(Corrects date in fourth paragraph and time period in fifth
By Karl Plume, P.J. Huffstutter and Ernest Scheyder
July 21 A blinding flash of orange light jarred
Weyauwega residents awake before dawn on March 4, 1996. An
81-car freight train had been barreling toward the farm town in
central Wisconsin when it jumped a broken rail. The train's
propane and petroleum cargo had caught fire and exploded.
Gerald Poltrock II, a rookie local police officer, thought
it was a prank when the dispatcher called to say the city "blew
It was no joke. When he arrived at the Mill Street railroad
crossing, Poltrock recalled, the scene was "mass chaos."
Thirty-five rail cars were piled up like toys and firefighters
were battling a roaring blaze. No one was seriously injured or
killed but the inferno burned for 16 days and the entire town
had to be evacuated.
Seventeen years later, another North American railway
disaster has brought back memories of Weyauwega. On July 6, a
runaway freight train with 72 cars of crude oil derailed in
Lac-Megantic, Quebec. A fireball leveled the center of the
picturesque lakeside town and killed about 50 people.
More than two weeks later, emergency crew are still digging
through the charred rubble to find bodies, police are
investigating to see if there was criminal negligence, and
Canadian regulators are probing the railroad's safety practices.
In both disasters, the railroads involved were headed by
Edward A. Burkhardt, a veteran industry entrepreneur credited
with helping to lead a renaissance in U.S. regional and local
freight railroads in the 1980s and 1990s.
There are clear differences between the two cases; for
instance, the Wisconsin Central Ltd train that jumped the track
in Weyauwega was operated by a two-man crew, while the Montreal,
Maine & Atlantic Railway Corp (MMA) train that derailed in
Lac-Megantic had a sole engineer who was not on board.
Still, a review of the U.S. federal investigation into the
Weyauwega derailment offers clues on the kinds of questions that
MMA is likely to face from transportation safety
regulators, according to rail industry executives,
transportation investigators and experts.
Burkhardt, who is about to turn 75, stands by MMA's safety
record and noted the company had no serious derailments before
Lac-Megantic. "I have never been involved with anything remotely
approaching this in my whole life," he said.
With a career spanning more than five decades, Burkhardt
specializes in piecing together small, aging or financially
troubled rail lines. He cuts costs by trimming staff, pays for
infrastructure repairs, and creates mid-size railroads that can
run on thinner margins than larger competitors, according to
union officials, regulators, former employees and business
Like other regional railroad operators, Burkhardt has to
strike a balance between ramping up traffic on rail lines to
boost profits - and keeping up with maintenance and other costs
to safely handle increased traffic volumes.
Henry Posner III was a partner of Burkhardt's in a railroad
venture in Estonia in 2001 through 2007. He said Burkhardt kept
a close eye on rail safety, and often began board meetings each
month with discussions about how to improve safety measures.
Posner said they significantly reduced the number of
personal injuries caused by the railroad over five years,
adding, "It was the number one priority of Ed's and the
Critics contend that not all of Burkhardt's rail lines were
always well maintained, pointing to the Weyauwega crash as an
example. U.S. National Transportation Safety Board investigators
said the cause of that derailment was a broken switch-point rail
that they said was not properly maintained by Wisconsin Central.
According to an NTSB report filed in August 1997, the broken
rail should have been caught by Wisconsin Central's track
inspectors during federally mandated monthly inspections.
"The switch point rail broke due to an undetected bolt hole
crack that progressed from improper maintenance because
Wisconsin Central management did not ensure that the two
employees responsible for inspecting the track structure were
properly trained," the NTSB report said. It did not specify any
individuals by name.
Former Wisconsin Railroad Commissioner Rodney Kreunen, who
investigated the accident, said the company had been using
decades-old tracks that were designed for lighter-weight trains.
Wisconsin Central had improved some weak spots on the line, but
had not modernized the whole system, he said.
"They knew they were going to have to rebuild the railroad
at some time," Kreunen said. "They really ramped up that
business and started putting so much traffic over it that it
went beyond (the rail's) capacity," he added.
Burkhardt disagreed with that assessment.
Wisconsin Central "was completely rebuilt under my
management," said Burkhardt, who was the company's chairman,
chief executive and president at the time of the accident.
"There were several years where capital budget, as a
percentage of its revenues, was the highest of any North
American railroad," he said, without giving figures.
In February 1997, following the accident, Wisconsin Central
agreed to federal safety inspection directives to roll out
widespread improvements to its tracks, railroad cars and
locomotives. For example, it agreed to spend at least 30 percent
more on track improvements.
The company also underwrote repair costs to the town,
voluntarily paid Weyauwega residents $50 for each day they were
dislocated, and donated hundreds of thousands of dollars to
non-profit groups in the area. More than 20 families and several
businesses sued the company, which settled for an undisclosed
Wisconsin Central estimated the total cost of the derailment
at around $28 million, according to regulatory filings.
The derailment had other repercussions on the company's
operations. For example, it drew Wisconsin state lawmakers' and
federal regulators' attention to the railroad's deployment of
one-person crews on some of its lines, even though the Weyauwega
train was operated by two people.
Later in 1997, the company suffered another derailment.
This time, the two-person operated train crashed through a
factory wall in Fond du Lac, Wisconsin, and killed a worker.
The death increased pressure on Wisconsin Central from
lawmakers and regulators to improve its safety practices,
including its use of one-person crews on other rail
lines. In February 1998, Wisconsin Central agreed to limit the
use of one-person and remote control trains on its 3,000 mile
Burkhardt had been among the first U.S. railroad operators
to advocate for one-person crews - a practice that has now come
under new scrutiny as the Lac-Megantic runaway train was staffed
by one engineer.
Kevin Moore, chairman of a local chapter of the Brotherhood
of Locomotive Engineers and Trainmen union, representing MMA
workers in Maine, said Burkhardt had shared his opinion of
single-person crews with him several times, including during
"He thinks when you have two people in the cabin, the
second person could be a distraction," said Moore. "I've never
seen that. The second person has always been a benefit, not a
Burkhardt said one-person train operations are safe,
efficient and "the norm in much of the world," citing New
Zealand, Australia, Britain and Poland as examples.
"I am interested in improving staff productivity, but not by
compromising safety," he said in an email to Reuters.
In Canada, only two railroad companies are authorized to run
one-person train crews: MMA and the Quebec North Shore and
Labrador Railway. The vast majority of U.S. rail companies do
not use one-person crews, the Federal Railroad Administration
said, calling the practice "very rare."
In almost every case, the agency said, "an engineer
operates and a conductor manages a train, calling out signals
and keeping inventory of its cargo." The agency, however, said
it does not have specific rules about crew size.
There is no public data that compares the safety record of
one-person trains with those operated by more people. The FRA
does not differentiate between size of train crews in its
accident or incident data reporting.
MMA accounted for 11 out of 7,565 accidents reported by U.S.
railroads from 2009 through 2012, according to the Federal
Railroad Administration. The company reported more accidents
than 93 percent of the 288 small rail lines (with fewer than
400,000 employee hours per year) that had accidents in that
Experts cautioned not to read too much into the data, as it
does not reflect the severity of the accidents. Before
Lac-Megantic, MMA reported only one fatality between 2003 and
2012, a period when there were 8,029 total railway-related
The railroad was formed in January 2003 after Burkhardt's
Rail World Inc acquired the assets of the bankrupt Bangor &
Aroostook Railroad to build the base of a regional line to
deliver paper goods, construction materials and energy products.
(Rail World is an investment and management company that
Burkhardt formed after leaving Wisconsin Central in 1999.)
Within hours of purchasing the railroad, one of its largest
paper customers, accounting for 25 percent of the business,
filed for bankruptcy, according to company documents. Weeks
later, the new MMA management cut salaries by 25 percent,
reduced payroll from 350 to about 275, and shelved plans to
spend $20 million on infrastructure improvements.
"We must be thrifty and use our resources well," Robert C.
Grindrod, then president of MMA, wrote in a January 2003 letter
to employees. "Mr. Burkhardt and I both want you to know that
the salary reductions and other steps outlined above will be
removed as soon as traffic levels return to more normal levels."
The company, however, has continued to shrink. It was hit
hard by the last recession and the collapse of the U.S. housing
market. MMA employs about 170 people today.
Burkhardt visited Lac-Megantic a few days after the
disaster, as he did Weyauwega following the derailment there.
"These are terrible things to occur, events I take very
seriously and personally," Burkhardt said. "I have worked
diligently to improve safety performance, and when one fails it
is a personal failure."
(Reporting by Karl Plume in Weyauwega, Wisconsin, P.J.
Huffstutter in Chicago and Ernest Scheyder in New York;
Additional reporting by Nick Carey in Madison, Wisconsin;
Editing by Tiffany Wu and David Greising; Desking by Martin