Norfolk Southern Chairman Robert B. Claytor said yesterday that he intends to step up the pace in his company's attempt to win support for its acquisition of federally owned Consolidated Rail Corp.
Claytor's statement came on a day when one of the parties with which Claytor could use an agreement announced that it is breaking off negotiations with Norfolk Southern.
That is the Chicago and North Western Transportation Co. (CNW), a Midwest railroad that says it is concerned about its own future in the event of a Norfolk Southern/Conrail merger.
"Lacking any meaningful protection from the harm that consolidation would do to our railroad and the territory we serve, we will continue to oppose such a combination," said North Western President James R. Wolfe.
In an interview after a House Judiciary Committee hearing, Claytor said, "I don't understand why they would do this. I would think that could be turned around."
Antitrust questions are the central stumbling block for Transportation Secretary Elizabeth Hanford Dole's plan to sell Conrail to Norfolk Southern for $1.2 billion. Several midwestern railroads have challenged the deal, which would create the nation's largest rail system and reduce the number of major roads east of the Mississippi River from three to two.
Dole told The Washington Post in a recent interview that, for the deal to go through, Norfolk Southern must reach agreements with rail labor and with regional railroads such as the CNW, which are concerned about losing too much traffic to the merged giant, and must agree to some limits on the tax deductions it could gain through acquiring Conrail.
That interview has been interpreted by some of Norfolk Southern's opponents as an attempt by Dole to put distance between herself and Norfolk Southern. Claytor has since met with Dole and said he is "not the least" concerned that the administration's support is weakening.
He told the subcommittee yesterday that Dole "expressed enthusiastic support for the transaction. I join her in urging . . . Congress to act on this as quickly as possible."
"Really, she was just stating the obvious," Claytor said in the interview. "There are certain things where we are the primary parties, [such as] the other carriers, labor."
A senior department official said yesterday that Dole's commitment to Norfolk Southern is "undiminished." Claytor said that he and Dole will be meeting together with key members of Congress to answer questions about the deal.
Norfolk Southern has reached an agreement with New York State's transportation department and is seeking similar agreements with other states. Such agreements make it easier for members of Congress to vote for the package.
Claytor said the strategy is to get Senate approval while building support in the House. He also reiterated his position that if there is no "substantial progress" by the end of the year, Norfolk Southern would have to consider withdrawing its offer. "I'm leaving my options open," Claytor said.