Pennsylvania State Senate Introduces Resolution Opposing CP-NS Merger
PRINTER’S NO. 1504
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE RESOLUTION
No. 262 Session of 2015
INTRODUCED BY RAFFERTY, YAW, ALLOWAY, GREENLEAF, VULAKOVICH, SCHWANK, WOZNIAK AND BARTOLOTTA, JANUARY 19, 2016
REFERRED TO TRANSPORTATION, JANUARY 19, 2016
A RESOLUTION
Urging the United States Surface Transportation Board, the United States Department of Justice, the United States Department of Transportation and the Congress of the United States to reject any plans submitted by Canadian Pacific Railway to acquire Norfolk Southern Corporation and to consider the potential negative impact of the proposal with respect to building a more efficient freight network in this Commonwealth.
WHEREAS, Norfolk Southern employs more than 5,200 Pennsylvania residents, operates more than 2,300 route miles of track and 22 rail yards and intermodal terminals throughout this Commonwealth, has operating division headquarters in Pittsburgh and Harrisburg, maintains its primary locomotive repair shop in Altoona and connects with 48 Class 2 and Class 3 railroads in this State; and
WHEREAS, In 2014, Norfolk Southern Corporation invested $151,000,000 in its tracks and facilities in this Commonwealth, purchased more than $1,000,000,000 in goods and services from Pennsylvania vendors, was responsible for $34,400,000 in State and local taxes and originated or terminated more than 1,700,000 freight shipments in this State; and
WHEREAS, This Commonwealth has more freight railroads than any other state in the United States and has worked successfully with Norfolk Southern Corporation on a series of significant public-private partnerships to further strengthen the Commonwealth’s freight rail network; and
WHEREAS, On November 9, 2015, Canadian Pacific Railway submitted an unsolicited proposal to acquire Norfolk Southern Corporation and has subsequently made public statements that if it acquires Norfolk Southern Corporation it is targeting $1,800,000,000 in “synergies” that would be achieved through locomotive and rolling stock fleet reductions, the rationalization of rail yards and other facilities, a lower tax rate, potentially resulting in significant employment reductions, decreased investment in transportation infrastructure and poor freight rail service to shippers doing business in Pennsylvania; and
WHEREAS, The chief executive officer of Canadian Pacific Railway expressed his intent to immediately assume control of
Norfolk Southern Corporation by taking over as chief executive officer of Norfolk Southern Corporation during the United States
Surface Transportation Board’s review of the transaction through a “voting trust”; and
WHEREAS, Congress has given the United States Surface Transportation Board the power to keep the best interest of consumers in mind when considering proposed mergers, especially an acquisition of this scale; and
WHEREAS, Any attempt to circumvent the role of the United States Surface Transportation Board and threaten the sovereignty of a competing railroad should be taken seriously; and
WHEREAS, The public interest of Pennsylvania is not served by indiscriminate actions that would result in poor freight rail service to shippers doing business in Pennsylvania; and
WHEREAS, The men and women of Pennsylvania who serve in the United States Armed Forces benefit from American-owned infrastructure used to transport military equipment and that infrastructure should not be jeopardized by the sale to a foreign company; and
WHEREAS, Any potential shift in traffic as a result of a transaction proposed by Canadian Pacific Railway should be carefully reviewed to protect the residents of Pennsylvania from shifts in the transportation of hazardous materials, including crude oil; and
WHEREAS, The Congress of the United States should review the rail industry’s current antitrust exemption which prevents the United States Department of Justice from stopping the merger even if a review produces evidence of restricted competition; therefore be it
RESOLVED, That the Senate of Pennsylvania urge the Congress of the United States to exercise due diligence on behalf of the citizens of this Commonwealth and of this nation by exercising regulatory control and oversight in order to maintain fair competition, adequate connections with short line railroads and efficient, low-cost service for rail shippers; and be it further
RESOLVED, That copies of this resolution be transmitted to the members of the United States Surface Transportation Board, the United States Secretary of Transportation, the United States Attorney General, the Speaker of the United States House of Representatives, the President Pro Tempore of the United States Senate and to each member of Congress from Pennsylvania.
