takeover of Norfolk Southern Corporation by Canadian Pacific Railway
Chicago City Council Resolution February 10, 2016
Subject: Canadian Pacific Railway's Hostile Takeover Proposal of Norfolk Southern Corporation
Whereas, the Canadian Pacific Railway has proposed an acquisition ofthe Norfolk Southern Corporation, and
Whereas, the Norfolk Southern Railway Company, a wholly owned operating subsidiary of Norfolk Southern Corporation, operates more rail yards and intermodal facilities in the City of Chicago than any other Class I freight railroad, and
Whereas, Norfolk Southern employs a diverse workforce among its more than 600 Chicago-based employees including approximately 50% whom are of a minority descent, and
Whereas, Norfolk Southern operates four major intermodal facilities in the City of Chicago located at 361 West 47th Street, 169 East 63rd Street, 2040 East 106th St and 7540 South Western Avenue, and
Whereas, these four intermodal facilities provide a competitive edge to Chicago manufacturers and distributors connecting Chicago businesses to more markets in the Northeast, Mid-Atlantic and Southeast than any other railroad, and
Whereas, Norfolk Southern has invested tens of millions of dollars into each facility in recent years to accommodate the growth of business resulting in construction jobs for many Chicagoans, and
Whereas, the logistics savings to Chicago shippers from these four facilities generates billions of dollars of economic impact and millions of dollars of tax revenue to Chicago annually, and
Whereas, Norfolk Southern's other large rail yards within the City are located at 4016 South Ashland Avenue, 13227 South Torrence Avenue, and 2040 East 106th Street, and
Whereas, these rail yards provide critical service to rail shippers throughout the City including the Stockyards and the Port of Chicago, and
Whereas, Amtrak's Pere Marquettte, Wolverine, Blue Water, Capitol Limited, and Lake Shore Limited trains operate on Norfolk Southern in Chicago to get to and from Chicago Union Station, and
Whereas, Norfolk Southern's partnership with Amtrak has facilitated strong ridership growth for several years now resulting in more business travelers and tourists coming to Chicago, and
Whereas, much of Metra Southwest Service operates on Norfolk Southern tracks bringing commuters into Chicago for both work and leisure resulting in additional tax dollars to the City, and
Whereas, Congress has provided the Surface Transportation Board with the power to disapprove mergers and acquisitions in the railroad industry, and
Whereas, U.S. Senator Richard Durbin and the entire Illinois Congressional delegation have requested the Surface Transportation Board to move carefully in their examination ofthe hostile proposal by Canadian Pacific Railway to acquire Norfolk Southern Corporation, and
Whereas, Chicago is effectively the western terminus for the Norfolk Southern Railway and the Canadian Pacific Railway has minimal impact on Chicago's economy, and
Whereas, Norfolk Southern Railway has proven an effective partner with federal, state, and municipal agencies in the Chicago Region Environmental and Transportation Efficiency "CREATE" Program to reduce rail congestion within and through the City of Chicago, and
Whereas, since the CREATE Program's inception more than a decade ago Norfolk Southern has played an instrumental role planning, constructing, and paying for the private benefits of several CREATE projects resulting in a substantial reduction of freight, Metra, and Amtrak delays in recent years, and
Whereas, Canadian Pacific Railway refuses to acknowledge the substantial benefits the CREATE Program has already delivered and will deliver as more projects are constructed, and
Whereas, Canadian Pacific believes the only way to generate new rail capacity is through the hostile takeover proposal of Norfolk Southern and not by working collaboratively with federal, state, and local public agencies to complete more ofthe CREATE Program, and
Whereas, the Chicago Transportation Coordination Office "CTCO" located at 1501 South Canal Street was established by the railroads to better coordinate operational planning by appointing a senior transportation official from each respective company to be physically located in one building, and
Whereas, Canadian Pacific removed its senior transportation official from the CTCO and is the only Class I freight railroad not to participate in the CTCO, and
Whereas, the Chicago rail network is simply too complex and important for the nation's economy for any railroad to unilaterally decide it no longer needs to work collaboratively with public agencies and the rest ofthe railroad industry, and
Whereas, Norfolk Southern and Canadian Pacific interchange volumes through Chicago are too small to make a difference on congestion if a merger were to occur accounting for approximately 1.5% of Chicago freight volumes, and
Whereas, Canadian Pacific and Norfolk Southern do not physically connect in Chicago leading to an even heavier reliance upon the Belt Railroad of Chicago and Indiana Harbor Belt, two already congested terminal railroads with several conflicts with commuter and passenger trains, and
Whereas, any discussion of alternative gateways diverting freight trains should be carefully scrutinized as these few alternative gateways between Canadian Pacific and Norfolk Southern will add hundreds of additional miles for freight rail customers that can be used as alternative interchange points today, and
Whereas, any attempt at a proxy fight where Canadian Pacific and its major shareholders actively move to unseat Norfolk Southern's Board of Directors and senior management will needlessly take away
attention from CREATE, the CTCO, passenger and commuter rail collaboration, Chicago rail shippers and Norfolk Southern's ongoing capital investments within the City,
Now therefore, the City Council of the City of Chicago, in formal session, does hereby Resolve, that the Surface Transportation Board keep the best interests of the economy and citizenry of the City of Chicago uppermost in mind in reviewing the hostile takeover of Norfolk Southern proposed by Canadian Pacific.
attention from CREATE, the CTCO, passenger and commuter rail collaboration, Chicago rail shippers and Norfolk Southern's ongoing capital investments within the City,
Now therefore, the City Council of the City of Chicago, in formal session, does hereby Resolve, that the Surface Transportation Board keep the best interests ofthe economy and citizenry ofthe City of Chicago uppermost in mind in reviewing the hostile takeover offlorfolk Southern proposed by Canadian Pacific.
