United Rail Passenger Alliance

Vol. 2, No. 38 – November 28, 2005

1. Many distinguished Americans have become part of the debate on the future of Amtrak. One of the most venerable voices in the debate is that of Gilbert Carmichael of Meridian, Mississippi, former Federal Railroad Administrator, and former Chairman of the Amtrak Reform Council. Mr. Carmichael shares his thoughts below:

   “November 21, 2005

   “An Open Letter to Amtrak Supporters

   “Recent actions taken by the Amtrak board of directors have given rise to an outpouring of unjustified hysteria on the part of rail passenger advocates and members of Congress. I am convinced that the board’s action to create a separate business unit for its Northeast Corridor operations is both necessary, and long overdue.

   “What we really have here is a ‘culture war.’ On the one side is what I call the Old Amtrak, which by any standard is failing the American people. On the other side are reformers like Amtrak Chairman David Laney who see an opportunity for a New Amtrak that could deliver modern services to the American traveler that actually would count for something in the marketplace

   “Unfortunately, for years the reformers have been hamstrung by a ‘know-nothing’ culture that has prevailed in Amtrak management for at least a decade. The Government Accountability Office’s investigation has disclosed that, among other failures, Amtrak management can’t tell us which of its services are the biggest financial losers, and which represent growth opportunities.

   “For years rail passenger advocates outside the Northeast have claimed that the long-distance riders are subsidizing an expensive Northeast corridor’s short-distance operations. Amtrak’s zany accounting, they contend, hides the true extent of NEC costs. These people should be applauding the board’s recent move, because the action of placing the Northeast Corridor into a separate business unit for operations and accounting purposes is the only practical way to determine the facts. This action reflects implementation of one of the Amtrak Reform Council’s core recommendations made over three years ago.

   “This division of responsibilities would result in a Northeast Corridor subsidiary that would consist of the NEC track structure, real estate, debt, and about 5,000 maintenance employees. The remaining entity would be the (New) Amtrak passenger operating company, which would control the locomotives and passenger cars, and about 15,000 train crew members and other service employees (no one gets fired!). The operating side of Amtrak generates about $1.1 billion annually, primarily through ticket sales. The operating company would pay the NEC subsidiary a fee to run on its tracks, just as the commuter agencies do.

   “Among other benefits, this arrangement would do several things: (1) Allow the new passenger operating company to do what Amtrak should be doing – upgrading its train sets and concentrating on running trains and serving passengers. (2) Find out exactly what it costs to run all individual trains and categories of service. (3) Establish a NEC management whose priorities center on the infrastructure it controls. (4) Determine a precise annual budget and capital needs that confront the Northeast Corridor, especially the amount needed for critical life safety requirements.

   “I believe that there is a vital role for the New Amtrak in providing rail passenger service to the traveling public at a reasonable cost. But we are at a crossroads. Will reform efforts be allowed to move forward to exploit these opportunities? Or will Congress insist upon propping up the Old Amtrak. We have an excellent chairman in David Laney. He reminds me so much of Graham Claytor’s hard-headed leadership. He’s a reformer and we need to help him.”

   Gil Carmichael Federal Railroad Administrator 1989-1993 Chairman, Amtrak Reform Council 1997-2002 Senior Chairman, Intermodal Transportation Institute, University of Denver

   Gil Carmichael may be reached by electronic mail at gil@missouth.com

2. Another voice, this time from the Northeast, is that of Tom Nemeth, Editor-in-Chief of Railpace Newsmagazine, which is known as “The Northeast’s own rail newsmagazine.” Mr. Nemeth published the following editorial in the December issue of Railpace Newsmagazine, which was dated just before the deselection of David Gunn as Amtrak President and CEO. He writes from Pennsylvania.
   

   “A New Dawn for Amtrak

   “The Amtrak Board of Directors voted September 22, 2005, to prepare the groundwork to create a separate Amtrak subsidiary to own and operate the infrastructure and real estate of the Northeast Corridor. Finally, the huge expense of maintaining and improving the NEC would be removed from Amtrak’s primary budget, enabling Amtrak to become an operating company concentration on its primary mission – operating NEC, regional and long distance passenger trains.

   “This could break Amtrak’s moribund culture of ever-increasing subsidies for its ever-shrinking service. Also reportedly in the works is a major house-cleaning of non-performing Amtrak bureaucrats and departments, where career government staffers keep their heads down, just counting the days until their pensions – with little concern for growing the company and finally making Amtrak relevant within the national transportation milieu.

   “As expected, current Amtrak management, including President David Gunn, opposes the NEC infrastructure divestiture plan – which itself indicates to many observers that the plan has merit. After 35 years, the American public deserve more than the shrinking, Northeast Corridor-obsessed mindset of Amtrak’s vacillating leadership. ‘Downs-sizing’ the company was once the mantra, as Amtrak worked to abandon its way to profitability. ‘Corridors’ were to be the salvation. George Warrington said Mail and Express was going to put the company on the ‘glidepath to self sufficiency’ until that myth was debunked, and it was discovered that Amtrak was keeping multiple sets of books. Warrington was banished to NJ Transit. David Gunn proffers a ‘State of Good Repair,’ which offers no growth, and continues the train-offs and downgraded amenities. You can’t take a through train from Boston to Chicago anymore, and First Class passengers from Boston now ride coach to Albany. Under Gunn, you can’t take a through train from Philadelphia to Chicago anymore, either. You can’t get to the nation’s #1 tourist destination, Las Vegas, on Amtrak anymore. And Amtrak recently cut service to Orlando by one-third. What is the matter with these people? Despite an earlier ‘Corridors’ initiative, Amtrak this year savaged the Philadelphia-Pittsburgh corridor, cutting service to one daily train, after years of hard work to build ridership on this route. And ‘Working with the States to Fund Trains’ becomes a sham after Amtrak tried to extort Pennsylvania to support a second Pittsburgh frequency on short notice. Pennsylvania officials have told us that the state could come up with money for a second train frequency in the next budget, but hey – you have to plan and budget for these items. There was no reprieve for the Three Rivers – Amtrak just didn’t want the train.

   “Amtrak management has shown a total lack of vision and leadership, and lack of accountability to its owners, the American taxpayer. It is incumbent upon Amtrak’s now-capably-staffed Board of Directors to clean house from top to bottom! Amtrak needs visionary, growth-oriented leadership; men and women bold enough to build ridership on existing trains, and to explore new services to places where Americans want to go.

   “Congress will fund Amtrak when it sees improvement – and the new Board’s first proposal appears to be a step in the right direction.”

   Tom Nemeth may be reached by electronic mail at railpace@ptd.net