Norfolk Southern’s Alan Shaw: ‘We’re not done. We’re going to continue to get better’

By Maria Saporta

When Alan Shaw became CEO of Atlanta-based Norfolk Southern 15 months ago, he had no idea what the future would bring.

Less than a year later, on Feb. 3, a Norfolk Southern train carrying toxic vinyl chloride derailed in East Palestine, Ohio. Three days later, the decision was made to have a controlled burn of the toxic materials rather than risk there being an uncontrolled explosion that could have been more catastrophic.

Over the last six months, Shaw has demonstrated his leadership style and Norfolk Southern’s core values. Shaw sat down on Aug. 10 for an exclusive one-hour interview at the company’s new headquarters in Midtown.

“We talk around here that crisis reveals character. It tests your resolve,” Shaw said. “It gives you an opportunity — if you’re willing — to self-reflect and look for your vulnerabilities. When Feb. 3 happened, we immediately went to our North Star. I pulled the team together, and I said, we are going to make it right. We’re going to do the right thing here. Because I’m really focused on keeping my commitments to our four key stakeholders. We are going to develop a solution.”

Norfolk Southern’s four key stakeholders are its customers, employees, shareholders and the communities it serves.

“When you’re in the running to become CEO, you really are focused on your vision and what kinds of strategic things that you’re going to implement,” Shaw said. “But the first day you sit in that chair, it becomes really clear to you, it’s all about accountability. Becoming a CEO is about accountability.”

Immediately after the derailment, Shaw became a presence in East Palestine — a pattern that continues almost every week or every other week.

“I made sure that I put myself in difficult positions when I was up in East Palestine, and I made sure I was in the churches and in the businesses and the schools and the family rooms — having real really difficult discussions with people,” Shaw said. “I knew we were going to make it right. I didn’t know what that looked like. But I knew that we were going to bring Norfolk Southern resources to this. And I knew the community needed to tell me where it needed to go.”

So far, Norfolk Southern has committed nearly $69 million “with a lot more to come to East Palestine and the surrounding areas,” Shaw said. About 300 Norfolk Southern employees have been assigned to work on environmental assessment and the community. 

Shaw asked one of the 15 permanent Norfolk Southern employees who lives in the area — Jeremy Vranesevich — giving him the authority to spend up to $1 million on ways to help the community.

On a more personal note, Shaw also is investing $450,000 of his own money in a college scholarship program for East Palestine seniors. They will receive $1,000 a year for every year they’re in school. The first four scholarships have been made, and the plan is to award four scholarships every year.

To better understand Shaw, almost everything he does can be traced to his family.

“I was raised by three women. I lived with my grandmother, my aunt and my mom,” Shaw said. “I’m very fortunate to have been surrounded by highly achieving women. My grandmother raised four kids while working at William & Mary as an executive assistant in the financial aid office. She would give money to kids who came into the financial aid office. She kept cash in her drawer that she would give to them.”

He credits his grandmother’s values to the way he responded to the derailment.

“She was about doing the right thing,” Shaw said. “That’s what got me out of bed every morning. I didn’t know what today was going to look like. But I know I’ve got to be the one who represents Norfolk Southern here. I’ve got to be the one who faces the fire. That means facing in the fire… in East Palestine and in D.C. with our regulators.”

When asked about what caused the derailment, Shaw referenced a report from the National Transportation Safety Board (NTSB) that “focused on the catastrophic failure of a rail car that Norfolk Southern doesn’t own. No railroad owns it. It was owned by customers, and it was on three railroads before it touched Norfolk Southern,” Shaw said. “So that tells me this requires an industry response. Norfolk Southern is going to lead the industry.” Norfolk Southern has announced a six-point safety plan, which includes more hotbox detectors, more research and development for hotbox detectors, and it is partnering with Georgia Tech on a next-generation machine visioning train inspection portal that uses automated intelligence to find potential safety issues. 

“We can always get better at safety,” Shaw said. “There is no end game with safety. Last year, the number of derailments on Norfolk Southern was the lowest in two decades, But I know we can do better, and we’re doing better again this year. “

Later, referencing East Palestine, Shaw added: “We’ve made a lot of progress. But again, we’re not done.”

Shaw is especially proud of a letter signed by him and the leaders of the railroad’s 12 largest unions.

“I told them that I wanted their help with this,” said Shaw, adding such cooperation is unprecedented. “You won’t see anywhere else. You’ve got an open letter from me, co-signed by 12 of those labor leaders, that talks about collaborating on safety… We’re going to be the gold standard of safety in the rail industry.”

To reach that gold standard, Shaw brought on Admiral Kirk Donald to be an independent voice to help the company advance. Donald used to be in charge of the Navy Nuclear Propulsion System.

“My first job out of high out of college was working at Newport News (Navy) Shipyard– building and installing nuclear reactors on aircraft carriers,” said Shaw, adding that the 75-year-old Navy nuclear program has never had a release of materials that has harmed the environment or personnel.

Shaw, 55, is all too familiar with the dangers of toxic materials. 

“My father succumbed to Agent Orange when I was a college freshman,” Shaw said. “He had done two tours in Vietnam and got three purple hearts. He battled cancer for seven years.”

When asked if that experience had made him more sensitive to the potential dangers of toxic materials in East Palestine, Shaw answered: “Of course it did. It gave me a lot of empathy for what the community was going through.”

Norfolk Southern said environmental agencies are continuously testing the water and air to make sure it’s safe.

“Beyond that, we’re setting up a long-term health care fund so in the event, somewhere down the road, something happens, those medical expenses will be covered,” Shaw added.

But during his conversations with the families in East Palestine, Shaw did not share the story of his father’s death.

“It’s not about me,” said Shaw, who said his job was to listen. 

Sitting in his office which used to be a conference room, Shaw is committed to being accessible to all of Norfolk Southern’s employees. He walks around the building and visits employees in their offices to “put his finger on the pulse” of the company.

“First place I go every morning when I come to work, if I’m working in the building, is I stop by our Network Operation Center, which is on the fourth floor,” Shaw said. “It is kind of our mission control.”

That led us to talk about the Fortune 500 company’s decision to move its headquarters to Atlanta in 2018, building a new tower in Midtown and moving there in November 2021. 

“The move to Atlanta has driven alignment,” Shaw said. Before moving from Norfolk to Atlanta, Norfolk Southern’s key businesses were in three different cities. 

“A well-functioning railroad is going to have really close alignment between marketing, operations, finance and human resources, but they were in three different places,” Shaw said.

It was particularly important to have the headquarters in Atlanta during the East Palestine derailment because Shaw could easily reach out to folks in the building. Although Covid has changed the nature of work, Shaw said people come to work to enjoy the building’s amenities – its Tiny Tracks daycare center, its gym, its food court and openness to the community. The lobby and the front garden are open to the public.

“I’m really happy to have this building. It’s an asset for our employees,” Shaw said. “You’re looking at Georgia Tech’s football stadium. More importantly, when people go to Georgia Tech football games, they’re looking over here and they see the NS logo. That’s not by accident.”

By moving to Atlanta, Shaw said they knew they would “have to up our game” to attract a diverse and technology-savvy workforce.

“That’s what we’ve done,” Shaw said. “Atlanta brings a bunch of other benefits as well. It’s a community unlike any other in which I’ve lived in that the business community works very, very well with the public sector.” 

Shaw was especially complimentary of Atlanta Mayor Andre Dickens, and he said it’s important for Norfolk Southern to give back to the community. The company’s annual philanthropic budget has doubled — from $9.1 million to $18.2 million. And the railroad’s executives are getting involved in the community.

For Shaw, it’s important for Norfolk Southern to stay true to its strategic vision and its transformation from a commodities-based business to one serving a consumer-oriented market that can compete with trucks while being a more environmentally friendly mode of transportation.

He says the goal of its intermodal business is to provide the simplicity of trucks and the efficiency of rail in a sustainable way. Plus, he said railroads are far safer than trucks in moving hazardous materials.

Shaw also said he is open to exploring opportunities for more passenger rail on its lines.

“I met with Stephen Gardner, who’s the president of Amtrak, earlier this week,” Shaw said during the Aug. 10 interview.

“I know that Norfolk Southern over the last 10 years has more passenger rail service than any other railroad,” Shaw said, adding that the railroad announced additional passenger service between Raleigh and Charlotte in July. 

“There’s a working template in which we work with local, state and federal authorities to make sure that we can be successful with it in terms of providing a reliable service product that will attract users and also be able to continue to serve our existing customers.”

Again, Shaw mentions the four key stakeholders — employees, shareholders, customers and communities.

But for Shaw, there is a fifth stakeholder — his family.

When Shaw was moving from Virginia to Atlanta, he did not want to move his children, including his son Grant who was going to be a rising senior. But his son told him he wanted to move to Atlanta because he didn’t want to break the family apart.

The good news is the move went well, and all the children ended up at Pace. Grant ended up giving the invocation at his high school graduation.

“My family got exposed to a lot of things associated with East Palestine,” Shaw said. One of the things that kept me going and got me up every morning was not only keeping my promises to our employees, our customers, our shareholders and the communities we serve, including East Palestine. But also I realized I was a role model for NS and my family. My family got exposed to this and they’re watching to see if I’m keeping my promises and doing the right thing.”

That included his wife, Tiffany, who he described as “a badass.” She majored in environmental science and once worked at Norfolk Southern in its safety and environmental department. 

“That’s the ultimate accountability because I have to go home every night and look at them in the face,” Shaw said. “They’ve got to know that I’m doing the right thing. They’re proud of what I’m doing. But I’m very clear to them. We’re not done. We’re going to continue to get better.”