Volume II Version 9 – This Was The Week That Was – An Amtrak Saga

February 01, 2002

Today was an absolutely stunning day in the life of Amtrak, the United States Congress and the Bush administration. Who would have thought that the next group, after Osama bin Laden’s terrorist network, to threaten the President and the United States Congress would be Amtrak?

Amtrak’s stunningly arrogant press release and blackmail demand for funding or face a total shutdown of the national long distance system took the breath away of most who heard the pronouncement.

All of the other details of the announcement were left in the dust on the floor compared to the set date of March 29, 2002 for when Amtrak would file formal notification of train offs of every single long distance train in America to be discontinue on October 1, 2002 if Congress doesn’t meet the ransom demand of $1.2 billion to keep the system operating.

Naturally, no mention was made of any type of cutbacks or budget savings in the Northeast Corridor. In fact, the NEC and a few routes in California, plus a couple of state supported trains, are all that will survive October 1st if Congress doesn’t play ball.

The implications of all of this are so dizzying, it’s hard to sort out the details.

One thing is certain: many, many people felt sad that the rumors of Amtrak President and CEO George Warrington’s impending resignation turned out to be false. That was perhaps the biggest disappointment of the day for many, who had hoped he and his cabal of New Jersey Transit cast off cronies would go away. Apparently, that will have to wait for another day, but, after today’s blackmail announcement, that day may come sooner rather than later.

1. The You Heard It Here First Department: This Was The Week That Was, Midweek Update, Version 27A, November 14, 2001, “1) It’s a sure bet that present and soon-to-be former Amtrak senior management is going to make a last ditch public relations stand to try and save their jobs. This bunch won’t give up easily. …. you can probably expect an assault directly on the ARC, its legitimacy, its mandate, and its findings. …

   There is a possibility of economic terrorism from Amtrak senior management. They may try to hold individual routes hostage, saying they will file discontinuance notices on routes they deem unprofitable. At the least, they may start slashing frequencies to less than daily status as a result, probably claiming that the company can’t exist another 10 days by maintaining daily service for the national system. …. already started lobbying individual congressmen and senators … to try and overturn the ARC finding and have Congress ignore it. …. The saddest part is that we, the traveling public, are paying the price for this. Hubris can be very, very expensive for those paying the tab.”

   Sometimes it’s not desirable to be right. This is one of those times. Today never should have happened.

2. So far, there has been no word from Secretary Norman Mineta, the DOT, or the White House on today’s Amtrak announcement. We also do not know if the board of directors voted on this proposal, or it is just more of what came from Amtrak senior management shooting in the dark without board approval.

   The White House has the authority to clear out this board, all of which were appointed during the Clinton administration. Word had come out earlier this week that the entire board (absent Secretary Mineta, who is part of the board by virtue of his position) would be replaced after March 5th. After today, the Ides of March can’t come quickly enough.

   It is difficult to believe this bizarre plan by Amtrak was approved by a board of directors of rational people, especially a board containing the secretary of transportation. No group in its right mind overtly threatens the United States Congress into providing money.

   One source who deals with Amtrak on a regular basis, however, noted today that this is not unusual for Amtrak. The source said, “The Clinton-Warrington playbook remains in tact: (1) ignore the law; (2) character assassinate anyone who call you on it; and (3) take responsibility for nothing, and instead blame someone else, in this case the statute, the ARC, and Congress.”

   And, then there is Congress. It took less than four hours today after the morning Amtrak press conference for the chairman of the House Transportation and Infrastructure Committee, Representative Don Young to react. The gentleman from Alaska was not pleased. “I’m concerned that Amtrak is trying to shift the blame for its own nonfeasance to ‘policy makers’ by blaming ‘conflicting mandates,’” said Chairman Young. The chairman had a lot more to say, and will say even more when hearings begin on Capitol Hill on February 14th. You can bet the hearings will be “colorful,” to say the least.

3. Today’s announcement also said, that as cost savings moves, about 1,000 people working at Amtrak will lose their jobs. About 300 managers are expected to leave, and 700 union members will go, too.

   Just last week, Amtrak was bragging in a news story about its new head of the NEC that came from New Jersey Transit (there is that name, again). The story said he will head up an employee roster of 3,500 employees in Philadelphia, and another 7,500 employees spread between Maine and southeastern Virginia.

   That adds up to 11,000 employees. On that stretch of NEC track, Amtrak operates 147 departures a day, including long distance trains that go to other parts of the country, plus Keystone and Empire service trains. Do some math. It takes Amtrak an average of 75 employees to handle each departure. this includes maintenance of way, secretaries, ticket clerks, onboard personnel, etc. Everybody that sweeps the floors is included.

   Does this strike you as an unusually high number? It turns out that Amtrak has one of the LOWEST productivity per employee rates in the world. In fact, Amtrak places in the bottom five railroads in the world for worker productivity. That is a management problem, not a Congressional funding problem as many would lead you to believe.

   As soon as Amtrak stops being a jobs program and begins to be a railroad, some of its inherent problems that have been around for over 30 years will finally go away.

4. One other aspect to consider about today’s stunning blackmail attempt by Amtrak is what it will do to the bottom line from a human standpoint.

   How many of the few good managers still at Amtrak will now find new jobs even more quickly? How much of a talent and intellectual drain will this be of people who wonder if the long distance trains will truly disappear and bail out while the getting out is good?

   And, then there is the passenger. The one group Amtrak seems to ignore the most. How many reservations will be cancelled in the next 72 hours? How many reservations that were going to be made for Spring or Summer travel are now not going to be made?

   If Amtrak senior management foolishly thought today’s announcement would have no impact on its business between now and October 1st, they are sadly mistaken. Travel agents will not willingly book clients on Amtrak because of the uncertainty. Regular users, like school groups and other tour operators will now find some other ways to move their people.

   If you thought the trains are empty now, wait another 10 to 30 days. Consists will shrink because of low demand. Less employees will be needed because less passengers will ride.

   Amtrak’s blackmail demands of today will become a self-fulfilling prophesy; passengers will stay away in droves.

   Then, George Warrington and The Gang of Four executive vice presidents and the board can pull the plug on the national system and VIA Rail Canada will suddenly look like a full service provider again.

   The last thought is, how did we ever arrive at this moment? How could an entire government let one man and his ill-advised senior managers take down an entire national railroad system? Clearly, the executive corps at Enron are not the only reprehensible bad guys working in America.