United Rail Passenger Alliance

Vol. 2, No. 12 – June 16, 2005

1. Just a scant 16 years ago, VIA Rail Canada was twice the passenger railroad it is today. There were two magnificent trains between Toronto and Vancouver, including the original CP route of the Canadian. Both the Atlantic and the Ocean operated between Montreal and Halifax. VIA still had the Rocky Mountaineer, and lots more. Today, VIA’s mere skeleton of a system hardly represents the proud Canadian national heritage of a country that was built on rails.

   So, what happened? VIA’s at-the-time arrogant management kept annoying the government (it’s owners and bankers, just like Amtrak), and ignoring requests for change. Canadian government officials finally had enough, and slashed VIA’s funding to the bone. In the blink of an eye, VIA lost almost half of its system, and the confidence of the government.

   David Gunn, call your office. Either learn of the mistakes of the past, or be doomed to repeat them, even if they were made by our Canadian cousins.

   Once again, someone forgot to make sure Mr. Gunn, Amtrak’s President and CEO, and the third of the Transit Trio of Tom Downs, George Warrington, and Mr. Gunn, was wearing his muzzle when around the media, and once again, Mr. Gunn has demonstrated what a complete and utter political tin ear he has for politics.

   In a story appearing in the Philadelphia Inquirer and distributed nationally by the Inquirer’s wire service, Mr. Gunn, in response to a Congressional subcommittee’s Amtrak budget recommendation of only $550 million (as opposed to the $1.8 billion Mr. Gunn and Amtrak has asked for) has accused the committee members of being ideologues, having no practical knowledge, or management skills, plus, not to mention knowing nothing about running a railroad.

   Let’s make a quick review here. David Gunn has a known habit of making dramatic (and often nothing more than that) announcements to the press, warning of dire consequences if he doesn’t get his way. This has been documented time and again through his transit career, as he has constantly battled transit boards and city councils.

   Now, he’s taking on Congress, perhaps the best street fighters in the political business. One does not become a member of the House of Representative or the Senate unless he or she is a very savvy politician. Mr. Gunn seems to be forgetting this, thinking he can bully Congress the way he has bullied transit boards.

   Remember the lesson of VIA Rail Canada. David Gunn may win a minor victory or two in the press, and the minority Democrats may applaud him for sniping at majority party Republicans, but in the process, just to assuage his ego, may be betting our country’s entire national passenger rail system. Is that worth the price for keeping David Gunn on Amtrak’s payroll any longer?

   It’s quickly becoming past time for the Amtrak board of directors, all good and experienced business people who not only understand professionalism, but the ways of the world including politics, to step in and relieve Amtrak and our country of the burden of David Gunn.

   This year is a momentous year for Amtrak. Never have so many people been spending so much time and effort talking about Amtrak and its future. Now is not the time to have a loose cannon like David Gunn doing more harm than good.

2. All of this begs the question, why is Amtrak’s national system under such constant attack? Why, the answer is simple. Amtrak for over a decade has been preaching that long distance trains are bad, and corridor trains are good.

   Yes, the disastrous policies of the Transit Trio since the mid-90s have now become a giant millstone around Amtrak’s neck. Otherwise normally reasonable people, after more than a decade of false propaganda, think that Amtrak’s national system is worthless, and unworthy of continuing operations.

   So, the people in charge (Congress and the White House) are acting on Amtrak’s false propaganda, and taking Amtrak at its word that the national system has to go. Suddenly, Amtrak is appalled that anyone actually believed them, and wants to keep the national system.

   All of this is a result of poor stewardship by Amtrak’s previous board of directors, who willing rubber stamped the policies of former Amtrak presidents Tom Downs and George Warrington, the people who brought us the Wondertrain Acelas and the emphasis on corridors. Oh, and by the way, if you didn’t know, Tom Downs left as head of New Jersey Transit to head Amtrak, and George Warrington, previously of New Jersey Transit, and then Amtrak, is now back at New Jersey Transit as its chief officer. The majority of David Gunn’s previous railroad career was as head of transit agencies, running subways and such.

   Trying to apply transit policies to Amtrak has proved to be a disaster. There is a distinct difference between the transit industry and the long distance passenger rail industry. The policies, methods, marketing, and many other areas are not interchangeable. Yet, almost every action Amtrak has taken in the past decade has moved Amtrak closer to having the flavor of a transit agency than taking advantage of the many unique facets of passenger railroading. All of this has led to today’s Washington debate about long distance trains and the future of Amtrak.

   Amtrak’s greatest hope lies in the Senate, where many Senators have adopted the slogan of “national system or nothing.” We have yet to hear from the Senate Commerce Committee on a final proposal for Amtrak this year. While David Gunn is huffing and puffing about his unhappiness with the House of Representatives, perhaps the Senate will take the right view for the future of Amtrak.

3. And, just to make things even more interesting, Amtrak has gotten itself into an involuntary food fight on Capitol Hill. Congress has decided to examine how Amtrak feeds its passengers and the associated costs. Why now? Again, the horrendous transit policies of the Transit Trio as currently enunciated by David Gunn and Amtrak, making the world believe that a pack of peanuts and a can of soda is enough for anybody traveling on a public conveyance.

   Let’s turn back the clock and look at the advantages of passenger train travel, versus what passes today as convenient travel. Airlines, and Amtrak as a wannabe airline at times, have drastically cut back on passenger services. Everyone is emulating Greyhound. Just a seat on wheels or wings, with barely enough comfort to get by (and certainly, not enough room for comfort). Bring your own food, bring your own entertainment, and bring your pioneer spirit in the best traditions of covered wagons (at least at the end of the day, people in wagon trains probably cooked a hot meal).

   True passenger train travel (not as currently defined by Amtrak and its transit policies) includes a comfortable seat or berth, clean restrooms, a dining car offering full meals, a lounge car offering snacks, quick meals, and a variety of beverages, and plenty of room to move around. Those are some of the many advantages of traditional rail travel.

   When you take these elements away, what you have left is a Greyhound bus. If you’re going to ride in the atmosphere of a bus, why bother to do it in one on steel wheels?

   Amtrak’s biggest problem when it comes to food service is that there is too little food service. As said before, dining cars are the single most expensive piece of equipment on trains, including locomotives. Yet, the dining cars, and dining car staffs, are used less than any other piece of equipment.

   Orlando Sentinel columnist Jake Vest recently had the misfortune of taking a trip on the Sunset Limited between Mobile, Alabama and Winter Park, Florida. While he wrote of many aspects of his trip, he focused heavily on trying to have breakfast in the dining car. It seems the diner was only open for less than two hours, and Mr. Vest was denied seating because he arrived too late (He had the temerity to think that he could eat breakfast after the ungodly hour of 9 A.M. He must have thought he was at a plush resort instead of on Amtrak.).

   In 1999 and 2000, when the Sunset was still being run by the now disbanded Gulf Coast Business Group of Amtrak, almost a half dozen experiments in running a 24 hour dining car were successfully conducted. The passengers loved it, the dining car and other employees loved it, revenues were up, and it only took two extra employees. The experiment died when control of the Sunset passed from the Gulf Coast Business Group to another business group that believed in “business as usual” Amtrak-style.

   Amtrak’s dining cars and lounge cars create a great deal of revenue. The costs of operating the services are high by conventional restaurant standards, but they are predictable and manageable. The old canard that even the private pre-Amtrak railroads couldn’t make money in a dining car was just plain false. Amtrak and others are approaching the alleged dining car problem the wrong way. Instead of cutting costs, they should be growing revenues.

   A dining car is open about seven hours a day, despite the fact it is operating on a train that may run for 24 hours or more. When the car is closed, there is no revenue opportunity. Simple things can be done (such as Amtrak is mercifully trying now for lounge cars) such as placing inexpensive sample menus in the seatbacks of coach seats. Letting people know what is available is always the first step in making a sale. When this was done on the Crescent for the dining car by the same Gulf Coast Business Group, sales per trip increased by as much as $1,000 or more.

   In reality, lounge cars are cash cows. It is not unusual, during peak travel times, for a lounge car on a western transcontinental train to garner $8,000 or more in revenue per round trip. That’s generated by one employee working round trip, plus the cost of food. Amtrak’s lounge food costs range from less than 10% of the sale cost to less than 40%. There are huge markups in beverages, particularly alcohol.

   The problem in Amtrak’s food and beverage operations is not the onboard employees, and not the cost of food. The problem is in management, including proper deployment and use of assets, accounting, and long range planning.

   Amtrak can solve many of its own problems without Congressional mandates. Merely a change in management policy and vision will make the difference.