PHILADELPHIA — Conrail's maintenance yard is abuzz with high-finance talk about rollover accounts and blue-chip stocks as the freight company prepares to distribute more than 10.3 million shares of stock to its workers.
About 92,000 former and current employees will receive a piece of the Philadelphia-based company today in the final phase of the federal government's public sale of Conrail.
"Everyone stops and looks at the financial page," quipped Conrail signalman Bob Neithammer.
The railroad, set up 10 years ago from bankrupt Northeastern and Midwestern rail lines, was owned and subsidized by the government until March, when it sold more than 58.7 million shares to the public for $1.65 billion.
Current employees, retirees and many laid-off workers will get between 10 and 270 shares as a result of a deal in 1979 in return for wage concessions, then in return for special consideration in any stock offering. Most employees who worked for the firm after Jan. 1, 1980, are entitled to the shares.
The average Conrail worker will receive 220 shares, officials said. That would be worth $8,415, as of Wednesday's closing price of $38.25 a share on the New York Stock Exchange.
Workers who are more familiar with railroad equipment than stocks and bonds told the Philadelphia Daily News they are still trying to decide how to manage their new portfolios. They haven't decided whether to sell their stock and lose up to one-third in taxes or keep their funds in a tax-deferred Individual Retirement Account. Some are trying to decide how and when to diversify their holdings.
Neithammer said he plans to set up a retirement account with his 216 shares and buy certificates of deposit. He plans to watch the financial markets and wait about two months. "I think I'll see what happens," he said.
Joe DelGallo, a mechanic who will get 165 shares, has hired an investment representative and plans to be an active dabbler in the stock market, even if he keeps his funds in a retirement account. For starters, he plans to sell his stock and invest in Jaguar and Pepsi instead. "I play with it," he said.
Co-workers have heard his advice to diversify, but, he said with some chagrin, "they don't take it."
There has been no shortage of people giving advice. Foremen at the northeast Philadelphia shop said they've had to send brokers' representatives from the yard.
And a local brokerage house, Tucker Anthony, tried to attract business by holding investments seminars at its office one block from Conrail's center city headquarters for two weeks in August.
Merrill Lynch has signed up 10,000 Conrail employees interested in its offer to maintain their retirement accounts.