Manufacturers Strive to Bounce Back after Derailment

EAST PALESTINE, Ohio – In the four months following the devastating Norfolk Southern train derailment here, manufacturers and businesses are still struggling through the challenges left in its wake.

At RBS Manufacturing, about a block from the derailment site, there has been a challenge in staffing, with a lack of confidence among employees, and a 35 to 40% drop in sales, said Rick Severs, vice president and general manager.

The plant was within the 1-mile derailment evacuation radius, the area of town blocked off until after the controlled release and burn of vinyl chloride, and had to close down for approximately four days after the derailment. But work has long since resumed at the steel manufacturing plant, which employs about 35 people in the village and 50 at the parent company, Medart in Ellwood City. Of those employees, Severs said the majority live within 15 minutes of the plant in East Palestine.

Severs said Medart had purchased RBS with the idea of expanding. But the derailment and subsequent possible drop in property values could put that on hold, according to Severs, as the company contemplates whether a $1 million investment makes sense.

“I appreciate the visit from [U.S.] Sen. Sherrod Brown here, coming down and supporting the community, supporting RBS and putting a positive light to the community and what has been going on here,” Severs said.

Brown met with RBS officials, as well as other business owners in the community and from the Columbiana County Port Authority, on Monday. Severs said he is happy Brown is helping to hold Norfolk Southern accountable, and the railroad has been helping businesses like RBS and E.R. Ceramics through the recovery.

“This community is coming back,” Brown said. “People believe in themselves here. This company is doing well. There are still challenges, there’s challenges of hiring people because they hear the news. … Norfolk Southern has been cooperative in many ways, but we’re also challenging them to live up to their obligations.”

Brown said it is important for Norfolk Southern to help people, not just those suffering with skin rashes now, but those who might suffer ill effects down the road. Brown and fellow U.S. Sen. J.D. Vance, R-Ohio, have been pushing the EPA, the Centers for Disease Control and Prevention and the National Institute of Health to continue monitoring the situation in East Palestine long-term. Additionally, Brown said they are pushing to make certain Norfolk helps those residents who attempt to sell their properties and find a $120,000 home now worth only half as much.

Brown said he is working to pass the Railway Safety Act of 2023, which he believes will receive enough votes to overcome a filibuster. Brown said all Democrats support the legislation, and that Vance believes some Republicans will support it. However, Brown said the railroads continue to fight provisions in the bill, including insisting that there should be only one person driving trains. He voiced concerns about the legislation’s future in the House.

“These trains, they have got to pay attention to the public and not just the bottom line,” Brown said, listing several derailments that have happened in just Ohio this year. He believes the legislation will help make trains safer and prevent more accidents.

Brown also talked about efforts he has made to visit East Palestine often, including to area farms and businesses. He points out most companies had to close down for a short while and are recovering, but he admits some companies and some businesses downtown that rely on foot traffic continue to struggle.

Among those who toured RBS were Penny Traina, CEO and executive director of the Columbiana County Port Authority; Haedan Panezott, a private sector specialist with the port authority; and Jeannette M. Wierzbicki, executive director of Ohio Mid-Eastern Governing Association. Panezott has been in East Palestine working with local businesses.

“Our role is a support position,” Panezott said. “We use that information to provide that to our economic development partners, as well as our legislators, to bring awareness to the businesses. I think it’s difficult to say there’s one issue that every business is experiencing. It’s a wide spectrum. Every business is going to have a different level of impact.”

Panezott said sales revenue, product loss and workforce are the three biggest things he is learning from the surveys he is taking from businesses in town. Traina points out that, overwhelmingly, workforce is a concern, but businesses across the country are struggling with workforce concerns.

“Basically, our mission is to help connect communities to resources, to help with community and economic development plans,” Wierzbicki said. “So we’re kind of taking the position – whatever the village needs we will try to help line them up with funding.”

As an example, Wierzbicki said the fire department could get help acquiring the equipment for a new firetruck it must purchase. OMEGA has connections through the Appalachian Regional Commission and the Governor’s Office of Appalachia, as well as a revolving loan fund for businesses with competitive fixed interest rates.

“With Haedon being here every week, he has a good pulse on what the businesses need and how we can best assist,” Wierzbicki said.

East Palestine businesses may soon see some help through the state. Gov. Mike DeWine, Lt. Gov. Jon Husted, state Sen. Michael Rulli of Salem, R-33rd, and state Rep. Monica Blasdell of Columbiana, R-79th, all announced a $5 million new emergency support program for East Palestine businesses Monday.

The program will provide 0% interest, forgivable loans between $10,000 and $1 million to help for-profit and nonprofit Ohio businesses within a 2-mile radius of East Palestine and operating as of Dec. 1, 2022.

“We are building on the commitment we made more than four months ago to support the families of East Palestine,” DeWine said. “This program is essential for long-term recovery, giving the businesses impacted by this tragedy more support to recover and thrive.”

The East Palestine Emergency Support Program was created through the Ohio General Assembly using funds from the Controlling Board Emergency Purposes/Contingencies Fund. The Ohio Controlling Board approved the availability of the funding Monday. The program will be administered by the Ohio Department of Development.

More information, including how to apply, is available HERE.

Panezott urges any business he has not been in contact with yet to reach out to him at 330 424 1800.

Pictured at top: U.S. Sen. Sherrod Brown, left, and Rick Severs, vice president and general manager of RBS Manufacturing.

Copyright 2024 The Business Journal, Youngstown, Ohio.