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Industry Groups Oppose Conrail Takeover

The proposed takeover and breakup of Conrail by CSX Transportation and Norfolk Southern Railway is drawing strong opposition from shippers. In comments to the Surface Transportation Board, two U.S. trade associations representing industries that ship heavily--the Chemical Manufacturers Assn. (CMA) and the Society of the Plastics Industry--said that "shippers should not be asked to bear the very substantial risks created by Norfolk Southern's and CSX's multibillion-dollar bidding war." CSX and Norfolk Southern can pay for their purchase of Conrail stock "only if they faultlessly execute their strategy of increasing traffic while cutting personnel and costs substantially," CMA and SPI warned. "It is doubtful this can be done," they added. If the Surface Transportation Board approves the takeover, the two trade groups said it should at least adopt a number of binding conditions, including a provision for continued board oversight of rates and service.

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