chief operating officer John Orr was appointed in March after Norfolk Southern came under pressure in February from activist investor Ancora Holdings Group to replace executives at the top of the company. Now, George said, “We’ve got a real operator with 40 years of experience.”
Orr has set up “war rooms” to identify operational issues and their root causes, said George, who is particularly focused on improving the company’s financial performance.
“We have got to focus on earnings growth in dollars,” said George, who has plans for productivity initiatives to generate $550 million of cost savings and is focused on improving profitability.
Orr added that “Everything is driven through safety.”
“The performance of the organization, our social license to operate, our reputation is so important.”
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