Norfolk Southern Corp. on Friday announced plans to cut almost 200 jobs by the end of the year from its Triple Crown Services subsidiary.
The action is expected to slow – but not necessarily derail – local economic development efforts to create an intermodal hub, officials said.
Triple Crown plans to eliminate about 193 positions on or after Nov. 17, according to a WARN Act notice filed with the state. The Worker Adjustment and Retraining Notification Act requires companies planning mass firings or layoffs to notify state and local officials at least 60 days before the effective date.
Of those, about 160 to 170 are in Fort Wayne, said Jim Newton, the company’s president. The rest are based in 11 other terminals in the eastern half of the U.S.
In the filing, the company described the affected workers as highly skilled and requested "priority service" in helping them find new jobs.
Triple Crown uses specialized equipment called the RoadRailer to ship freight for customers. The convertible containers can be used both as rail cars and semi trailers. But they can’t be attached to traditional rail cars, Newton said.
Norfolk Southern officials decided it would be more efficient to move most shipments in conventional semi trailers, which ride stacked one or two high on top of flat railroad cars, he said.
After the reorganization, Triple Crown will exclusively move auto parts between Detroit and Kansas City, where Ford and General Motors have large assembly plants.
Other types of shipments will be shifted to existing Norfolk Southern lines and rail cars, which officials believe have enough unused capacity to absorb the increased loads without the affected workers being transferred to those locations, Newton said.
Alan Shaw, Norfolk Southern’s executive vice president and chief marketing officer, described the change as a natural evolution.
"We want to retain the best of TCS in specific markets, with efficient door-to-door logistics and award-winning customer service," he said in a statement.
"The RoadRailer equipment is unique and aging, and this was a contributing factor in the reorganization," spokeswoman Susan Terpay said in an email. The newest RoadRailer equipment will remain in use and the rest will be phased out.
Triple Crown, which is headquartered at 2720 Dupont Commerce Court, now employs 226, including about 200 locally. The job cuts will affect headquarters employees and workers at the company’s Fort Wayne terminal and maintenance facility at 2536 Wayne Trace.
Norfolk Southern, which has annual revenue of about $350 million, will continue to employ more than 2,000 in Indiana after the workforce is downsized, officials said.
The company is providing severance pay and job placement assistance to affected workers, who may apply for open positions within Norfolk Southern.
Timing for the terminations will depend on business demands, Terpay said. Affected workers will include those in customer service, dispatch, sales, accounting and trailer mechanic positions, she said.
Newton said worker salaries average about $45,000. Other local employers started calling him as soon as the news was announced Friday, expressing interest in hiring the workers, Newton said.
The long-term outlook for the local Triple Crown operation is uncertain. It could eventually move, Newton said.
Terpay said the remaining employees will be located in Fort Wayne for at least six months. It’s unclear what the company plans to do after that.
It was unclear late Friday afternoon how Triple Crown’s restructuring plan affects local economic development officials’ hopes of expanding the Triple Crown rail yard to provide East Coast intermodal rail service. Intermodal infrastructure allows the easy transfer of train cars to and from semi rigs.
The project is included on a priorities list released in August by the Conexus Indiana Northeast Regional Logistics Council. The council plans to lobby state legislators to fund the infrastructure projects based on priorities set by representatives from the surrounding 13-county region.
The 36-person group considered the included projects the most critical for expanding opportunities in advanced manufacturing and logistics. But that was based, in part, on Triple Crown’s presence there.
Newton, a logistics council member, speculated that the company’s reduced presence undercuts the need for the intermodal hub in the short term.
John Sampson, president and CEO of the Northeast Indiana Regional Partnership, said the local intermodal hub project doesn’t depend on the RoadRailer technology. The concept works with traditional rail cars.
And a business case can still be made for the investment, because shipping freight by rail is cheaper and faster than by over-the-road transportation, Sampson said. Being able to offer a direct rail line to the deep-water port in Norfolk, Virginia, would help northeast Indiana attract more manufacturers and logistics operations, which means more jobs, he said.
"I think," he said, "this is a short-term setback."