Management shake-up at CSX; Conway out, Snow in

Bedeviled by rising customer frustration and falling stock prices, Ronald J. Conway was ousted on April 11 after only nine months as president of CSX , the Philadelphia Inquirer reported.

CSX and rival Norfolk Southern Corp. remain in the grip of service and safety problems -- as well as plummeting stock prices -- arising from their June 1 breakup of Conrail.

Conway, formerly of Conrail, was removed by John W. Snow, chairman and chief executive officer of CSX Corp., who said yesterday that he had taken personal control of his $10.8 billion company's rail unit.

"It is time to accelerate the pace of change toward solving our problems," said Snow, who testified at federal regulatory hearings in Washington last month that he was "deeply concerned about the present state of the rail industry. It is plagued with instability."

In January, at a forum in Philadelphia, 300 shippers protested angrily that breakup problems persisted. A CSX vice president responded, pledging that CSX-Conrail breakup problems would be over by March 31.

"Three months from now, you are going to see a fundamentally different railroad. You're going to see increased velocity and the number of cars on line go down. You're going to see a bias in favor of action on our problems. We're going to get back to the fundamentals, back to Railroading 101," said Snow.

Conway's two closest associates - John P. Sammon and Gary Speigel - left with him. "They were so closely identified with Ron they decided to leave," Snow said. Two former Conrail executives were promoted in the reshuffling, but the top players promoted in the April 11 shake-up are all CSX veterans.

The announcement came one week after The Washington Post reported that a draft Federal Railroad Administration report found poor maintenance on CSX tracks and that many of the railroad's lines were deteriorating.

Sources, however, said the report had nothing to do with the Conway departure. Conway's colleagues at CSX pointed out that he had recognized the problem months ago, had fired several managers in the engineering department, and had increased the budget to repair track. A colleague noted that track does not deteriorate within a short time, and Conway had been president for only nine months.

The FRA found deteriorating track conditions on many areas of the CSX Transportation rail system, including lines used by passenger trains..

The FRA began the two-week system-wide track audit on Feb. 22 because of a 60 percent increase over five years in track-caused accidents on the 22,700-mile system.

Among other defects, the agency's track inspection car found two areas where the gauge wide enough to risk derailments on the line used by Amtrak, Virginia Railway Express and all north-south CSX freight trains between the VRE L'Enfant Plaza station and the Potomac River bridge. The defects were repaired immediately after they were found.

The width between rails is supposed to be 56 1/2 inches. The inspection found numerous spots around the CSX system where the gauge was spread one inch to 1 1/2 inches too wide.

That included two spots on the CSX main line between L'Enfant Plaza and the Potomac, where the FRA test equipment found the gauge to be 58 inches - 1 1/2 inches too wide.

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