A native son-American railroading-is leaving town

January 08, 1992|By John H. Gormley Jr.

CSX made it official yesterday. Baltimore, where the American railroad industry was born over a century and a half ago, will lose the last vestiges of a railroad headquarters later this year, when 350 jobs are transferred to Jacksonville, Fla.

"The key decision-making operations will be consolidated in one headquarters in Jacksonville," Donna W. Rohrer, a spokeswoman for CSX Transportation, said yesterday.

That decision culminates the gradual erosion of Baltimore's importance as an administrative center for CSX Transportation Inc., the railroad arm of CSX and one of the nation's biggest railroads.

CSX has been shifting key executives from Maryland to Florida ** for years. But a substantial part of the railroad's marketing operations remained in Baltimore. By next summer all of those marketing departments will have moved to Florida.

"This isn't happening in a sudden manner," Ms. Rohrer said.

She said the decision was part of an evolutionary process. "What we've announced today is the conclusion of that process."

Under a three-part organization structure created in 1986, Baltimore was headquarters for two of the railroads three divisions, marketing and equipment. The third division, operations, was based in Jacksonville.

But CSX has been gradually moving back toward a more centralized operation. Two years ago, the railroad's head of marketing was moved to Jacksonville, although he continued to maintain an office in Baltimore. Last summer, CSX announced that it was eliminating the Baltimore-based equipment division.

That left Baltimore with some equipment and marketing functions, even though the top executives were all in Jacksonville. By September those departments will also have moved to Jacksonville.

Mark L. Wasserman, Maryland's secretary of economic and employment development, said, "This is the residue of decisions made a long time ago. It's regrettable, painful, but there seemed to be an inevitability about it."

In the decade since Baltimore-based Chessie System Inc. and Jacksonville-based Seaboard Coast Line Industries merged to form CSX, Baltimore has suffered from recurrent waves of fear that it would lose jobs to Jacksonville or Richmond, Va., headquarters of the railroad's parent corporation.

In November, the state heard rumblings that Baltimore was in danger of losing more jobs. Gov. William Donald Schaefer requested a meeting with CSX Chief Executive John W. Snow. When that meeting took place in Annapolis last month, Mr. Snow revealed his plans, which he said were irreversible. Mr. Snow told the governor "the die was cast," Mr. Wasserman said.

Taking the long view, the die may have been cast 30 years ago, when the Chesapeake and Ohio merged with the Baltimore and Ohio to form the Chessie System. Once the B&O, the nation's first commercial railroad, came under the domination of the C&O, Baltimore began its decline as the central headquarters for a major railroad.

Jervis Langdon, who was president of the B&O at the time of the merger, recalls that C&O officials "gave every assurance that Baltimore would continue to be headquarters for the B&O."

But within a few years, the Cleveland-based C&O began calling the shots. Operations of the two railroads were more closely coordinated and the C&O "began moving people to Cleveland," Mr. Langdon said.

That process has continued ever since, according to John P. Hankey, chief curator for the B&O Rail Museum in Baltimore. Mr. Hankey, who worked for CSX from 1980 to 1986 as brakeman, fireman and engineer, said he has come to believe that in some ways Baltimore was fortunate to have kept the vestiges of a railroad headquarters for as long as it did.

The Chessie System and CSX both made conscious decisions to go slow in consolidating operations following mergers. "It was part of the Chessie and CSX corporate system to do these things gradually, to wait things out," he said.

CSX could have moved everything to Florida in the early 1980s. "They deliberately wanted things to happen gradually with the least pain possible. By and large, that's been the case," Mr. Hankey said.

That gradual process may have helped Baltimore adjust psychologically as well as economically to the loss of status, Mr. Hankey said. During the early 1970s people here exhibited "old-time Baltimore righteous indignation" over the transfer of B&O officials to Cleveland. But when CSX officially killed the B&O as a legal entity in 1987, "most people didn't care," he said.

So when the end finally came yesterday, resignation and sadness were evident rather than anger. "There is a kind of poignancy, the last vestiges of corporate headquarters here in Baltimore," Mr. Wasserman said. "It suggests we are at a historic juncture."

CSX has tried to assure officials that even though Baltimore has lost its function as a railroad headquarters, the railroad is still committed to Maryland and will remain an important part of the state's economy.

Several CSX business units will remain, and train operations in the state actually increased with the closing of a rail yard in Alexandria, Va., and the transfer of that yard's trains to a state-owned rail yard in the port of Baltimore.

After the transfer of the 350 jobs to Jacksonville, CSX will still employ about 3,000 people in Maryland.

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