NS’ Squires: Looking back at contributions, ahead to ‘gradual’ retirement
4/28/2022
By Jeff Stagl, Managing Editor
During his nearly seven-year tenure as Norfolk Southern Corp.’s leader, James Squires has faced a lot, overcome a lot and accomplished a lot. Now, he’s ready to retire so he can travel a lot, volunteer a lot and relax a lot.
Squires, 60, has served as the Class I’s CEO since mid-2015 — taking the baton from the amiable Wick Moorman — and chairman since October 2015. Squires was president from June 2013 until early December 2021, when Executive Vice President and Chief Marketing Officer Alan Shaw was named his successor.
A 30-year NS veteran and member of the executive leadership team for about two decades — including stints as chief financial officer, EVP of finance and EVP of administration — Squires believes it’s time to move onto the next chapter in his life. Most CEO tenures last about seven to 10 years, so his leadership rein falls in that range.
During a Teams meeting interview with RailPrime on April 25 — five days before his last day at NS — Squires talked about his career, contributions and future plans.
In the near term, he looks forward to traveling with his wife Karen and two daughters Eleanor and Maggie, who are past their college years and in their late 20s.
“We had put that off, like everyone else had the past several years,” says Squires, referring to the pandemic.
In 2017, Squires made a field visit to a yard in Macon, Georgia, to talk with employees and observe operations. Norfolk Southern Corp. He also plans to continue serving on the boards of the Hampton Roads Community Foundation in southeastern Virginia and the Atlanta Committee for Progress as part of more philanthropic work with his wife. The couple has donated millions of dollars to various organizations over the years.
In Norfolk, Virginia — the longtime site of NS’ headquarters until the Class I moved to Atlanta late last year — they supported the Elizabeth River Project, ForKids Inc., Old Dominion University, ACCESS College Foundation and other organizations. The couple will remain heavily involved in nonprofit volunteer work, Squires says.
“That will be the No. 1 focus after I retire,” he says.
Yet, Squires won’t be stepping away from NS completely. He is on the ballot to continue serving as an NS board member for one more year, if he is elected May 12 at the company’s annual shareholders meeting. Shaw also is on the ballot.
“My retirement will be a gradual process,” says Squires. “You get all kinds of advice when you are about to retire. Some say don’t retire, and others say don’t do anything for a while after you retire. I need to find the middle ground — I’m somewhere in between.”
It’s difficult for him to cut ties with NS since he’s served the company since 1992, first as an intern in the legal department. Prior to that, the Hollis, New Jersey, native earned a bachelor’s degree in ancient Greek from Amherst College, spent a year as an Amherst-Doshisha Fellow at Doshisha University in Kyoto, Japan, served the U.S. Army from 1985 to 1989 as a Japanese language expert and received a juris doctor degree from the University of Chicago Law School.
Squires gradual climb to NS’ top post — which began to accelerate in 2005 — included stints as VP of law, senior VP of law, SVP of financial planning and SVP of finance. He was appointed CFO on July 1, 2007, then became CEO eight years later.
It didn’t take long for him to face two major challenges as the railroad’s new leader. In fall 2015, Canadian Pacific launched a hostile takeover of NS, and a year later, the annual revenue generated by coal business came up about $1 billion short of the projection.
Squires worked with NS’ brain trust to help convince the U.S. Justice Department's antitrust division to submit a letter to the Surface Transportation Board urging the agency to preserve its ability to review the impact of the forced merger with CP on rail competition and consumers. CP shortly afterward dropped its takeover bid.
“I’m proud we were able to fend off the hostile takeover,” says Squires.
As for the declining coal business, revenue in the sector fell to 15% of total revenue in 2016, down from 23% of total revenue in 2013. Squires worked with the executive team to find ways to make up the revenue shortfall, such as by building intermodal and merchandise traffic. The five-year average (2017 to 2021) of revenue contributed by intermodal then reached 26% while coal contributed only 14% compared with 22% and 20%, respectively, from 2012 to 2016.
“We grew other parts of the business,” says Squires. “We are a more consumer products-oriented railroad now. Intermodal was more of a side business when I started.”
The other major obstacles during Squires’ tenure included economic slowdowns, the need to fund and fulfill the positive train control mandate by 2020’s end and the COVID-19 outbreak that started in early 2020.
“No one saw the pandemic coming. We witnessed its effects on our company and the economy,” says Squires.
He believed it was important to ensure there were enough workers to move trains and that all employees obtained the federal money “they had coming,” he says.
“We were able to rebound in late 2021,” says Squires.
Although his leadership hasn’t quite spanned seven years, NS has faced a lot of adversity during the stretch.
“When I’d pass people in the hall, they’d say, ‘A lot sure has happened while you’ve been the CEO,” says Squires. “You couldn’t have predicted or prepared for it, and you have no control over it.”
James Squires (at left) and Alan Shaw often conducted town hall meetings with employees to discuss goals and initiatives. Shaw becomes NS’ new CEO on May 1. Norfolk Southern Corp.But he did have the railroad’s reins firmly enough in his hands to mark quite a few accomplishments during his tenure, such as doubling NS’ market cap and improving its operating ratio by 1,200 basis points. Squires also helped champion sustainability, diversity and technology; institute a precision scheduled railroading operating model; establish a new, modern 750,000-square-foot headquarters in Atlanta; and prompt a next-generation TOP|SPG operating plan focused on service, productivity and growth that will begin to roll out late in the second quarter.
“We didn’t achieve [all these] things just because of me, it was a group effort,” says Squires humbly.
The new HQ is in a more diverse and culturally rich city. The functional advantages there are working with more agility and more collaboratively across organizational boundaries, Squires says.
And ongoing efforts to adopt more technologies — driven by artificial intelligence, machine learning and predictive analytics — are transforming NS, he believes.
Technologies that automate the inspections of locomotives, rail cars and track structures are key. For example, the railroad is adopting a number of Machine Vision portals as part of a plan to develop 16 automated inspection corridors that will cover 90% of the network. The portals feature cameras and sensors designed to detect anomalies to help prevent derailments, reduce mainline delays, make inspections more consistent and foster component repair plans.
“We are investing in things that should pay off in a couple of years,” Squires says.
NS also is playing a role in advancing technologies that would help the entire rail industry, such as developing a new locomotive to “replace the diesel workhorse that’s been in place for so long,” he says.
Despite a number of things to be proud of, there’s something that Squires regrets: the poor service NS is providing to many shippers while he departs due to train-crew manpower shortages, supply-chain challenges and other factors. In the first quarter, the Class I’s systemwide train speed and terminal dwell time averaged 18.2 mph and 26.7 hours, respectively, compared with 20.5 mph and 24.4 hours in first-quarter 2021. Plus, crew starts declined 5%.
On Nov. 10, 2021, Squires cut a ribbon marking the official opening of NS’ new 750,00-square-foot, state-of-the-art headquarters in Atlanta. Norfolk Southern Corp. “We’re not serving customers as well as we should be today, as everyone else is experiencing in the industry,” Squires says.
To restore service performance, NS is banking on TOP|SPG and a quicker pace with sustainability objectives.
“We have hiring initiatives in place and are finding ways to improve service,” says Squires.
He needed to find his way over the years after becoming CEO. You learn a lot on the job, Squires says.
He also gained valuable knowledge while chairing the Association of American Railroads and Virginia's Transportation Accountability Commission, and serving on the U.S. Chamber of Commerce’s board.
Figuring out how to advance so many differing interests and balance the demands on your time is quite the challenge, Squires asserts.
“You have so many different people and groups that call upon you to serve. And as a chairman, you are a member of a board, and you lead 13 other people with different backgrounds and ideas,” he says.
What he’s learned along the way he has tried to pass onto Shaw, who assumes the CEO reins on May 1. The two have held many discussions over the past five months since NS announced the leadership succession plan.
Bolstering service performance has been a main talking point, especially since it’ll be Shaw’s primary objective as the new CEO. But there are other things Shaw can focus on.
“I told Alan to go out in the field so he can know everything we do,” says Squires. “One time in my career, I was told to go out and learn everything about communications and signals. I learned how a signal is built — that’s important.”