Send EmailBy Bob Sechler
CSX Corp. CSX -2.93% furloughed about 280 employees in the first
quarter and put about 100 locomotives into storage, in what Chief Executive Michael Ward characterized as a "surgical" response to a big downturn in demand for coal from electric utilities.
The railroad industry overall furloughed thousands of employees during the recession and put large numbers of locomotives and freight cars into storage, although most have been brought back as the economy has rebounded.
"This is a much different situation," Ward said in an interview Wednesday. "It's much more surgical this time."
He said the latest move is strictly
related to CSX's coal business, where first-quarter volume slumped 14% from the year-ago period amid decade-low prices for natural gas, high stockpiles at electric utilities and unseasonably warm weather.
Volume was up 0.6% overall, and Ward noted that the figure would have been up 6% excluding coal bound for electric utilities.
"We still think [the U.S. economy] has some reasonable vibrancy" and is continuing to grow, he said.
At the peak of the economic downturn, CSX had nearly 3,000 employees on furlough and more than 700 locomotives in storage.
Ward also said the latest move isn't "a complete furlough," because the employees are able to work two days a week and maintain healthcare and other benefits.
CSX had 32,393 employees at the end of the first quarter, up 6.4% from the year-ago period.
