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Chairman of Proposed Conrail Buyer Accuses Rival of ‘Scare Tactics’

May 10, 1985

WILLIAMSBURG, Va. (AP) _ CSX Corp. has resorted to exaggerated claims and scare tactics to get Congress to stop the sale of Conrail to Norfolk Southern Corp., says Norfolk Southern’s chairman.

″I remind you this is the same CSX that has consistently denied Norfolk Southern access to such important intermodal points as Baltimore and Philadelphia and that has protected its long hauls by closing gateways throughout its territory, particularly in the South and the East,″ Robert B. Claytor, chairman and chief executive officer of Norfolk Southern, said Thursday.

″This is the same CSX that seeks to arouse employee, shipper and community opposition by claiming that a Norfolk Southern-Conrail consolidation will necessitate CSX’s abandonment″ of almost all of the lines of the former Baltimore & Ohio and force CSX to furlough or dismiss large numbers of employees, he said.

″Nonsense. These exaggerated claims should be recognized for what they are: pure and simple scare tactics,″ Claytor told about 150 people at Norfolk Southern’s annual meeting.

In Richmond, CSX spokesman E.E. Edel responded: ″I am sorry to hear the chairman making those charges. We believe he is incorrect.

″The facts of the Conrail situation now being unveiled before the various committees of the Congress do not coincide with Mr. Claytor’s statements,″ Edel added.

He declined further comment.

Claytor said he has been listening ″with growing disbelief and dismay″ to recent CSX statements about what would happen if Congress endorsed Secretary of Transportation Elizabeth Dole’s recommendation that Conrail be sold to Norfolk Southern, a major railroad rival to CSX.

He conceded that the pace of the congressional debate over the sale has been painfully slow, in part because of the objections CSX has raised.

According to Claytor, CSX is ″trying desperately″ to promote a public offering as the logical alternative to a sale to Norfolk Southern.

″This is the CSX that invokes antitrust claims, completely disregarding the fact that the Justice Department has looked at the proposed acquisition from every angle and concluded that it would not oppose the consolidation as long as certain lines were divested and access were granted to other carriers at interchange points and gateways, conditions to which we have agreed,″ Claytor said.

After the meeting, he told reporters he did not intend for the prospect of a public offering of Conrail stock to be used as a lever to force Norfolk Southern to sweeten its $1.2 billion bid. ″We’re not going to be pushed up,″ he said.

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