Charleston West Virginia USA - U.S. Senator Joe Manchin (D-W.Va.) is calling for a hearing "as soon as possible" in front of the U.S. Senate Committee on Commerce, Science, and Transportation focused on the possible merger of Canadian Pacific Railway (CP) and Norfolk Southern (NS).
 
After seeing a US$28 billion offer for NS rejected three times for being "grossly inadequate," in the words of Norfolk board members, the Canadian company is pursuing what Manchin called a "hostile takeover" during a press conference Tuesday in Charleston.
 
"West Virginia could be right in the bullseye of this one," Manchin said.
 
"There's no way we can think that there's going to be a positive outcome of this. No way. If you look at the past history and the past track record of the people involved, it's not going to be positive."
 
Manchin specifically named Bill Ackman, founder and CEO of Pershing Square Capital Management, a hedge fund management company, and Hunter Harrison, CEO of CP, as potential witnesses for the future, still unscheduled Capitol Hill hearing.
 
"I cannot believe they'll be making this hostile takeover to make investments in NS and in the United States of America," Manchin said of the questions he wants to ask about the intentions of those with CP, Canada's 2nd largest railroad.
 
He said he believes the ultimate goal is to dismantle NS, currently the 2nd largest rail company in the eastern U.S.
 
"Those profits will be taken back to their shareholders and to the hedge funds of New York and Canada which is not going to be building out anything or creating the infrastructure we need to be successful and competitive," Manchin claimed.
 
NS employs 990 West Virginians with a payroll of US$67 million and investments of US$85 million in tracks and facilities, according to company information.
 
Earlier this month, CP, in a complaint filed with the U.S. Department of Justice, alleged some of the company's competitors, including CSX and Union Pacific, were cooperating to try to derail CP's takeover of NS.
 
Critics have argued the merger would lead to price increases tied to limited competition.
 
The possible merger comes at a time when freight traffic is down in North America, evidenced in stock declines.
 
Coal shipments account for 96 percent of NS's outbound rail transports in West Virginia and that traffic has fallen during the past five years.
 
In response, NS donated 76 acres of land in Wayne County for the Heartland Intermodal Gateway at Prichard.
 
Opened in December, it's a rail-to-truck transfer facility designed to connect West Virginia to more than 100 global ports.
 
"For us to diversify our economy, and we know coal shipments are going down, coal's having a difficult challenge, this intermodal facility gives us another opportunity," Manchin said.
 
"And without that opportunity, I do not believe that CP is going to be committed to intermodal to help West Virginia."
 
The Surface Transportation Board (STB), within the U.S. Department of Transportation, has approval authority for railroad mergers.
 
Under 2001 rules, possible mergers must be in the public interest and lead to enhanced competition.
 
In addition to meeting those requirements, CP officials have said such a merger will help alleviate congestion in Chicago, a key rail hub.
 
Shauna Johnson.