There are a lot of reasons for opposing the Reagan administration's decision to sell Conrail to the Norfolk Southern Corp. It would diminish competition in some areas. It would threaten the jobs of some of Conrail's employees, not to mention top management. It would turn over to private owners, for $1.2 billion, a system into which the federal government has invested $7 billion in nine years of public ownership. But despite all those objections, sale to Norfolk Southern looks like the right solution for Conrail.
The best choice is the one that provides the strongest promise of a rail system that can operate profitably and efficiently, without further financial crises and risk of collapse. After careful review, Secretary of Transportation Elizabeth Hanford Dole decided last week that the sale to Norfolk Southern most clearly met that test.
The administration has wanted from the beginning to return Conrail to private hands. Constructed from the wreckage of the Penn Central and several other failed or failing railroads, it was a case of emergency intervention by the federal government to maintain an essential service to the industrial Northeast and Midwest. But if the system could be made to operate profitably, why should it continue in government ownership? That's a legitimate question, and the issue now is not whether to sell Conrail but rather to whom. Another possibility is to keep it independent, under private ownership. But an independent system would be vulnerable to the same forces that undercut the Penn Central. It would serve the same region, with the same declining base of manufacturing industry. Conrail's traffic is lower now than when it was first formed. Joining it to the large and profitable Norfolk Southern rail system provides better hope of financial stability.
The Justice Department has looked carefully at the markets in which a merger would reduce competition and, in a letter to Mrs. Dole two weeks ago, outlined a remedy. If Conrail divests several strategic lines before the merger, Justice said, adequate competition could be preserved. The implications here are a subject for the congressional hearings that will shortly begin. As for jobs, raising productivity will mean fewer jobs regardless of who owns the railroad.
There's a certain parallel here between Conrail and Chrysler. In both cases Congress acted to prevent an industrial collapse that it considered intolerable. In both cases, there was a possibility of a continuing government role in the European style. Resisting that outcome, Chrysler struggled vigorously and successfully to return itself fully to private control. The time has come for Conrail to move in the same direction.