Volume II Number 19 - This Was The Week That Was - An Amtrak Saga

March 08, 2002

Moving on (at very long last):

1. Now, with the announced departure of Amtrak President and CEO George Warrington, what now? Who will be named interim president? Who will the permanent president be in a few months? How will that process work? And, what about the board of directors? What about the threatened trainoffs for the national system?

   All questions that demand an answer. There are already some clues about what can be expected.

2. Let’s start with the Amtrak Special Employee Advisory published and distributed yesterday, Thursday, March 7, 2002.

   Newly minted Chairman John Robert Smith, appropriately speaking on behalf of the board and the company said, in part,
   

   “On behalf of the board, I want to make two commitments. First, I want to assure every employee of this company that the board of directors is fully committed to staying the course when it comes to Amtrak’s future. That means vigorously pursuing an adequate level of federal support in FY 2003 and working with Congress and the Bush administration to secure a federal reauthorization that charts a clear course for America’s passenger rail system. It also means doing everything we can to preserve a national network that serves all regions of the country.

   “Second, the board intends to appoint in short order an interim successor. George [Warrington] will continue to serve as President and CEO until that occurs. To continue George’s legacy of outstanding leadership and accomplishment, the board and I are firmly resolved to undertake and complete a national search for a new President and CEO who can help continue to build on our successes in the long term.”

   Several points come to mind: His Honor made a very plain statement that he and the board support a national system. That’s very positive, but he talks in terms of “doing all we can to preserve a national network” instead of stronger words like “guaranteeing” or “building further.” Still, it’s a positive statement.

   Mayor Smith also spells out that the board will launch a national search for a permanent president. The last time, that process took close to a year. Don’t look for a permanent replacement any time soon if this board (the same one as last time) moves at the same pace.

3. On the matter of an interim president, what are the choices? Amtrak currently has five board members that are not full time employees of the federal government, four executive vice presidents, and four business group presidents.

   The board members are Mayor John Robert Smith of Meridian, Mississippi, former Governor Michael Dukakis of Massachusetts, former Governor Linwood Holton of Virginia, Ms. Amy Rosen of New Jersey, and Ms. Sylvia de Leon of Washington. One seat still remains vacant, but is expected to be filled very soon.

   Mayor Smith is the full time mayor of his small southern city, and a pharmacy and gift shop owner. Governor Dukakis is a full time professor of government studies. Governor Holton is semiretired and “of counsel” to a Richmond law firm, and Ms. Rosen is a consultant in New Jersey; she also has had a professional relationship with New Jersey Transit. Mr. De Leon is a Washington attorney and lobbyist who has represented American Airlines.

   There have been loud whispers that Ms. Rosen would like to be the next president of Amtrak. Reportedly, she has, for a number of years, had a very strong hand in the daily operations of Amtrak, much more so than is common for a board member.

   The four executive vice presidents of the company are Stan Bagley, EVP, operations; Arlene Friner, EVP, finance; James T. Lloyd, EVP, law; and Barbara J. Richardson, EVP, customer service and other related areas.

   Mr. Bagley is considered by most to be the strongest of this group; he has been with Amtrak the longest, has the largest area of responsibility of running the railroad on a daily basis, and was president of the Northeast Corridor during the development of the Acela program after Mr. Warrington became president of the whole company. Many long time front line employees of Amtrak consider Mr. Bagley to be “a real railroader,” as compared to other executives that have joined the company from the outside with little or no railroad operating experience.

   Many of the faults of the Acela program have been laid at the feet of Ms. Richardson (no relation to your humble correspondent), including the label applied to her by the United Transportation Union, “Decorator General,” for her work on the color schemes and other amenities of the Acela program. Ms. Richardson, however, is a very strong practitioner of public relations and corporate communications, and as one of the offices under her direction, she has headed the Office of the Board of Directors (This job handles many routine matters and correspondence for the various board members and their dealings with the company).

   The four business group presidents include Don Saunders of Intercity, Gilbert O. Mallery of Amtrak West, Lee H. Sargrad of Amtrak Mail & Express, and the newly appointed James Weinstein (late of New Jersey Transit) as head of the NEC/Acela program.

   Mr. Mallery is the sentimental favorite of many; Mr. Saunders has been doing yeoman’s work holding Intercity together after the many debacles of his three immediate predecessors, and Mr. Weinstein has been at the company less than 90 days. Mr. Sargrad has been with Amtrak for about a year, coming over after leaving one of the Class 1 freight railroads.

   By virtue of responsibility for most of the geography of the country and the huge number of passenger revenue mile generating trains, Mr. Saunders should be named the interim president. He is held in high regard in railroad circles, and is well liked by many employees. He has one drawback that is also a problem for Mr. Mallery: neither live on the East Coast. Mr. Saunders is in Chicago, and Mr. Mallery in Oakland, California. The Amtrak board has a blind spot when choosing someone to run the company that doesn’t have an address in one of the original 13 colonies.

   Mr. Saunders should have the job; it probably will go to Stan Bagley. A surprise choice would be Arlene Friner; she receives high marks for keeping a bad financial situation nearly manageable while many walls crumble down around her.

4. On the matter of a permanent president, some familiar names are in the race. Again, Ms. Rosen would probably like the job. Also in the running is last time’s runner-up, Andrew Selden, a corporate attorney from Minneapolis, and a man Trains magazine dubbed “The Dean of Amtrak Critics.”

   One name that has been mentioned by many and is becoming overtly obvious is James Coston of Chicago, an attorney, current member of the Amtrak Reform Council, and founder of the 20th Century Railroad Club.

   No doubt, several transit agency heads will take a look at the position.

   Some have futilely hoped that a current executive from one of the Class 1 freight railroads will come and “rescue” Amtrak.

   Look at the reality of that situation: Anyone who takes the permanent helm of Amtrak now will HAVE to be someone who is either financially secure, secure in their industry, or someone who is willing to take a huge, possibly career-ending risk.

   Also, the salary for the presidency of Amtrak is woefully inadequate; it is about the same that an assistant vice president makes at one of the large Class 1 freight railroads. Anyone from the executive suite of a freight railroad would take a huge salary cut to go to Amtrak.

   There are some possible candidates among the early retirees of senior executives of the freight railroad ranks, but who wants to come out of retirement to work a mind-numbing schedule for little reward other than personal satisfaction? Former Amtrak president Graham Claytor fit this mold; but, after staying 15 years, he was so elderly during the final period of his tenure that he was ineffective and difficult to deal with for many people.

   Mr. Selden and Mr. Coston have similar backgrounds: a passion for passenger rail, and submersion in the topic as an avocation for decades. While Mr. Coston serves on the ARC, Mr. Selden, the author of the Selden Plan, was one of the founders of United Rail Passenger Alliance.

   Mr. Coston has been crisscrossing the country making speeches and making his views known. Mr. Selden has been submitting testimony and plans to Congress, the ARC, and the Bush administration. He has been a frequent visitor to Washington, working with various offices there in support of the tenets of the Selden Plan and passenger rail in general.

   So far, Mr. Selden and Mr. Coston are the only candidates that have outlined a vision for a national passenger rail system. Mr. Selden’s more complete vision and superior plan can be viewed at http://www.unitedrail.org. Mr. Selden is the obvious choice as the next president of Amtrak.

5. Organized labor is the other group sitting at the table at this party. The three Democrat appointees to the Amtrak board, Governor Dukakis, Ms. Rosen, and Ms. De Leon all have strong ties to labor. Democrats generally view Amtrak as mostly a labor issue since the company has about 20,000 employees that are under contract.

   Republicans, alas, have just recently learned to view Amtrak as anything other than a liability. Slowly, Republicans have come to the understanding that a strong national rail system as part of a healthy domestic transportation network is not only good for business, but helpful to the economy and the traveling citizenry.

   If Amtrak went away, labor would lose too many jobs. For years, labor, seemingly unable to look into a brighter future, has wanted to maintain the status quo at Amtrak, and keep it limping along on free federal money. Labor has supported very little change at Amtrak, even though major flaws in the way Amtrak conducts business have been glaringly apparent.

   Here is how labor will win on this issue, no matter who is the new president: Congress has made its feeling known that a national system is here to stay, in some shape or form that will be decided over the next few months.

   If Amtrak stays just like it is now, labor wins, because 20,000 jobs stay in place.

   If Amtrak grows under a new president and new plan, labor wins, because growth will dictate new union jobs.

   However, if, for some reason, Amtrak loses its national network and just becomes a few corridors, labor loses, because corridor jobs will never outnumber national system jobs over a sustained period unless another management team mirrors the now departing team.

   Labor, like so many others, needs to look to the bright future, not cower and hope to recreate or maintain the past. The New Amtrak that Congress reauthorizes may very well have the best chance that Amtrak has ever had for success. It would be a shame if organized labor worked against this possibility.

That’s it for now. It’s a time for change and hope for a more honorable future for passenger rail in our country. While the monster is not completely under control, it has become far more manageable with the impending change in command.