(NewsNation) — Norfolk Southern’s costs related to the East Palestine train derailment have grown to more than $1 billion, and the railroad plans to cut 7% of its managers this year, company officials said on a quarterly earnings call Friday.
Norfolk Southern’s total estimated cost tied to the February 2023 derailment is now $1.1 billion, up $150 million from the previous quarter.
That total includes $836 million for environmental response and remediation efforts, as well as $381 million for legal costs and community assistance. The company said it has recovered $101 million from insurance so far, lowering the total financial impact.
“I’m proud that our team responded decisively and responsibly to protect this great franchise and our shareholders and to address the community’s concerns,” Norfolk Southern CEO Alan Shaw said of the derailment.
Shaw said the company plans to reduce “management headcount” by roughly 7% to “offset (cost) increases in critical operating areas.”
The company paid out $652 million for costs related to the East Palestine incident last year, but costs are expected to grow over time because the cleanup is still ongoing and Norfolk Southern faces several lawsuits. It’s also unclear exactly how much insurance will cover.
Shaw said the company has kept its promises in Ohio and made safety improvements, noting the railroad saw a 42% reduction in the mainline accident rate compared to 2022.
This is a developing story that will continue to be updated.
