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Corporate Greed Is a Root Cause of Rail Disasters Around the World

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Lambert here: This is from Late March, but I think it’s good to have all these three cases, from Canada, the United States, and Greece — all gathered together in a single post, with the blame cannons correctly positioned.

By Justin Mikulka, a research fellow at New Consensus. Prior to joining New Consensus in October 2021, Justin reported for DeSmog, where he began in 2014. Justin has a degree in Civil and Environmental Engineering from Cornell University.. Originally posted at DeSmog.

p>On February 25, Greece experienced its deadliest rail disaster ever when a freight train ran headlong into a passenger train coming towards it on the same track, killing 57 people. This tragic accident, near the city of Larissa, occurred just weeks after the East Palestine, Ohio rail disaster, and while the outcomes are different, the root cause is the same: corporate greed and deregulation. 

While two trains colliding on the same tracks might seem unfathomable to Americans, it shouldn’t be. A similar accident occurred in Texas in 2016, a year after the U.S. rail industry refused to meet a Congressionally mandated deadline for installing a safety system called positive train control, which would have prevented the accident.

Threatened with a rail shutdown, Congress buckled and gave the industry an extra three years to install the safety system, with the option for an extension until the end of 2020. On December 29, 2020, the Federal Railroad Administration announced that positive train control was finally installed on all of the required rail lines.

As DeSmog has reported, the U.S. rail industry has lobbied against the requirement to install positive train control since 1970. In fact, one rail lobbyist received an award for being “part of a successful push for a congressional agreement to extend a deadline for automated trains on most of the nation’s railways.” The National Transportation Safety Board first recommended positive train control in 1970 after two Penn Central commuter trains collided head-on near Darien, Connecticut, the previous year. Four people were killed and 43 were injured.

The Greek rail system was supposed to have installed modern safety technologies like positive train control three years ago but instead followed the path of the U.S. rail industry and delayed the installation. Meanwhile, in response to Greece’s government debt crisis, international financiers and the European Commission for years have pushed the nation toward deregulation and privatization.

During the March 9 U.S. Senate hearings on rail safety, we learned Norfolk Southern, the rail company responsible for the East Palestine disaster, cut a third of its employees between 2002 and 2020. In January 2020, the Washington Post reported how Wall Street “cheered on” large staff cuts at Norfolk Southern. While the company was cutting staff, Norfolk Southern executives were receiving bonuses which incentivized running longer trains. 

The Greek rail system was privatized in 2017, when Trainose, the state rail company operator in Greece, sold the rail line to an Italian company which reduced employee headcount to 800, down from 6,000 in 2010. 

These two recent accidents also echo the root causes of the deadly 2013 Canadian oil train disaster that took 47 lives in Lac-Mégantic, Quebec. A Canadian columnist described it as a “corporate crime”. DeSmog documented how corporate cost-cutting led to the disaster. 

In Canada, the engineer of the oil train involved in the Lac-Megantic accident was criminally charged and held responsible. In Greece, the station master, who advised one of the trains involved to “Pass the red signal,” was arrested and, if convicted, faces a long prison term. The New York Times reported that other rail employees explained these red warning lights were “always red because of years of technical failures” and employees instead used walkie-talkies to advise trains on risks.

As James K. Galbraith, an economist at the University of Texas at Austin, wrote of the Greek station master’s arrest, “How convenient that there is someone to blame.”

Galbraith also points the finger at the Greek government’s choice to protect corporate profits over the public, even as the nation’s railway system failed to maintain basic safety equipment. In America, rail lobbyists get awards for doing just that — and here too, the public pays the price.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

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12 comments

  1. upstater

    Norfolk Southern continues with having derailments, 2 this weekend. They’re trying hard to win a contest for management incompetence and disregard for safety.

    Train derailment in Jasper [Alabama] injures two crew members

    A locomotive and 11 train cars derailed in Jasper on Saturday night, briefly trapping and injuring two crew members, Norfolk Southern and Jasper police said in statements released today.

    The locomotive rolled on its side, spilling diesel fuel and engine oil. The two injured crew members were briefly trapped in the engine room, according to Jasper police. The crew members were taken to a hospital, treated and released, Norfolk Southern said.

    Norfolk Southern train derails in Pittsburgh

    No causes are given. But short-staffing and deferred maintenance are likely involved.

    ICYM, NYT had an excellent article about job cuts and harassment of unionized employees last week, citing PSR as a cause. They report job cuts have been 39%. $18B on share buybacks and dividends in recent years.

    Norfolk Southern’s Push for Profits Compromised Safety, Workers Say

      1. wilroncanada

        Probably not. They will be more likely to lose a half-day’s pay over not being on the job for their 8-plus hours.

  2. mrsyk

    I see that Norfolk Southern had two separate derailments in the last 24 hours. The accident in Pittsburgh has resulted in petroleum distillate leaking into the Allegheny.

    1. orlbucfan

      What else is new? This type of environmental destruction and human injury will keep going down until some serious white-collar criminal a(family blog)s are put in genuine prisons–for life!

      1. some guy

        That could be something ( among a small number of key somethings) that a Social Democrat New Deal Party-Movement could establish itself on and begin running candidates for office on.

        The tragedy is that building a viable non-fraudulent Party-Movement takes decades. It took the legitimate Populist Party decades in the late 1800s. And we may not have decades left. And that is the tragedy.

        The hostility of Brand Name Parties, the existence of millions of malignant metastatic Clintonoma
        tumor cells ready to invade such a new emerging party, etc. are not “tragedies”. They are merely part of the battlespace and part of the enemy.

  4. RobertC

    My railroad friends and I want a ride China’s self-developed high-temperature superconducting electric suspension transportation system with a speed of up to 600km/h realizes the first suspension operation

    A Canadian explains how standardization is the key ingredient for China’s metro railway success The Mass-Produced Metros of China | Rapid Transit Standardization

    Why we can’t have nice things: private equity, hedge funds, high frequency trading, … the financialization of America.

  5. Tommy Wrinkles

    In Europe I don’t think rail networks make any economic profit at all. SNCF (French) as an example made E2.4b profit last year…. but at the same time the government “absorbed” E30b of their debt. In the UK train/track companies don’t even make an operating profit on average, but they get by with a net subsidy from the state. Capital investment (like hs2, new TGV lines) are additional government expenditure.

    A quick google suggests Trainose receives E50m per year from Greece as a subsidy to run the train services.

    So that baity headline about “Corporate Greed” doesn’t make sense when these companies make perpetual losses. Compromises in safety are entirely the fault of the state, both as treasurer and regulator.

    1. upstater

      US and Canadian private railroads have virtually no passenger service. They receive very little government subsidies, and most of those are for infrastructure shared by passenger trains in urban areas. Their operating ratios are all around 60% (ie, profit margin EBIDTA 40%). They are wildly profitable. Google “cult of the operating ratio”.

      European railroads haul little freight and are primarily passenger corridors. Loss making of exclusively passenger railroads in the US (eg, Amtrak, NY MTA, Boston T, etc) have huge government subsidies to operate.

  7. Adam1

    A couple weeks ago I witnessed an egregious disregard for safety and courtesy done by CSX. They had sent ONE employee to work on a crossing in our village. The crossing handles over 17,000 cars a day. And here this lone man is trying to repair something on one of the gates which requires the signal to be active, but only one of the gates is down. Without a second person there to direct traffic total chaos ensues. It also probably took him twice as long to complete his task as he could only work for so long before he would have to stop and manage the traffic situation.

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