Version II – This Was The Week That Was

May 18, 2001

Amtrak has now had two weeks in a row that would best be forgotten.

Last week, Amtrak lost its Chairman of the Board, several decisions were either made or considered that had dire consequences for passengers, and, at the end, we all wondered, “could it get any worse?” Well, we’ve got to stop using that phrase. It’s getting worse.

– Open civil war is breaking out within the company. Unions are openly challenging management, and have organized concerted campaigns to fight members of Amtrak management they believe do not act in the best interest of the company or union members. This is extending all the way down to the product line level.

Many managers are fighting each other. Beyond everyday squabbling, this is becoming tactical warfare that could end careers and/or create legal investigations. If you’re a manager, many are thinking, “who can you trust?” The answer: no one. Fox holes are becoming very fashionable.

– Morale in the company among countless employees continues to change from rock-bottom lows to outright anger. Jobs that were once thought secure for a lifetime career are suddenly in danger.

– The employees of the Southwest Chief are openly saying, and signing their names and displaying their pictures, that their train is in danger. They have created a web site to urge support for their train and the company. This train, because of its heavy load of mail and express, has often thought to have been immune to any adverse conditions. Now, employees are wondering if it will survive as they know it today.

– The untoward proposal to limit dining car seating to sleeping car passengers died a well-deserved death this week. Two versions of the reason why the proposal died are available, depending on whether you’re inside or outside of the company. The inside version is that senior management finally looked at the numbers and realized 60% of the dining car business came from coach passengers, who pay cash. The outside version is that senior management and the board received enough telephone calls and pressure from outside the company but inside the industry that they realized it was a bad proposal that had to go away.

– More and more often it’s being heard in a variety of places that the Amtrak board of directors is being isolated in a surrealistic world of record revenues and passenger counts, and really doesn’t know what is going on within the company. These reports are coming from many different, unrelated sources, lending credence to the concept.

– The new policy of one coach attendant for every four coaches became reality this week. Last week, the plan was reported. This week, it happened. So, if you have a train with four coaches, one coach attendant, one assistant conductor who is in the baggage car working as baggage master, and one conductor who is standing at the station door taking tickets, who is helping all of the passengers on and off the train at all of the doors?

– The Honorable John McCain, everyone’s favorite senator to try and guess what he’s going to do next, is holding hearings next week on Amtrak. Labeled, “Oversight Hearing on Amtrak,” the announcement further says, “Full Committee hearing scheduled for Tuesday, May 22, at 9:30 a.m. in room 253 of the Russell Senate Office Building. Senator McCain will preside. Members will hear testimony on a wide range of issues concerning Amtrak including Amtrak Reform Council’s Second Annual Report issued March 2001; Amtrak’s progress toward meeting the statutory requirement to be free of operating subsidies by December 2002; and the findings of the General Accounting Office on pending legislation to authorize Amtrak to issue bonds to generate up to $12 billion dollars for high speed rail infrastructure investment. Witnesses will be announced at a later time.

– The Sunset Limited continues to be an endangered train. Despite the fact that the train was ballyhooed by Amtrak senior management last year in the now-dead network growth strategy, the Sunset is being considered for discontinuance. This has been confirmed by two manager in Intercity as a topic open for active corporate discussion.

– Other reports are continuing to surface that Mercer II is coming, with many high visibility long distance trains headed for tri-weekly or quad-weekly service. The reports are so numerous and coming from so many knowledgeable sources (beyond the reasonable possibility of circular rumors), that, coupled with anecdotal evidence, the possibility of once again of passengers being the victim of a lack of institutional memory is real. Keep in mind that Amtrak’s financial system rewards managers for cutting expenses and outflow of cash; it does not reward managers for increased revenues.

– Reports of an almost total lack of cash are also continually being confirmed from within the company on all levels. And now, some professionals outside the company which watch Amtrak closely for a living, are now predicting the company will completely run out of cash prior to the end of the fiscal year. It’s doubtful employees will be willing to work for service guarantee vouchers to be redeemed at a later date in lieu of paychecks.

– To try a replenish the cash coffers quickly, Amtrak has launched a nationwide 30% discount plan to try and lure riders onto the trains during the normal peak summer months. This promotion is good for most trains all summer long. When a national transportation company starts lopping off a third of its ticket revenue during peak months, then that is a direct sign cash is short and passengers are scarce.

– A review by travel agents of sleeping car space availability during the middle of June on signature Western long distance trains shows passengers may have their pick of accommodations. Even the highly desirable deluxe bedrooms, which normally sell out first, are still available for last minute sale. This indicates that not only did Amtrak not receive it’s Spring boost of summer reservations and ticket sales, but onboard employees will also have lower tips and personal income due to low ridership.

The reality of all that is going on is that Amtrak, as a corporation, is in the most serious trouble it has been in during its existence. Never has cash been so tenuous. Never has there been so few summer travel riders.

If something doesn’t change fast, the Amtrak adorers will be changing from talking about “what will we do about Amtrak” to “Remember when we used to have a passenger rail system where you could cross the country on train?”

Dare we even think, “what’s next?”

Bruce Richardson
Jacksonville, Florida