Version XXXI – This Was The Week That Was – An Amtrak Saga

December 07, 2001

There are a lot of scary things floating around regarding Amtrak as we know it. Let’s start at the top …

1. The “B” word is beginning to surface in more places than one. The word, of course, is bankruptcy for Amtrak, the National Railroad Passenger Corporation.

   It’s not a pretty picture.

   It’s been obvious that Amtrak has been burning through cash faster than it can be collected. About every stall/avoid/evade trick in the book has been used by the company to keep many creditors at bay.

   While some vendors along the NEC report that Amtrak is paying its bills on a timely basis for things like parts for rolling stock repair, other vendors in many other parts of the country are still reporting slow to very slow pay. Some vendors have unpaid invoices that are a year old.

   This past Tuesday, December 4th, a daily newspaper in Jackson, Michigan reported that Amtrak insiders are hinting to the company’s creditors that bankruptcy may be near. Amtrak is now $3 billion in debt.

   Another similar article was published on the Left Hand Coast in California this week, too.

   What will this do? It won’t stop trains from running. Railroads, including Amtrak, are protected from being forced into liquidation bankruptcy by federal law, so, it means the company would continue to operate, but most likely be put under the direction of a court appointed receiver.

   A receiver in such instances replace both senior management and the board of directors, and controls with near absolute power, pending a sympathetic judge. If Amtrak declares bankruptcy, it could quickly find itself with new leadership that could choose to do some VERY drastic things in the name of keeping the company viable.

   So, if you think the long distance trains are at risk because of the pending Congressional reauthorization, bankruptcy could be the last – and most lasting – present that current Amtrak senior management could give the country. And, it could be one of those insidious gifts that keeps on giving, and giving, and giving, as trains could be axed, stations closed, and union employees laid off.

2. We’re having a pop quiz: Quickly, name one presidential administration since May 1, 1971 that’s been friendly to Amtrak specifically, and passenger rail in general?

   OK, time’s up.

   Which administration did you name?

   The Nixon administration? You receive partial credit for this answer because it created Amtrak as a vain attempt to save at least part of the national passenger rail network.

   The Ford administration? Not around long enough to make any real difference.

   The Carter administration? Remembering the bloodbath of the 1979 national system cuts, you lose points any points you may have if you named this administration.

   The Reagan years? David Stockman’s handling of the “Amtrak problem” and the president’s famous speech about it being easier to pay travelers NOT to travel on Amtrak disqualifies the Gipper. Notice he’s had an airport named for him, not a passenger train terminal.

   The original Bush administration? No changes, really, except it didn’t do any harm and pretty well left the railroad running chores to an elderly Graham Claytor.

   The Clinton administration? If you want to count the hiring of Tom Downs as President and CEO because he was out of a job at New Jersey Transit, you lose points for this one, too. The man who brought the Mercer gutting of the national system and the end of the Pioneer, Desert Wind, and Gulf Coast Limited gets more of a raspberry than a kudo.

   The Bush II administration? So, far, no. While the president did very well in his appointment of Norman Mineta as Secretary of Transportation, so far, the Bush administration seems more interested in Left Hand Coast and Right Hand Coast corridors, with some service in and out of Chicago than anything else.

   Where does this leave us?

   Those nice people of both parties in Congress.

   Congress, for all of the bashing it receives from rail advocates who constantly whine about those mean people who give too much money to highways and airports and not enough money to passenger trains, is the perpetual hero of Amtrak.

   Congress has done more to keep Amtrak alive and functioning in some fashion or another than all of the presidential administrations put together.

   Congress may have not done enough, but it has made sure that Amtrak has lived to fight another day, and resisted everything for zero budgeting to just plain silly ideas from various DOT bureaucrats and budget writers.

   The signals from the Bush administration include that they are looking at Amtrak from a completely fresh perspective, and nothing is off of the table for discussion. The hints are something that will mostly consist of corridors as mentioned above, but nothing is firm, yet.

   Again, it will be Congress that makes the ultimate decision.

   The ARC is busily writing its plan that will be submitted to Congress. Once that task is completed, then the personal prestige of the ARC chairman and other ARC members will come into play as they work with Congress to determine what the New Amtrak will be in the future. But, the final decision will rest with Congress.

   All in all, the process is a fascinating one. This is the best debate yet that has gone on about Amtrak and passenger rail. This is a true, hard look at everything.

   What we all hope is that when all of the dust settles and Congress makes a final decision, it will be one that includes a viable mixture of long distance trains and useful corridors, joined together to form a true network.

   Some like to cite Southwest Airlines as a good business model for Amtrak. The Southwest map is pointed to with pride, and its system of operation is held up as an example.

   That’s OK. But, what is often missed when Southwest’s route system is touted as a good example, is that Southwest uses a true NETWORK of routes that feed each other, and are interdependent on each other for equipment turns, traffic, crew utilization, and a number of other factors. No single Southwest route stands alone. Each route is part of the Southwest network.

   A successful New Amtrak will never be a collection of corridors or end points tied together with a few linear routes. A successful New Amtrak will be a network of routes and corridors that feed each other, make best use of hard assets like rolling stock and maintenance shops and stations, with all having a common core for reservations, headquarters, identity, and marketing.

3. Speaking of Southwest and history at the same time, there is one other factor which must be considered when creating the New Amtrak.

   Let’s allow passenger rail service to be what it really is: train service.

   Let’s stop trying to turn passenger rail train service into faux airline service, faux cruise ship service, or even something as simple as bus service.

   Trains are unique. Recognize and celebrate that. Trains can do things that other modes of transportation can’t. That’s good.

   Trains also can’t do things that other modes of transportation can do, and that’s OK, too.

   So, Amtrak has been subjected to every type of experiment known to modern train riders, from the early near-airline experiments of the 1970s to the leisure ground cruise of the 1990s. Don’t forget about the abysmal dining car experiment complete with precooked food, plastic utensils, and paper plates.

   Let’s cut the experimentation. Let trains be trains, with real dining cars, sleeping cars, first class coaches, ordinary coaches, baggage cars, and locomotive whistles that blow at grade crossings.

   One of the biggest reasons people like to ride the trains is because it’s a train. Not a bus, not a plane, not a ship, but a train.

   Trying to make passenger trains into something they aren’t is like trying to teach a Yellow Dog Democrat to vote as a Silk Stocking Republican. You can keep trying, but you keep banging you head against the wall in the process. Besides, it feels to good when you stop.

4. We all heard from the unions in November with a press release asking for the immediate removal of the current Amtrak senior management after the ARC finding.

   In all of the debate which is swirling around both in and outside of Washington, not many people are asking about the union position in all of this.

   Maybe someone should.

   The unions are one of the biggest stakeholders in Amtrak, and will be in the New Amtrak, too.

   Up until now, they traditionally supported the status quo. They didn’t want to rock the boat, just leave things “as is.”

   That’s not an option anymore. Every plan put forth, from the union job growth plan like the Selden Plan, to any union job cutting plan which would opt for corridors only, the unions must be involved in the process of creating the New Amtrak.

   State associations of rail passengers and other interested groups need to be coordinating positions and strategies with unions. The unions have much more to lose than anyone else in this process.

   For rail advocates, trains could be lost. For vendors, Amtrak could be lost as a customer. For union members, the way of supporting themselves and their families could be lost if the New Amtrak is not properly created.

   Today is a good day to start considering the importance of unions in this process. In the end, unions will make a difference. Their existence depends on it.

That wraps up another week during the December holiday season. With all of the debate going on, restructuring plans being written, and deals about to me made, this is NOT going to be a quiet holiday season.