Version XIII - This Was The Week That Was

August 3, 2001

In the 13th week of chronicling the ups and downs of Amtrak in the summer of discontent, not much is going on outside of the ordinary.

Many Amtrak managers are vacationing with their families like all other Americans, and others are scratching their heads wondering what their future will hold.

1. As noted last week, Amtrak is offering a buyout/severance package to almost all 2,900 managers throughout the company. This week, details of the buyout came, and managers have to make a decision before the end of August.

   Many of the managers will feel like they’re playing Russian Roulette with their careers and family income. Here is the conundrum: The buyout terms are somewhat less than spectacular. For most, it’s a few weeks pay after separation, and that’s about it. No bundles of cash for incentives, nor anything like a golden parachute as speculated by a union activist. Instead, if you’re an Amtrak manager with less than five years service, you will leave the company in August and get paid until the end of September. If you’ve been there from five to 15 years, pay keeps rolling in until the end of October. For old-timers, those with service of over 15 years, you keep getting paid until the end of November.

   Now, these managers who are contemplating new careers have to make a guess: if they don’t take this somewhat less than generous buyout and decide to stay, will they be fired anyway when the company starts making decisions on its own about who stays and who goes?

   Do you take a stingy buyout and hope for another job, or do you stay and hope you’re not targeted for layoff?

   There’s going to be a lot of soul searching going on between now and the end of August.

2. If you’re a “mature” employee who is 55 years old or older, the severance package is much better. This employee category is where the majority of the voluntary separations will be coming from. In a nutshell, if you’re 55 or older and have enough seniority, Amtrak will take care of transitioning you to the pension system and the retiree health care system. Essentially, you will be out the door with full benefits as if you were at a normal retirement age. Again, this is no golden parachute because it does not come with any type of cash incentives. Instead, it’s a chance for those who have reached the point of breaking or have “had enough” of the Amtrak corporate culture to bail out without penalty. The same conundrum will also apply here, whether or not your job will be targeted for elimination if you don’t take the voluntary separation.
3. The biggest downside to such a program of voluntary separation is that Amtrak will lose a lot of institutional memory and wisdom associated with gray hair and long length of service. Hopefully this will not force Amtrak to go through yet another period of internal discovery that the same things that have not worked the previous three to four attempts will not work again.
4. As all of this contemplating is going on, so is the corporate restructuring of Amtrak. First looks and news reports seem to indicate that the 57% of Amtrak’s annual revenues that come from operations will now be under the direction of veteran exec Stan Bagley, and the 43% of the annual revenues that come from other sources will come under CEO George Warrington.

   Some surprises are due from the restructuring, particularly some high profile names that will be taking a more modest public profile. Former “can do not wrong” types that did wrong (and the company figures are proving so) may be keeping titles, but not the more important responsibilities. Look for some veteran execs that proved their worth decades ago go reemerge in strong positions.

5. Amtrak for decades had one of the loosest ticketing and hold policies in the travel industry. This has been changing in the past months, and now Amtrak may have the toughest policy of all.

   While any policy change may have a few bugs in the system to work out, Amtrak’s new policy of either pay for the ticket this moment or lose it by midnight may prove in the short run to be unworkable.

   While Amtrak claims this policy will help to better manage train inventory, one can’t help but suspect that the real reason is to pull money off of passenger’s credit cards quicker and get it into Amtrak’s slim-to-none bank account quicker.

6. In the Just For Fun Department, Amtrak has been working with a vendor that was revealed this week as part of the Amtrak web development team.

   Even though Amtrak may have something of a buttoned down reputation, it didn’t stop them from using the services of Washington firm Glowing Toad for programming and maintenance of Amtrak’s intranet and extranet it was reported on the All Aboard list this week.

   Glowing Toad has other distinguished clients, including the Federal Aviation Administration, the National Trust for Historic Preservation, and the District of Columbia Chapter of the American Marketing Association.

   It’s just tough to picture yourself as their receptionist, and every day beginning your day by answering the telephone, “Good morning, Glowing Toad, how may I help you?”

7. The Minnesota Rail Passenger News published its Summer 2001 edition this month, and included some interesting information.

   As many know, the only relevant financial measure of passenger rail success is revenue passenger miles. This is the basis that all passenger railroads and airlines use instead of individual transactions, because it presents the true picture of how many passenger miles were used instead of how many passengers were carried (such as is used by transit systems, which have a different form for accounting).

   Here are the numbers:

   	NEC	Intercity	West
   Revenue passenger miles (in millions):	1860	2978	660
   Load factor	43%	53%	40%
   Transactions (in millions)	12.9	5.5	4.1
   Average length of trip (by number of miles)	144	541.5	161

   By comparison, in the month of May, 2001, Northwest Airlines had 6.7 billion revenue passenger miles (more than Amtrak’s annual total, by about 22%), and a load factor of 76.7%, which stock analysts decried because it was down from 79.4%. Of that traffic, 3.68 billion revenue passenger miles were purely domestic U.S. (or about 55% of the total).

   The reader may draw his or her own conclusions.

8. Tucson, Arizona attorney Tony Haswell, the Father of NARP and one of the team which helped bring Amtrak into existence, has filed suit in federal court to force Amtrak to release financial data by train service route. Tony, a longtime member of the All Aboard list and moving force behind the Modern Trains Party, wants Amtrak to reveal the criteria upon which it will be making decisions about future train service.

   Tony’s suit comes under the Freedom of Information Act statutes. He has been successful in the past through similar suits forcing Amtrak to reveal relevant financial data.

As we close, unfortunately we saw another week, another Amtrak wreck go by. This time, the victims were the passengers and crew of the Texas Eagle, while traveling through Missouri in the middle of the night. Rain storms and washed out track caused the problem, which resulted in yet more critically short Amtrak equipment headed for Beech Grove and the wreck line. The situation has reached a point where just one or two more wrecks like this could force daily service to be reduced simply because of a lack of equipment. But, Amtrak keeps going. We’re just not sure what’s keeping it going at this point.

Bruce Richardson
Jacksonville, Florida

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