CSX will write off $755 million in 4th-quarter results Most of charge to earnings due to employee buyout offer

January 09, 1992|By Ted Shelsby

CSX Corp., the descendant of the Baltimore and Ohio railroad, said yesterday that it would take a $755 million pretax write-off in the fourth quarter of 1991, sidetracking any chance the company had of posting a profit last year.

The Richmond, Va.-based international transportation company said that $634 million of the total charge to earnings was related to an employee buyout program designed to cut costs and boost productivity.

In the first nine months of 1991, the company had profits of $280 million. Suzanne S. Walston, a spokeswoman for CSX, declined to estimate how much the company might lose for the year.

CSX reported net income of $461 million on revenues of $8.2 billion in 1990.

On Tuesday, CSX announced that it was shifting 350 jobs and the last vestiges of a railroad headquarters from Baltimore to Jacksonville, Fla.

The company will still employ about 3,000 people in Maryland, including 1,000 in Baltimore. Several CSX business units also will remain, and shipments of coal, grain and steel through the port have all been increasing.

CSX Transportation Inc., the railroad arm of CSX, also announced Tuesday that it would seek to eliminate about 325 jobs over the next year through its company-wide buyout program. It is currently in negotiations with unions representing rail workers to reduce the number of on-train employees and dramatically improve productivity.

Sea-Land Service Inc., the container shipping unit of the company, had previously announced plans to eliminate 250 jobs worldwide as part of a consolidation and realignment of two divisions and various terminal operations.

Ms. Walston said the parent company has not set a number or percentage figure for the total work force reduction that it expects from the buyout program. CSX currently has 49,237 employees.

John W. Snow, chairman and chief executive officer of CSX Corp., said in a statement yesterday that the changes reflected by the fourth-quarter charge would reduce costs at both CSX Transportion and Sea-Land Service Inc., strengthen the company financially and sharpen its competitive edge.

"These changes will eliminate redundancy, improve productivity and enhance future performance throughout CSX Transportation and Sea-Land," he said.

"We are confident they will allow us to maintain our momentum despite continuing uncertainty in the economy and give us substantial opportunities for earnings improvement when the economy recovers," Mr. Snow added.

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