Since the Presidential Emergency Board proposed an 18.6% increase in the wage rate for rail workers over a period of six years, rail companies have reached agreements with four unions.  Rail carriers such as Union Pacific Corporation (NYSE:UNP), Norfolk Southern Corporation (NYSE:NSC), and CSX Corporation (NYSE:CSX) and labor unions, representing 70% of rail workers, have been given a 30-day period ending December 6th to reach a settlement.
In other news, Norfolk Southern is constructing an intermodal yard in eastern Montgomery County. The project, with an estimated cost of $35 million, is expected to improve freight handling as the yard will be built near company’s existing track.  Separately, the freight carrier has selected not to refinance its $1 billion five-year revolving credit line from any European lender as turmoil in Europe mounts.  This highlights company’s reluctance to expose itself to additional risks.
We have a price estimate for Norfolk Southern at $91, implying around 25% premium to current market price.Notes:
- Freight Railroads Reach Agreements with Four More Unions, Bloomberg [↩]
- Norfolk Southern in process of buying land for intermodal yard, Roanoke.com [↩]
- Norfolk Drops European Banks From Refinancing, Wall Street Journal [↩]