Version XXI - This Was The Week That Was
October 1, 2001
We’re into Week 21 of This Was The Week That Was, and Fall is in the air here in Northeast Florida. We know that it must be Fall because we haven’t had daily temperatures in the 90s for over 10 days now.
There has been lots of mischief going to at Amtrak in the past three weeks. While we have been focusing on the tragedy in New York and at the Pentagon, Amtrak senior management has been trying to get its hands in the United States Treasury cookie jar.
- As this is being written on Monday, October 1st instead of Friday, September 28th as is your humble correspondent’s usual custom (Your humble correspondent was slain by an itinerant flu bug which spared no quarter; the computer screen began to swim around late Friday and it was best thought to find friendlier environs.), today is annually the most important day in Amtrak’s ongoing corporate life: Today is the day the Treasury hands over the annual appropriation of free money the Congress gives Amtrak. Today’s take: in excess of $500 million, all in one gulp this year, plus the remainder of last year’s appropriation, another couple of hundred million or so.
This means that Amtrak has its corporate hands on a huge chunk of cash, over half a billion dollars, all at one time.
The most pressing question for hundreds (perhaps thousands) of vendors: Does this mean I’m going to get paid now?
Amtrak has been running the railroad on the backs of vendors, many of them officially classified as small businesses, for months now. Some unpaid invoices are so old, vendors are holding birthday parties for them.
The cause of this financial debacle? You have three guesses, and the first two don’t count. Perhaps the overpayment of hundreds of millions of dollars in excess infrastructure costs for Acela between New York and Boston? (Remember the FBI investigation? Since no one has heard it has been concluded, one must only assume it is still ongoing, and the feds are known to take their time and make a strong case.)
Maybe now that money is flowing again, headrests will return to coach seats? Certainly no one wants to talk about those nasty cases of head lice that untreated and uncovered headrests can cause …
- The Honorable Norman Mineta, the United States Secretary of Transportation, in a speech given today in Philadelphia before APTA, openly questioned Amtrak’s plans to screen passengers boarding trains the same way airline passengers are screened.
We knew we liked this man when he was appointed, but we didn’t realize how very much we like him.
Secretary Mineta on several occasions has questioned the often ill-fated plans of Amtrak senior management when he has seen something amiss, and he’s continuing to do that. This may be a strong signal that the Bush Administration is not going to support all of the $3.2 billion “me, too” emergency money Amtrak asked for after the September 11th tragedy.
Even more telling that this money grab was a knee-jerk reaction is the return of passenger loads to closer to normal levels. And, since it appears that Reagan Washington National Airport is going to reopen after all, this request becomes even less of an emergency since the air shuttle will fly again after a fashion.
But, you ask, what about the massive increase in business that Amtrak claims is happening every day on the NEC? Good question. In some instances Amtrak has doubled it’s NEC business, which is good. Those trains were running nearly empty before, so doubling nearly empty brings them up to half loads or at least closer to full loads. Still not enough demand to justify the billions Amtrak wants because it sees an opportunity to raid the Treasury when no one is looking.
Unquestionably, the infrastructure on the NEC that needs to be fixed and upgraded is a serious problem, which will have to be realistically addressed in the very near future. But, it should be honestly addressed for what it is, not cloaked in the aura of a national emergency. That not only demeans Amtrak’s mission, it demeans every honest supporter that passenger rail has in this country. Don’t lie. Just make an honest request and let the chips fall where they may.
- Last week, House Transportation and Infrastructure Committee Chairman Don Young of Alaska, along with Jack Quinn of New York, the Chairman of the House Subcommittee on Railroads jointly introduced H.R. 2950, The Rail Infrastructure Development and Expansion Act for the 21st Century, or RIDE 21 as they dubbed the bill.
This brilliantly composed bill, which has been commented on previously by your humble correspondent, is being quickly embraced by many in Washington except Amtrak Senior Management and those who sold their souls for a 10% discount when riding in Amtrak coaches.
Their complaint? Amtrak has to actually work for some of the money in this $71 billion bill that will help freight railroads, commuter railroads, and promote realistic high speed rail throughout the country.
Amtrak will not receive its usual free ride in this bill, but is allowed to bid to become an operator of some of the high speed systems that will be spawned by this bill.
Unwitting naysayers of this bill throw themselves on the floor, stamp their feet, and otherwise display unreasonable emotions about this bill because it rightly so does not address the needs of Amtrak specifically.
That is one of the brilliant parts of this bill.
As said before, it allows Amtrak to stand on its own and be the subject of individual debate, and live and die on its own merits, not on some backdoor bailout as was structured by the HSRIA bill originally introduced by Senator Biden and Representative Oberstar.
The HSRIA, which has been pronounced dead by knowledgeable Washington insiders due to the overwhelming better features of the RIDE 21 bill, was a good start to get debate going. But, something better has come along.
Amtrak senior management and its henchmen need to get over it and get on the RIDE 21 bandwagon. To oppose RIDE 21 is to demonstrate narrow mindedness and an unwillingness to allow a true debate about Amtrak to occur.
- Things have calmed down since the Version XX of TWTWTW concerning Amtrak’s ill-fated voluntary retirement plan.
On Friday, Amtrak, in its employee advisory, said approximately 350 employees were eligible to take the retirement buyout. It’s unlikely, though, that many will take it since Amtrak backed down on its word and changed the rules at the last minute.
In response to last week’s missive about this, one wag, who is a member of the Give Amtrak A Break, and Another Break, and Another Break, and Another Break Society opined that this was not a great corporate tragedy, and mainly just too bad for the victims of this scheme gone bad.
Let’s examine who these people are that were hurt the most. Many were low level managers, some making less than $40,000 a year. Some of the managers on this level make less money annually than the unionized employees they supervise every day. Any of the managers eligible for retirement are ones who have served Amtrak for years and years, often working endless overtime for no compensation. These are not the upper level decision makers; they are the people who carry out the orders of those from above. These are everyday working people with a manager’s title.
Now, since Amtrak belatedly figured out that it couldn’t live up to the conditions that if offered for retirement packages, these people will continue to work out of necessity for basic things like groceries and light bills. This is a shameful chapter in Amtrak’s history that is spawning yet another round of employee lawsuits.
It continually seems that the only people that prosper under this Amtrak senior management are the attorneys.
- Amtrak continues to reorganize itself. On Friday, the company announced the next phase of restructuring, which creates four executive vice presidencies and various principalities under each exec. This is the highest number of executive vice presidents that one can remember in recent times, at least back to the beginning of the Claytor era.
Here is an undisputable fact: Every day that passes, brings the day closer when the current reign of Amtrak senior management will come to and end. It’s inevitable. That time period may be a week, month, year, or decade, but it’s coming closer. The question will be, when it finally happens, what will be left?
Every piece of rolling stock has been hocked. Penn Station in New York City was mortgaged to make 90 days worth of payroll this summer, and will take $600 million over 17 years to pay back a loan of $300 million. Assets are flying out the window because of ill-conceived business plans that plainly are not working.
It’s the beginning of a new budget year today, and we don’t have any brighter prospects than last year. Acela, the savior of the company, is not performing as needed. Intercity does not have enough rolling stock to meet daily needs for consists. Employees have just been told that 500 management positions will be “redefined,” which most likely means managers will have to reapply for their own jobs and go through yet another financially wasteful process.
This brings us to the critical question: Where will it all end? Will there be such a scorched Earth for the next group of Amtrak senior management that nothing will be able to the salvaged? Will Amtrak come to an abrupt end when the money runs out again this year?
Who will solve this problem? Will the Bush Administration be proactive and stave off this scorched Earth by changing management now? Will the Amtrak Board of Directors understand the mistakes it has made by allowing the flawed business plans to go forward and move to save itself by installing new management? Will the Amtrak Reform Council act under the legal mandate it has from Congress and pull the plug and force change? Will some heroic Congressman or Senator take a stand and block any more money going to Amtrak until changes are made? Who will be the hero the American passenger train?
Lots of questions to be answered. The events of September 11th have caused a lot of serious thinking and discussion in our country these past three weeks. The greatness of our nation always rallies in times of trouble, and many problems are solved by that greatness. It’s time for the American rail passenger to be the benefit of change.
Bruce Richardson
Jacksonville, Florida