Train Derailments Spur Congressional Hearings, Recession Remains Tough To Avoid, SiriusXM Joins Firms Announcing Layoffs
Train Derailments Spur Congressional Hearings
Just days after the second Ohio train derailment of the past month, the U.S. Senate has hearings scheduled for Thursday on what caused last month’s catastrophic crash in East Palestine. A derailment in the Cincinnati suburb of Springfield, Ohio, over the past weekend followed at least five other similar mishaps nationwide since 2021, and there are implications for the larger U.S. cargo logistics system.
Atlanta-based Norfolk Southern, the railroad involved in both Ohio derailments, announced a six-point plan on Monday that it said in a statement would “immediately enhance the safety of its operations.” Following a late February report on the crash from the National Transportation Safety Board, the railroad said it would enhance its network of detectors gauging excess heat on train wheel bearings, cited by federal officials as a cause of the East Palestine derailment and resulting fires.
The railroad said it is also partnering with Georgia Tech to develop new inspection technology. The Environmental Protection Agency said Monday that Norfolk Southern has also agreed to pay relocation expenses for residents of East Palestine and neighboring communities, including portions of Pennsylvania within a mile of the derailment, during a massive cleanup now underway.
Norfolk Southern CEO Alan Shaw said the NTSB report “makes it clear that meaningful safety improvements require a comprehensive industry effort that brings together railcar and tank car manufacturers, railcar owners and lessors, and the railroad companies.”
The Senate Committee on Environment and Public Works has a hearing scheduled this week on the East Palestine derailment and potential environmental and public health fallouts from toxic chemical releases.
The NTSB is investigating the March 4 Norfolk Southern derailment in Springfield, Ohio. State and federal officials said the 212-car train was not carrying toxic materials and the derailment of 28 cars did not pose a threat to the community.
Recession Remains Tough To Avoid
Many analysts and economists over the past year have predicted a U.S. recession happening sometime in 2023, but most are no closer to pinpointing the extent of a downturn or when it might arrive.
A new report from Oxford Economics said the research firm is pushing back its forecast for the recession’s timing from the second to the third quarter of this year. But the firm “is not altering our call for a mild recession to develop as the Fed continues to tighten policy” with interest rate hikes, analysts said in a March 3 report. Oxford researchers said the latest indicators suggest the economy is slowing but not yet in recession.
In a March 5 report, analysts at The Conference Board, a prominent economic research group, said its own studies point to a near 99% likelihood of a recession within the next 12 months. The Conference Board is standing by a previous forecast calling for a recession to arrive in early 2023 and last through the third quarter due to continued Fed rate hikes. “The first three quarters of 2023 are likely to see zero or negative real GDP growth rates,” its analysts said.
A late February research paper from authors including former Fed governor Frederic Mishkin said the Fed is unlikely to bring down inflation to its targeted 2% rate, from its latest 6.4% rate as of January, without raising rates further and causing a recession.
In a rebuttal to that paper, Fed governor Philip Jefferson released a reply report saying the current Fed has “more credibility as an inflation-fighter than some of its predecessors” and can manage a soft landing through its rate decisions without necessarily causing a recession.
SiriusXM Joins Firms Announcing Layoffs
Satellite radio giant SiriusXM joined a growing list of U.S. companies announcing layoffs, with plans to cut 475 jobs or 8% of its workforce.
In a memo to employees that was also filed Monday with the Securities and Exchange Commission, CEO Jennifer Witz said layoffs would affect nearly every department of the New York-based company, as media firms look to cut costs at a time of declining advertising demand.
“We streamlined our non-headcount costs by reducing content and marketing spend, decreasing our real estate footprint, and most recently, implementing tighter restrictions in our Travel and Entertainment policy,” Witz said. “However, today’s decision to reduce our workforce was required in order to maintain a sustainably profitable company.”
SiriusXM joins more than 100 companies that have announced job cuts since the start of the year amid slowdowns in consumer and advertiser demand. The cuts now total more than 120,000 jobs according to various news outlets, primarily in technology but also being seen in the media, financial service, automotive and other manufacturing industries.
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Lou Hirsh, CoStar News
- March 07, 2023
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