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CSX rail president resigns
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April 11, 2000: 11:34 a.m. ET
Conway leaves CSX Transportation as safety, earnings problems linger
By Staff Writer Chris Isidore
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NEW YORK (CNNfn) - Ronald Conway resigned as president of troubled railroad CSX Transportation "to pursue other interests," the company announced Tuesday.
John Snow, the chairman and chief executive of railroad parent CSX Corp. (CSX: Research, Estimates), will assume Conway's duties. Conway, 56, will stay on as a consultant.
 A former head of operations at Conrail, Conway came to CSX in 1998 when the former government-owned freight railroad was purchased by CSX and Norfolk Southern Corp. (NSC: Research, Estimates). The two railroads split Conrail between them and started integrating the system into their networks on June 1, 1999. The company's statement thanked Conway for his role integrating about half of the former Conrail into CSX.
However, the integration has not gone as smoothly as originally planned, causing service problems for customers and hurting CSX earnings. The company had to warn in December that it would badly miss its fourth-quarter results, and while some of that was due to problems as the ocean-shipping unit it had sold, continued service problems played a role as well.
In addition, two weeks ago a report from the Federal Railroad Administration cited widespread problems with CSX track conditions, which caused it to put speed restrictions on large parts of its system. Conway was quoted at that time calling the condition of the railroad's track, "unacceptable."
Customers see little improvement
But while Norfolk Southern had worse congestion problems in the beginning, it has continued to make progress since that time, according to Ed Rastatter, director of policy for the National Industrial Transportation League, one of the largest trade groups of rail customers.
Meanwhile, storms such as Hurricane Floyd last September caused problems for CSX from which it has yet to recover, Rastatter said.
"I don't see any consistent trend toward improvement at all," said Rastatter, who said he had no comment on Conway's departure from the railroad.
 In addition, CEO Snow seemed to acknowledge continued earnings and operations problem at the railroad in his statement.
"CSX has a terrific opportunity to grow earnings substantially," said Snow's statement. "Our job now is to sharply focus the entire organization on the overriding goal of enhancing shareholder value by stepping up the pace of operations, making this the safest railroad possible and bringing customers the level of rail service they want and need. We've done that before, and now is the time to do it again."
Analysts surveyed by First Call predicted the company to earn 16 cents a share in the first quarter, down from 36 cents a share in the year-earlier quarter. Earnings for the year are predicted to be $2.11 a share, compared with $1.59 a share in 1999.
Shares of CSX gained 5/16 to 22-5/8 in trading Tuesday. 
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