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STEVE INSKEEP, host:

This may not be a great time to be in real estate or high finance, but an old line industry seems to be doing all right during the economic downturn. Railroads have enjoyed a dramatic increase in business in recent years. And we'll talk about that today - the first of two conversations about old-style industry and an argument for its success.

The CEO of one of the largest railroads, Norfolk Southern, says his company remains healthy. High fuel prices actually help railroads. Trains are more efficient than trucks, so their expensive gallon of diesel fuel goes farther. And that is just one factor on the mind of Wick Moorman, who is the head of Norfolk Southern.

Mr. WICK MOORMAN (CEO, Norfolk Southern): You've got this side of our business which remains very good, starting with coal. That business is good, not only because of the utilities - which continue to burn coal - but because of cheap dollar and worldwide shortages of coal, our export coal business has gone up. And then you've got other businesses which I would say are lukewarm. And then anything that really has much to do with housing, or right now the automotive business, is soft for us.

INSKEEP: And in balance, are you having a good year?

Mr. MOORMAN: I think we're having a reasonably good year. For the past few years, we've been able to raise our prices in real terms. Up until about 2003 rail prices went steadily down. In fact, it looked like a ski slope. And the only reason we were able to survive in that era was to take out cost. We got much better at doing business.

INSKEEP: Has there been a period where you felt like you were an industry where the assumption was this is a relic, it's a dying industry?

Mr. MOORMAN: You know, I never felt that way, because the fundamental economics of moving goods using the steel wheel on the steel rail will always be the most efficient way to do it.

Beginning in the 2003 timeframe, we really saw a lot of things come together, which started to drive more and more volume to the rails. Things like higher energy prices. We get about 423 miles per gallon for a ton of freight. We have substantial efficiencies, and as fuel prices continue to climb, more and more people see an advantage to shipping by rail.

INSKEEP: How long have you been in the railroad business, Mr. Moorman?

Mr. MOORMAN: Since the Earth's crust was still warm.

(Soundbite of laughter)

INSKEEP: It must've been very hard to lay tracks at that time.

Mr. MOORMAN: It was. I actually started in 1970.

INSKEEP: Forgive me for noting, if you went into the railroads in the early 1970s that means you were diving into a business where all the big companies were going bankrupt or out of business.

Mr. MOORMAN: Well, I was fortunate in that I went to work for the Southern Railway, which was known as an extraordinarily well-managed company and a very innovative company.

INSKEEP: And is there something that makes the difference then between a lot of railroads that have failed over the years or been bought up over the years and the handful that remain that have seemed to be doing well in the last few years?

Mr. MOORMAN: One of the primary reasons that railroads didn't do well for so long was they really had a lot of oppressive regulation, and most of that was lifted. And slowly but surely the health of the industry revived. The ailing carriers were able to merge with other carriers. So what you see today is the culmination of a lot of things that have gone on over the past 25 to 30 years to really bring the industry back to health.

INSKEEP: Wick Moorman, CEO of Norfolk Southern.

Thanks very much.

Mr. MOORMAN: Thank you.

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