Norfolk Seeks Support for Conrail Merger

Norfolk Southern Corp. on Monday sought to blunt criticism of its proposed acquisition of Conrail by trying to gain labor support and denying the merger would reduce competition and harm shippers.

Robert Claytor, chairman of the railroad company, told reporters he is confident that “there will be no substantial lessening of competition” as a result of the merger, which was endorsed last week by the Reagan Administration.

He denied that rail rates might be increased and told reporters that the merger, which must still be approved by Congress, would reduce costs, which would be a benefit to shippers.

After the news conference, Claytor went to Capitol Hill to begin what is expected to be an intense lobbying effort in the coming weeks on behalf of the Norfolk Southern plan. Congress has said it wants to examine other purchase proposals as well, including one from Conrail Chairman L. Stanley Crane to sell the railroad through a public stock offering.

Meanwhile, Norfolk Southern President Harold Hall tried to explain the proposed Norfolk Southern-Conrail merger to a group of Conrail workers in Conway, Pa., but received angry questions from many of them wanting to know whether Norfolk Southern was prepared to provide them with lifetime job protection.

Hall’s answer was no.

Norfolk Southern has said it expects to cut about 2,500 jobs from the Conrail work force, but Claytor said Monday that about half of those workers most likely will have jobs at smaller regional railroads through a track divestiture plan that would be part of any Norfolk Southern-Conrail merger. Buy-outs for the workers who lose their jobs must still be negotiated.