by Mike Sharkey
Staff Writer
By this time next week, CSX Transportation president Michael Ward expects to be a member of the rail company’s board of directors. The distinction will be another accolade for Ward, who has enjoyed 25 years with CSX.
In addition to keeping the company, pardon the pun, on the right track, Ward said CSX may eventually consolidate its corporate headquarters into one location. Today, CSX’s headquarters is still officially in Richmond, Va., but with 5,100 employees scattered over the First Coast, it may prove logical to put everyone under same roof.
“We have brought a number of people down here the last couple of years. You are talking about 50 people versus 5,100 people,” said Ward, referring to the Richmond office. “John Snow is the chairman of the board and until he retires, the headquarters will probably stay in Richmond.”
Ward explained that Snow plans to enter semi-retirement in a year and will officially step down in two years. At that time, the 12-member board of directors will take a serious look at moving CSX’s corporate headquarters to Jacksonville.
“We will probably consider it at that time. It’s not a decision we will make now. But we do have the bulk of our employees here,” said Ward, who started with CSX in 1977 as a research analyst in Baltimore. “Most of our board is retired and a few live in Florida down in the West Palm area. They would probably like the idea of moving our headquarters to Jacksonville because it would mean less travel time to board meetings.”
In addition to talking about the company’s future, Ward and several other high-ranking officials hosted a media outing Tuesday to showcase the corporation’s dedication to safety, community involvement and the industry’s public perception. After a train ride to Yukon Station near NAS and back, Ward hosted a round table discussion in which each executive offered thoughts on their area of expertise.
Ward explained that one of the biggest obstacles facing the railroad industry today is perception. Unfortunately, trains are an underutilized mode of transportation for people while being the largest, safest carrier of freight in the country — although few know the second fact. That paradox has also contributed to the declining sexiness and glamour that characterized train travel the first half of the 20th Century.
Ward noted that 70 percent of the country’s cars and 30 percent of the country’s grain are transported by rail. CSX also moves its share of coal, a natural resource that the country still depends on much more than most realize.
“Almost 50 percent of the country’s electricity is generated by coal and 65 percent of that coal is moved by rail,” said Ward, who was named president in 2000. “We bring most of the coal in here that JEA uses to produce electricity.”
Ward explained that one of the problems CSX faces is the perception that trains are dirty, unsafe and the company doesn’t care about either of those facets. Under Ward’s guidance, CSX is in the middle of a campaign to reintroduce the public to rail travel and expand its customer base.
“You hear about our train wrecks, but rail is actually the safest mode of transportation in the country,” said Ward. “Chemical companies love the railroads.”
When Ward was named president, he immediately set out to improve every facet of CSX, from employee attitude to customer relations. He also recognized that turning the company around would be impossible without the right people in the right places, all working for a common good.
From late 1999 until early 2000, Ward examined the company from top to bottom and didn’t like everything he saw. While a complete overhaul wasn’t necessary, changes were in store.
“We were not doing a good job for our customers and we were spending a lot of money,” said Ward.
One of the first things Ward did was to create a new management team. Alan Crown, who joined CSX in 1966, was named executive vice president transportation. Michael Giftos, who joined CSX in 1974, was named executive vice president and chief commercial officer. And, Ellen Fitzsimmons, who joined CSX in 1991, was named senior vice president, law and general counsel.
The group’s impact has been felt company-wide.
“We have a new management team in place and is has helped a lot,” said Ward, explaining that their customers are happier and profits are rebounding. “We did not create anything brand new, we just implemented the company’s existing policy.”
Giftos agreed with Ward’s assessment that the changes have been worthwhile.
“These have been confusing times recently, but over the last two years there has been a dramatic improvement in the railroad product,” said Giftos. “The industry has not grown in years and this company is committed to growing in the next two years.”
Crown said CSX will continue to improve on its already impressive safety record, with safety being at or near the top of CSX’s priority list.
“We moved 445,000 loads of hazardous materials last year and we had 17 releases due to derailments,” said Crown. “That’s 99.9 percent, but that’s not good enough.”
Fitzsimmons said the company is committed to changing the public’s perception of CSX and the railroad industry in general. She pointed to the controversial King’s Road crossing as a prime example of where CSX failed.
“We saw it as a deadly crossing,” said Fitzsimmons, admitting the company was wrong to push so hard to have the crossing closed, a decision opposed ardently by those who live and work in the area. “The process took too long to recognize what was wrong. We should have sat down with the people of that community.”