POSTMODERN ROBBER BARON
Elon Musk Is Planning a 'Utopian' Company Town Called Snailbrook

Nikki Main
Thu, March 9, 2023 

Elon Musk is reportedly planning his own Utopian town

Tesla, Twitter, SpaceX, and Boring Company CEO Elon Musk is adding one more title to his resume: town owner. The multi-billionaire is reportedly working on building his own “utopia” in Texas and plans to name it Snailbrook.

The Wall Street Journal reports that Musk plans to build the town outside of Austin near his Boring and SpaceX facilities which are currently under construction, according to the outlet. Facebook photos revealed the area already has a collection of modular homes, a pool, an outdoor sports area, and a gym, and already has signs posted that read: “Welcome, snailbrook, tx, est. 2021.”

According to the Journal, Musk’s plans include building a place for his employees to live and charging them roughly $800 per month for one and two-bedroom homes, with the caveat that they would have 30 days to vacate the premises if they were laid off or quit. Although the plans are still in the works, it seems like a good time to ask: Is this even a good idea?

Companies have been lapping up towns for decades, creating a place where they could establish a monopoly of power in an area for their wide-ranging companies and make a profit from their employees. The idea, in essence, sounds good—work for an employer and you get to live in the town with access to all the amenities for a discounted price. But what happens when things go south?

Company towns have a long history of creating so-called utopias for their workers but also created towns that were akin to a prison camps where employers are the landlord and the shopkeep and everything else one could need. Many towns were built by coal companies and the workers often lived in poverty and abuse.

The majority of the company towns were built on the labor and skill set of the workers without adequately paying them or providing normal living standards. According to The Smithsonian, when the coal, steel, and textile industries were booming in the early 19th Century, companies built the towns to require their workers to live in basic housing and sent the kids to company-owned schools where the students were only taught information from the boss’s perspective.

The workers also didn’t receive adequate compensation and were paid in scrip rather than regular money. Scrip was a currency that workers could only use at the company store which often drastically increased its prices by about 20% more than other establishments outside the compound.

While these town models are thought to exist in the past, they are still around today. With Elon Musk showing himself to be a right-wing task master who reportedly fires employees on a whim, loathes safety regulations, fosters discriminatory workplaces, and generally seems to believe laws don’t apply to him, do we really want him running his own town? He already started his own school for his kids, do you think he’s above trying to pay employees with a ScripCoin token?

Elon Musk is reportedly building his own town in Texas

Chris Morris
Thu, March 9, 2023 

Elon Musk has reportedly bought thousands of acres of land about 35 miles outside of Austin and plans to build his own town there for employees to live and work.

The Wall Street Journal reports Musk has described the city as a “sort of Texas utopia along the Colorado River.” By creating the town, Musk would be able to set some of the city’s regulations. Last year, at an all-hands meeting of Boring employees, president Steve Davis reportedly talked about holding an election for mayor of the city.

The proposed municipality is said to be adjacent to the Boring and SpaceX facilities that are currently under construction, and to already include some modular homes and signs hang from poles reading “welcome, snailbrook, tx, est. 2021”

Snailbrook is the name of Boring’s mascot.

Musk reportedly wants to offer rental houses to workers that are well below the local market value. One ad allegedly put the price of a two- or three-bedroom home at $800, compared to $2,200 a month in nearby Bastrop, Texas. There are also plans for a Montessori school in the municipality

Texas law requires an area to have at least 201 residents before it can incorporate. Plans, which the Journal shows in its story, call for the construction of 110 more homes in the area where Snailbrook is located.

Over the past three years, entities tied to Musk have bought at least 3,500 acres in the general Austin area. The Journal says some reports indicate Musk controls as much as 6,000 acres.

Musk first came to Texas two years ago, abandoning California and calling it the land of “overregulation, overlitigation, overtaxation.” Last month, though, Tesla announced plans to expand its California presence, moving its engineering headquarters to the state.

Should Musk be building his own city, he won’t be the only Texas billionaire to own a town. In 2021, Dallas Mavericks owner Mark Cuban purchased the entire town of Mustang, Texas for an undisclosed amount.

The city had been for sale since 2017, originally with an asking price of $4 million. It eventually dropped to $2 million, but still couldn’t find a buyer. Mustang is located about an hour south of Dallas in Navarro County, right off of Interstate 45. At 77 acres, though, it’s nothing close to what Musk reportedly has in mind.

This story was originally featured on Fortune.com

Biden’s World Bank pick wins backing of Nobel laureates, leaders



Julia Mueller
Thu, March 9, 2023 

President Biden’s pick to lead the World Bank, former Mastercard CEO Ajay Banga, is getting public backing from a group of Nobel Prize winners and civil society leaders.

More than 50 signatories on a letter shared by the Partnership for Central America say Banga is “the right person to lead the World Bank at this critical moment,” lauding his commitment to climate change and “deep appreciation for the global south.”

“A truly global citizen, Ajay has extensive experience living and working in developing economies. Importantly, as a leader with deep appreciation for the global south, he intuitively understands that economic growth can only be sustained if people and nature thrive together, not apart,” the letter reads.

“He understands that the World Bank must serve as a force multiplier by setting the right agenda and then catalyzing action across governments, the private sector, multilateral development banks, civil society, and philanthropies.”

Among the signatories who say they “look forward” to Banga being selected by the World Bank’s board of directors are the CEOs of Mercy Corps, CARE USA, Girl Rising and Habitat for Humanity.

Joseph Stiglitz and Michael Spence, recipients of the 2001 Nobel Prize in Economic Sciences, and Muhammad Yunus, who received the 2006 Nobel Peace Prize, also signed on.

Biden nominated Banga, a U.S. citizen who was raised in India, last month.

“Raised in India, Ajay has a unique perspective on the opportunities and challenges facing developing countries and how the World Bank can deliver on its ambitious agenda to reduce poverty and expand prosperity,” Biden said.

Banga would replace David Malpass, who led the World Bank during the Trump administration and stepped down this week after pressure from Democrats.

Malpass came under fire for comments criticized as implying climate change denial. In nominating Banga, Biden stressed that his new nominee “has critical experience mobilizing public-private resources to tackle the most urgent challenges of our time, including climate change.”

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Intel’s Troubles Run So Deep Even Bulls Are Wary

Jeran Wittenstein and Ian King
Thu, March 9, 2023 

(Bloomberg) -- With the most sell ratings in the Nasdaq 100 Stock Index, Intel Corp. is running ever lower on fans. Things have gotten so bad that even analysts brave enough to recommend buying are striking a cautious tone.

One of those, Srini Pajjuri at Raymond James, reasons that the chip designer’s “many problems” are unlikely to get much worse in the near term.

“We believe that the 2023 bar is low enough and expect the company to benefit from cyclical tailwinds and aggressive cost cuts,” Pajjuri wrote in a note last week, resuming coverage with an outperform recommendation.

Another advocate, Gus Richard at Northland Securities, is sticking to his outperform rating, even after saying that buying the stock in the wake of January’s ugly earnings report would likely make investors “physically ill.”

The root of Intel’s woes stems from ceding its leadership position in the crucial area of manufacturing technology to Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. Those companies provide outsourced production to Intel’s competitors such as Advanced Micro Devices Inc., allowing rivals to field better products and grab market share.

Of the 45 analysts tracked by Bloomberg who cover Intel, just nine have a buy equivalent rating on the stock. That’s after the shares slumped 45% in the past 12 months, putting the Santa Clara, California-based company on the verge of falling below $100 billion in market value for the first time in a decade.

With 11 sell ratings, Intel is in a league of its own in the Nasdaq 100, where more than 95% of recommendations are buy or hold. Tesla Inc. and Cognizant Technology Solutions Corp., the companies with the second-highest number of sell ratings in the gauge, have just six each.

Rarer still is a company of Intel’s size that has more sell ratings than buys. Only two other Nasdaq 100 members — Cognizant and Fastenal Co. — are in this position, and their market values are less than a third as big.

Chief Executive Officer Pat Gelsinger is spending heavily on new plants and products to try to reassert Intel’s dominance, a plan that’s costing billions in increased spending as his company’s revenue and cash flow shrink. The consequences of that strategy were made evident last month when Intel slashed its dividend by 66% to the lowest level in 16 years.

Those analysts standing by the company are telling investors they’ll need to be patient and wait for new products built with better production techniques to come to the rescue. No one is predicting a near-term upswing.

For Daniel Morgan, senior portfolio manager at Synovus Trust Co., the current loathing of Intel is reminiscent of the aftermath of the dotcom bubble in 2002 that proved to be a nadir for the stock.

“We’re not going to abandon the stock,” said Morgan, whose firm holds more than 400,000 Intel shares. “We’re going to see if over time they can get through this tough space. Eventually you find a bottom when it gets so oversold and everyone gets too negative on it.”

WORKERS CAPITAL
New York City’s Pension-Fund System Plagued by Inefficiencies



Martin Z. Braun
Thu, March 9, 2023 

(Bloomberg) -- New York City’s pension fund system for retired city workers is plagued by ballooning costs stemming from redundancies.

The cost to administer benefits to about 340,000 retirees and beneficiaries, has grown by more than 40% to about $270 million since 2018, according to an analysis of the funds’ financial reports by Bloomberg. A member of the city audit committee brought attention to the funds’ spending and inefficiencies at a recent meeting.

There’s five retirement funds — one for teachers, non-teaching staff, police officers, firefighters and civil servants — and each have separate offices, staff and computer systems. And two of those funds are in the middle of multimillion-dollar technology upgrades.

New York pays employees out of one payroll system, but “as soon as they retire, we need five different systems to figure out how to pay them their pension benefit,” said Bud Larson, a former senior city budget official who recommends streamlining operations, at a Jan. 23 city audit committee meeting. Created in 2009, the committee reviews financial statements and approves the city’s hiring of auditors and actuaries.

In 2018, the city’s Independent Budget Office estimated that consolidating the five pensions into three, could save $20 million in the first year, and then $41 million two years later. The police and firefighter funds, which have similar retirement plans, could merge into one system, IBO said in a report. And employees covered by the fund for school employees, like crossing guards and cafeteria workers, could be transferred to the civil servants’ or teachers’ pension.

Last month, New York City Comptroller’s Brad Lander called on the state’s Department of Financial Services to review the pension fund for schools’ non-teaching staff, where spending has grown about 170% in five years. New York City’s Board of Education Retirement System’s $35 million budget exceeds the budget of the police pension, which has almost twice the membership. Thomas Sheppard, co-chair of BERS, didn’t immediately respond to an email request for comment, while co-chair Donald Nesbit hung up the phone on a Bloomberg reporter.

Last year, the city contributed $9.6 billion to the funds, which have about $250 billion in assets. Employees contributed about $2.5 billion, according to the funds’ financial statements.

The five funds, independent entities created by state law, have more than 1,100 employees who work out of their own offices. The teachers’ pension, for instance, spends $8.6 million a year to rent space in a lower Manhattan tower that’s owned by Alabama’s retirement system. The police fund leases offices for $6.7 million in the Woolworth Building, a national landmark designed by Cass Gilbert.

While administration is a big contributor to costs, investment management remains the primary expense for pensions. Investment expenses rose to $1.5 billion for the year ending June 30, Those fees are deducted from pension contributions and earnings.

More than a decade ago, former New York City mayor Michael Bloomberg, the majority owner of Bloomberg News parent Bloomberg LP, and then Comptroller John Liu proposed consolidating the investment management of the five pensions into a single independent investment board. Managing money internally would save the city $1 billion a year, they said. That proposal was pulled because some unions wouldn’t be represented on the new board and individual pensions wanted to maintain control over investment decisions.

Mayor Eric Adams has championed efficiencies and promised to reduce bureaucratic bloat, but like previous administrations has to win over each pension’s board to kick off any overhaul. Although the mayor and comptroller are members of the pension boards, power resides with trustees representing politically formidable public employee unions.

Elected officials “aren’t too interested in upsetting the apple cart,” said Larson, who as of Feb. 16 is no longer a member of the audit committee. “Unions like the fact they get to control something.”

So rather than pursue a consolidation of pensions, which would require a change in state law, the funds could take gradual steps to spur efficiency, like centralizing tech operations, Larson added.

Deb Stewart, a spokesperson for the $80 billion civil servants pension, the New York City Employees’ Retirement System, or NYCERS, declined to comment about any potential consolidation of tech or staff. The fund has already embarked on a $230 million upgrade of its 1980s-era mainframe computer system, spending about $40 million so far.

Meanwhile, the $49 billion police pension is overhauling its software, which it estimated in 2018 would cost between $57 million and $76 million over six years. Nicole Giambarrese, general counsel at the New York City Police Pension Fund, declined to comment.

In an email, Lander said his office carefully reviews all five pensions’ budgets, particularly on tech projects.

All expenses undergo extensive layers of review, according to Jonah Allon, a spokesperson for Adams. “In our capacity as trustees of the funds, we heavily scrutinize every purchase,” Allon said.

Egypt withdraws from UN grain treaty prompting sadness and concern

A farmer tends wheat at a field in the El-Menoufia governorate, north of Cairo

Thu, March 9, 2023 
By Aidan Lewis and Sarah El Safty

CAIRO (Reuters) - Egypt, one of the world's largest wheat importers, has given notice it will withdraw at the end of June from a decades-old U.N. grains treaty, causing consternation among some other signatories to the convention.

Egypt's departure from the multinational Grains Trade Convention (GTC), which promotes market transparency to further trade cooperation, follows a period of turmoil in grains markets linked to the war in Ukraine and concerns about global food security.

Egypt signed the GTC, the only international treaty covering trade in grains, at its inception in 1995, and has been a member of the council that governs it since 1949. In February it submitted a request to withdraw with effect from June 30, 2023.

"This came without prior information. Several delegations within the IGC are surprised and sad about the decision," Arnaud Petit, executive director of the International Grains Council, which administers the treaty, told Reuters.

Several members would ask Egypt to reconsider its decision, he added.

Egypt's foreign ministry told Reuters in a statement that the decision was made after an assessment by the ministries of supply and trade concluded Egypt's membership in the council delivered "no added value".

Other signatories to the GTC include major grain importers and exporters such as the United States and the European Union.

Two sources familiar with the matter, who asked to remain anonymous, told Reuters that Egypt owed the IGC membership fees. The foreign ministry did not respond to a question about fees.

Traders told Reuters they did not expect an impact on the grains market, but one diplomatic source said that symbolically, Egypt's departure from a multinational organisation could be seen as concerning.

The war in Ukraine disrupted Egypt's wheat purchases last year and the government held talks with countries including India as it tried to diversify from Black Sea supplies.

Despite those efforts, Egypt relied on competitive Russian imports to boost its reserves through traditional tenders, some funded by the World Bank, as well as non-traditional direct offers.

The economic impact of the war also exacerbated a foreign currency shortage in Egypt, leading to a slowdown in imports, a backlog of goods in ports, and a $3 billion financial support package from the IMF.

In January, Egypt's government instructed ministries to curb non-essential spending until the end of the fiscal year.

(Reporting by Sarah El Safty and Aidan Lewis; Additional reporting by Nigel Hunt and Nafisa El Tahir; editing by Barbara Lewis)

I'm an Amazon employee who's worked remotely since 2021. Now that we're returning to the office soon, I worry I'll lose the productivity and work-life balance I perfected during the pandemic.

Sarah Jackson
Thu, March 9, 2023

An Amazon program manager who has never set foot in the office says she dreads the enforcement of Andy Jassy's return-to-office mandate come May.

Amazon will require that employees return to the office at least three days a week starting in May.


One employee who has worked remotely worries what will happen if her military family has to move somewhere without an office site.


"The biggest issue employees have with this is we want to understand how the decision was made, but we're not getting any answers," she said.

This as-told-to essay is based on a conversation with an Amazon program manager and military spouse who has worked remotely since joining the company. Insider has verified their employment, but isn't naming them in order to protect their career. This essay has been edited for length and clarity.

My husband has been active duty for 20-plus years. He's gone on multiple deployments, which meant moving every two years, so it was hard for me to keep my jobs. Every time we moved, I was starting over — always at the bottom again.

Raising my daughter while my husband was deployed, I was always lectured that I needed a backup plan whenever I had to call out because my daughter got sick. In one job interview, I was told, "Oh, you're a military spouse, you're going to be gone soon; we need somebody permanent."

Eventually, I found work in federal contracting, but I got out in anticipation of my husband looking to possibly retire. My work there couldn't be done remotely, so if my husband retired, I wouldn't have been able to take it with me.

At the time, Amazon was remote due to COVID, and I'd also heard that the company worked with military spouses when they had a change in duty station.

I joined Amazon in 2021, and they've let me work fully remotely as a military spouse; I haven't gone into the office once.

With Andy Jassy's return-to-office announcement, I'm concerned what it will mean for me. Will I be able to get an exception? My family will probably have to move this summer, and I don't know what will happen if we have to move somewhere that doesn't have an Amazon corporate site. My managers are supportive, but they don't know what this will look like yet. Amazon touts itself as being military-friendly, but when they roll out these policies, are they really thinking through how a blanket policy like this could affect us?

My particular team is all spread out, so my return to an office feels kind of pointless. If we're working well the way that we're doing it now, why change that?

I'm also more productive working from home — there's more noise and distraction in the office versus when I'm at home and can focus solely work.

I can flex my schedule for doctor's appointments or if a global partner I'm working with needs something. Working in the office will make these things more challenging.

Employees are wondering whether there will be enough room for everyone since Amazon hired a lot during the pandemic. Are people going to be assigned desks? I don't want to fight over desk space 3 days a week.

Amazon prides itself on being data-driven, so when you make a policy like this without numbers backing it up, it goes against our leadership principles. People are speculating that they're doing this because they want employees to quit without having to fire them, or because of tax breaks.

We want to understand how the decision was made, but we're not getting any answers. Leadership hasn't come out with any policies or procedures beyond the announcement.

I don't feel like there was any empathy or forethought of how this affects their entire workforce. We just went through two rounds of job cuts, so employee morale is down from the layoffs. People are already on edge, and now they're adding this, too. It's like, what else will they throw at us? I think there's been a loss of trust.

To say in 2021 that "there is no one-size-fits-all approach for how every team works best," and then to turn around and give us exactly that is a huge misdirection.

I love my job. I'm calling this return-to-office plan a speed bump, and I hope leadership will do the right thing to accommodate everyone, but it's going to be a waiting game to see how everything is rolled out.

Sanders introduces bill to raise minimum teacher pay to $60,000 a year


Stephen Neukam
Thu, March 9, 2023 

Sen. Bernie Sanders (I-Vt.) introduced legislation on Thursday that would make the minimum pay for public school teachers in the U.S. $60,000 a year, following calls from President Biden to give teachers a raise last month.

The Pay Teachers Act of 2023, co-sponsored by a number of lawmakers including Sens. Elizabeth Warren (D-Mass.) and Ed Markey (D-Mass.), would provide states with federal funds to establish minimum teacher salaries of at least $60,000 a year. It would also triple the funding of the Title I-A program, which provides funding to schools with a high percentage of students that come from low income backgrounds.

“It is simply unacceptable that, in the richest country in the history of the world, many teachers are having to work two or three extra jobs just to make ends meet,” Sanders said in a statement. “No public school teacher in America should make less than $60,000 a year.”

The bill would also triple funding for rural education programs and prop up programs to diversify the teacher workforce.

The push from Sanders to boost public teacher pay comes after Biden included a call for raises for public educators in his State of the Union address last month.

“Any nation that out-educates is going to out-compete us,” Biden said in the speech. “Let’s give public school teachers a raise.”

Sanders has blasted the pay of public school teachers in the U.S. in the past, and cited rising levels of stress and increasing trends of teachers quitting as the reason why the federal government needed to support them.

The legislative push by Sanders has garnered the support of the National Education Association, the largest labor union in the country.

Lawmakers in the House introduced legislation late last year to increase the minimum wage of teachers in the U.S. to $60,000. The American Teacher Act, sponsored by Reps. Frederica Wilson (D-Fla.) and Jamaal Bowman (D-N.Y.), would encourage states to raise their minimum salaries for teachers through a federal grant program.

Hiring is so hard for a Montana builder that it's flying in construction workers on a private jet

Zinya Salfiti
Thu, March 9, 2023 

Construction workers.Visoot Uthairam/Getty Images

A Montana builder finds it so hard to hire locally that it's flying in workers on a private jet instead.


It's more economical to rent the jet, it told the Federal Reserve's Beige Book survey.


The tight labor market is a target of the Fed as it tries to bring down inflation by hiking interest rates.

A Montana building company is finding it so hard to hire locally that it's flying in workers on a private jet instead.

That's what it told the latest Beige Book survey, which gathered information on economic activity from the Federal Reserve's regional branches up to late February.

"A Montana construction firm has found it economical to rent a jet to fly workers into one of its plants to fill operational needs," the report published Wednesday read.


The firm said hiring locals "would be our first choice, but we had to adjust when we could not staff that way."

It's yet another sign of a tight labor market, where openings outstrip the number of workers available to fill them. It won't please the Fed, which wants to see the market ease so that wage pressures won't drive inflation.

At the same time, though, the Beige Book showed a large drop of construction projects in Montana, likely the fallout from the Fed's aggressive interest-rate hikes, which have helped drive up borrowing costs.

Some companies could be "hoarding" workers — hiring them even though they don't have a current need for them, as the market is so tight, analysts have said.

Official figures showed the US added far more jobs than expected in January, coming in at 517,000 compared with predictions for 185,000.

The Fed has raised interest rates at a historically fast pace over the past year to try to cool high rates of inflation.

Friday will bring the February reading on jobs growth, and investors will watch for it for clues on what the Fed will do next in interest rates. A hot labor market tends to fuel inflation, as it puts upward pressure on wage growth.

Investors now expect the Fed to keep hiking for longer following Chair Jerome Powell's hawkish testimony before Congress this week. Expectations for a 50-basis-point increase in March helped drive a selloff in stocks in the wake of his comments.

Read the original article on Business Insider

Dangerous 'forever chemicals' were found in turf at the Philadelphia Phillies' old stadium after six former players died of same cancer, investigation finds

Aaron McDade
Thu, March 9, 2023

Veterans Stadium, where the turf used in the stadium may have contained dangerous "forever chemicals" for decades.

MLB via Getty Images

"Forever chemicals" were found in turf that was used in the Philadelphia Phillies' old stadium.


The chemicals were revealed as part of an investigation by the Philadelphia Inquirer.


The Inquirer was researching whether there was a link between the turf and ex-Phillies dying of brain cancer.

An investigation into the deaths of six former Philadelphia Phillies players from the same type of brain cancer has found that the artificial turf where they played for years contains dangerous compounds commonly referred to as "forever chemicals."

Following former Phillies relief pitcher David West's death last year, reporters from the Philadelphia Inquirer purchased pieces of the AstroTurf available for sale online to have them tested for chemicals. The artificial turf was used for years and replaced several times at Veterans Stadium, where both the Philadelphia Eagles and Phillies played from 1971 to 2003.

The Inquirer hired a lab to test for 70 different per- and polyfluoroalkyl substances, which are commonly referred to as PFAS or "forever chemicals." The Centers for Disease Control and Prevention considers them dangerous because they do not break down easily in the environment and can contaminate drinking water.

The tests performed by Eurofins Lancaster Laboratories Environmental Testing found 16 PFAS in the turf samples, including perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS), according to the Inquirer. PFOA and PFOS are two of the most-studied PFAS, as they have been produced and used the most.

The American Cancer Society says studies in animals and humans have linked the chemicals to certain types of cancer, but further research is required to clarify a definitive link.

The labs that performed the tests told the Inquirer that the levels present in the turf would be concerning if they were found in drinking water, but less is known about the effects of repeated skin contact with the chemicals.

The turf used in the stadium, where recorded temperatures were regularly over 100 degrees during summer Phillies games, also could have released chemical vapors that were inhaled by the players, according to the Inquirer.

The Phillies responded to the report, saying several brain cancer experts have told the organization there is no proven link between the turf and the deaths of the six players, who all died before the age of 60.

However, the Inquirer reported that other experts cited studies finding PFAS in brains — one by Chinese researchers that found the chemicals in brain tumor tissue, and another by Italian scientists that found PFAS in the brains of people who drank water contaminated with the chemicals.

The Phillies played their last game at the stadium in September 2003 and it was demolished in March 2004.

The six former Phillies — Tug McGraw, Darren Daulton, John Vukovich, John Oates, Ken Brett, and David West — all died of glioblastoma, an aggressive form of brain cancer. The tumor is most common among those in their demographic: white men between the ages of 40 and 70, a neurologist told the Inquirer.

But the rate at which it was found in the over 500 Phillies who played on the turf for years is about three times higher than the average rate, according to the Inquirer.

Feds looking into Norfolk Southern's handling of additional reported hazmat concern weeks after East Palestine

LUCIEN BRUGGEMAN
Thu, March 9, 2023

Federal regulators are looking into a previously unreported incident involving Norfolk Southern potentially mishandling a conductor's concern on a train carrying hazardous material just weeks after a similar defect precipitated the derailment in East Palestine, Ohio.

According to a complaint obtained by ABC News, on the morning of Feb. 27, a Norfolk Southern train was lurching through Stoneville, North Carolina, when a safety official manning a hot-box detector desk in Atlanta radioed the crew to alert them that car number 32 was "trending hot," but not hot enough to trigger an alarm, and that the nearly two-mile train should proceed.

The conductor of the train checked his manifest and made a startling discovery: Car 32 was carrying ethanol, and five cars away, another was carrying propane. Both were labeled as "dangerous" on the train's manifest, according to the complaint, which was filed with the Federal Railroad Administration.

MORE: NTSB to open special investigation into Norfolk Southern following recent derailments

The complaint alleges that the conductor, now concerned that the "trending hot" warning could lead to an overheated wheel, radioed the desk back and suggested that they stop the train and inspect it. But the dispatcher overruled the crew and urged them onward.

Meanwhile, a maintenance worker in the train's vicinity allegedly overheard the radio chatter and offered to observe the train as it passed by. The complaint states that when the worker reported that he hadn't witnessed any smoke, the crew was told to keep going some 40 miles south to Winston-Salem, North Carolina.

Crew members were "shocked," according to the complaint. To continue into a heavily populated area after being notified that a car carrying hazardous materials was "trending hot" could potentially pose a profound threat not only to the crew, but to adjacent communities, crew members feared.

Ultimately, the train was able to complete its trip without further incident. But the Federal Railroad Administration is now looking into the previously unreported Feb. 27 incident as part of a broader "safety assessment" of Norfolk Southern, a spokesperson confirmed. The agency said in a press release this week that its assessment would scrutinize "operational control center procedures and dispatcher training," among other things.

A spokesperson for Norfolk Southern did not immediately respond to a request for comment on the record.

PHOTO: Workers continue to clean up remaining tank cars, Feb. 21, 2023, in East Palestine, Ohio, following the Feb. 3, Norfolk Southern freight train derailment. (Matt Freed/AP, FILE)

The reported incident on Feb. 27 raises fresh safety and accountability concerns regarding Norfolk Southern and the rail industry at large, three weeks after a wheel bearing overheated on a Norfolk Southern train carrying hazardous materials through East Palestine, derailing the train and causing an environmental crisis for nearby residents.

Over the past two decades, major rail carriers and trade groups have spent more than $650 million lobbying in Washington, often advocating against stricter government oversight of its safety procedures, according to the federal watchdog OpenSecrets.

In the wake of the East Palestine derailment, a bipartisan group of lawmakers led by Ohio Sens. Sherrod Brown, a Democrat, and J.D. Vance, a Republican, introduced legislation that would tighten government-backed safety requirements for trains carrying hazardous materials.

But some Senate Republicans have balked at the bill, leaving its fate in question. Sen. John Thune, R-S.D., has said that "an immediate quick response heavy on regulation needs to be thoughtful and targeted."

Norfolk Southern, for its part, has already taken steps to self-regulate. Earlier this week, CEO Alan Shaw laid out a six-point plan to "immediately enhance the safety of its operations," the company said. The initiative will improve its defect detector network, pilot next-generation hot bearing detectors, and generally support a more stringent safety culture, according to officials.

MORE: NTSB on East Palestine toxic train derailment: '100% preventable'

On Wednesday, the Association of American Railroads, a trade group representing major freight railroad companies, announced its own list of new measures, including a commitment "to stopping trains and inspecting bearings whenever the temperature reading from a [hot bearing detector] exceeds 170° above ambient temperature" -- a lower threshold than previously required.

But federal regulators aren't waiting around. In addition to the Federal Railroad Administration safety assessment, the National Transportation and Security Board has taken the extraordinary step of opening a special investigation into Norfolk Southern.

The agency said Tuesday it would scrutinize the company's "organization and safety culture" after a series of incidents, including the derailment in East Palestine and another derailment in Springfield, Ohio, earlier this month. A press release did not list the reported Feb. 27 incident in North Carolina.

"The NTSB will conduct an in-depth investigation into the safety practices and culture of the company," the agency said in a statement. "At the same time, the company should not wait to improve safety and the NTSB urges it to do so immediately."

Rail unions are also pressing for more government oversight. After the death of a Norfolk Southern conductor earlier this week near Cleveland, Eddie Hall, president of the Brotherhood of Locomotive Engineers and Trainmen, called for "significant improvements in rail safety for both workers and the public."

MORE: East Palestine derailment: Timeline of key events in toxic train disaster

"All railroad accidents are avoidable," Hall said.

Shaw, the Norfolk Southern CEO, said in a statement Tuesday that Norfolk Southern would "cooperate fully" with the NTSB and continue to find new solutions to improve the company's safety practices.

"We are going to invest more in safety," Shaw said. "This is not who we are, it is not acceptable, and it will not continue."

Shaw is scheduled to testify Thursday on Capitol Hill before the U.S. Senate Environment and Public Works Committee.

Feds looking into Norfolk Southern's handling of additional reported hazmat concern weeks after East Palestine originally appeared on abcnews.go.com