Volume 4 Number 35
- Amtrak Chairman of the Board David Laney is an American hero. His term as a member of the Amtrak Board of Directors is nearing and end, and he has signaled he doesn’t want a second term. Jonathan Hutchison of Amtrak Governmental Affairs in California made the announcement concerning Mr. Laney at a San Joaquin Valley Rail Committee meeting on October 11th.
Mr. Laney was the right man at the right time at the right place for Amtrak. Appointed by the Bush White House and consented to by the United States Senate, he became Chairman after the chairmanship and term of Meridian, Mississippi Mayor John Robert Smith ended, and Mayor Smith rotated off of the board.
At the time Mr. Laney became Chairman, and other board members of the board were replaced by new members, David Gunn was President and Chief Executive Officer, having been selected by the previous board after an abbreviated search process.
Mr. Gunn, as history shows us, became a lightening rod for controversy (much caused by himself) and outspokenness. Mr. Laney moved quietly in the background, cleaning up after Mr. Gunn’s follies. Finally, when Mr. Gunn made his position untenable, Mr. Laney and the rest of the board correctly took action to remove Mr. Gunn and find their own replacement as president and CEO.
The removal process of Mr. Gunn became politically messy (as much with Amtrak seems to do), and it was up to Mr. Laney to face hostile congressional hearings, which he did with great aplomb.
In the course of history, when events are seen with an unemotional eye, much credit will be given to Mr. Laney’s work on the Amtrak board. After years of contentious budget hearings on Capitol Hill, Mr. Laney quieted things down and put the process of obtaining free federal monies on a professional — versus emotional — basis. He deftly deals with other government agencies, such as the United States Department of Transportation in the best interests of Amtrak. Mr. Laney is an activist chairman, traveling around the country speaking on behalf of Amtrak and passenger rail in general to important interest groups and the news media.
Mr. Laney has not been afraid to explore new ideas, despite what has often appeared to be very bad advice coming to him from inside the company’s executive ranks and planning department. Under his leadership, the board started a worthwhile process of studying the idea of spinning off the black hole of the Northeast Corridor to another government agency. He has helped start the process of making the NEC tenant commuter agencies pay a greater fair share of NEC maintenance and operating costs. And, especially under his stewardship, he helped eliminate the welfare benefits made available to short distance Amtrak NEC riders by raising ticket prices to somewhere closer to realistic market levels.
The long distance system under Mr. Laney has been seriously studied for improvement. While we have witnessed poor decisions such as the downgrading of long distance train dining car service, and we still haven’t seen any notable progress about restoring the Sunset Limited east of New Orleans into Florida, we have seen an overall preservation of the long distance system in a skeletal condition.
Internally Mr. Laney has helped accomplish much in terms of not always defending the executive rank status quo at Amtrak. We have witnessed the merciful departure of many top executives, and only a few notable misfires in the naming of replacement executives.
Overall, when a new Chairman of the Board of Directors of Amtrak is named, Mr. Laney’s legacy will be strong, and one that will note a benefit for the taxpayers of America and the believers in a balanced transportation system that included passenger rail. Mr. Laney is an American hero.
- The Amtrak Board of Directors is often populated by political appointees who take seriously their role in politics, but don’t take seriously their role as stewards of public monies and public interest. While there have been many worthwhile Amtrak board members in the past, such as Paul Weyrich, Haley Barbour, Charles Luna, Ralph Kerchum, and others, so often the board could best be described as a collection of eccentric political pols basking in the glory of a political appointment.
David Laney and the undersized board he has directed these past few years has been an exception to that rule. Mr. Laney’s own background, as a high level corporate transaction attorney, and the combined efforts of luminaries such as Floyd Hall and the now departed Enrique Sosa, both highly professional members of corporate America, have helped move Amtrak towards eventually becoming a healthier and long lasting company.
The politics of the Amtrak board during the Bush presidency have been odd. Mr. Bush made qualified nominations to the board, such as retired World Bank railroad expert Lou Thompson, a Democrat and probably one of the two most qualified men in America (the other being former Federal Railway Administrator Gil Carmichael) to be on the Amtrak board, but the Senate, in a snit because Mr. Thompson wasn’t THEIR Democrat, wouldn’t bring his nomination up for a vote by the full Senate. The whole mess was a tragic opportunity lost, and a loss for the entire nation.
Mr. Hall and Mr. Sosa, both distinguished businessmen from the highest ranks of American business, had to serve as recess appointees because the Senate, again, wouldn’t bring their nominations up for full Senate vote confirmation.
As a result, Amtrak for too long of a period of time operated with an abbreviated population of board members, which caused unnecessary diversion away from the business of making Amtrak a viable institution as debate raged over the viability and legality of the Amtrak board.
Amtrak has been a political football from the day it was first a gleam in the collective eye of John Volpe’s Department of Transportation in the Nixon Administration. The shenanigans of putting people on the board during the past few years has confirmed Amtrak’s standing as a current political football, and yet another place for partisan bickering. Someday, that’s got to come to a screeching halt.
- So, what, now? There is already one open seat on the Amtrak board which has never been filled, and the departure of Mr. Laney at the end of his final year will open up a second seat. Will politics as usual continue? Will cooler heads prevail?
What would be best for Amtrak? The answer to that is simple.
First, immediately appoint Lou Thompson to the vacant seat. Appoint a Democrat to be confirmed by a Democrat controlled Senate. The Democrat opposition to Mr. Thompson was voted out of office, so there should be no one to be personally offended by Mr. Thompson’s nomination. Mr. Thompson would bring such a wealth of knowledge and background insight to Amtrak that everyone would benefit by his presence on the board.
Second, nominate Gil Carmichael to the board. Mr. Carmichael continues to have much respect in Washington and throughout the country. His unique vision and ideas about the future of freight and passenger railroads in our country are startling in their simplicity and brilliant in their imaginativeness. In addition to his service as FRA Administrator in the Bush 41 administration, Mr. Carmichael also served with distinction as the Chairman of the Amtrak Reform Council.
Neither Mr. Thompson nor Mr. Carmichael would require any learning curve to serve Amtrak well. Their mere presence would bring a great deal of credibility to Amtrak and help guide the company to safe waters.
- Amtrak apologists throughout the tenure of the Bush Administration have incorrectly labeled these last seven years as anti-Amtrak years. The old canards about Republicans hating passenger rail have been repeated time and again, and every old saw about the Bush Administration wanted to kill Amtrak has been repeated to distraction.
None of it is true. The Bush Administration, when the record is reviewed seriously, shoveled huge amounts of money into Amtrak. Even though a tragic public relations blunder was made one year by initially zeroing out the Amtrak budget request in the DOT budget to gain attention to the mess Amtrak finances were in (and, mostly still are) at the time, billions of dollars have flowed into Amtrak under a Republican president and a then-Republican led congress.
One thing accomplished by the inept budget zeroing stunt was to get people talking and debating about Amtrak, not just handing it money year after year with no consequences. Much of that debate has contributed to the Senate Bill 294, the Amtrak reauthorization bill which is expected to pass the full Senate before the end of this calendar year. This bill provides some of the most needed — and sweeping — restructuring of Amtrak since the company was formed in 1970.
Former Bush DOT Secretary Norman Mineta became another topic of derision during his stewardship of Amtrak. A former well-respected Democrat congressman, Mr. Mineta was the only Democrat in the Bush cabinet. In addition to having the bad misfortune of being DOT secretary during and after 9/11, he also was badly served by his staff when the staff provided him with speeches and thoughts about Amtrak. Mr. Mineta’s background was mostly in the aviation industry, and rail was relatively new to him. Some of the speeches he made during the Amtrak debate and the positions he staked out were almost completely indefensible from a realistic rail industry standpoint. This provided yet another distraction from a serious debate about Amtrak and the future of passenger rail in this country.
All of this added up a near complete loss of faith by Amtrak apologists who instantly go into defense mode should anyone even think about tampering with the Amtrak status quo, even if that status quo is deeply flawed and hurtful to Amtrak’s existence.
As a result, any reference to the Amtrak Board of Directors under Mr. Laney has usually been negative and unnecessarily derogatory. Very few have actually attempted to analyze what the board has accomplished, or what the board has put in place for Amtrak’s future.
One of Amtrak’s constant sour notes is the proclamation that short distance and regional corridors are the future of Amtrak. This goes hand in hand with the Bush DOT position of shifting some of the costs of short distance and corridor trains to from the federal treasury to state treasuries.
While we know this does nothing for the overall health of Amtrak (it simply shifts incoming money from depositing one check from one source to depositing a check for the same amount from another source), it will eventually serve as a fairness mechanism, putting states on a more even basis when it comes to passenger train service.
We know California, Illinois, and North Carolina all pay annually for regional train service, and pay dearly. In New England, the Downeaster between Boston and Maine is completely paid for by regional money.
But, New York State, which is served by dozens of daily trains in and out of New York City and other points in the state, only pays to help support one daily service, the Adirondack, between New York City and Montreal. Everything else, including the commuter services of the Empire Service and the NEC trains all come out of Amtrak budgets, even though the tickets are still radically under priced for the service provided. New Jersey still pays nothing for Amtrak service, as well as Virginia, Maryland, Delaware, Connecticut, Rhode Island, and Massachusetts. Pennsylvania gets a free ride for NEC trains between New York and Washington, but pays heavily for the Keystone Service west of Philadelphia.
If the intention of states paying more for local service was to bring the NEC states in line with other states such as California and Illinois, then that intention is good, and Amtrak would end up a healthier company without the constant financial drain of the NEC. If the intention of states paying more for long distance services as part of the national system where overnight trains originate in one state and end up at another end of the country, then that is bad. We still have not seen a clear declaration of that policy.
- In the end, Amtrak and America have been fortunate to have had the services of Mr. Laney, Mr. Hall, and Mr. Sosa. While not everyone (including this writer) agrees with all they have done or not done, they have accomplished far more in moving Amtrak away from being a financially handicapped company to one that has a chance of survival.
That is why we say “thank you” to these three gentlemen for their service to their country through their stewardship of Amtrak. Their work has helped move Amtrak in the right direction.
- One important change has occurred at Amtrak. National timetables are now going to be updated and printed four times a year instead of twice a year. This is very good, and seems to be an indication Amtrak is serious about making system changes more frequently, and adjusting to demand as market forces come into play.
Also, we can only hope Amtrak will see this golden opportunity to make money from its timetables. Printing four times a year should be very appealing to advertisers wishing to tap into the passenger rail market. With double the frequency of printing, there should be many more instances where advertising to Amtrak passengers is appealing to many players in the hospitality, entertainment, and other parts of the travel industry. Here’s hoping Amtrak realizes what a great opportunity it has to create an entire new area of income and profit.
- There’s always something interesting happening on the Left Coast in California. URPA’s senior professional associate, Russ Jackson, regularly reports on rail events in California. Here is his report (abbreviated for interest) from a meeting of the San Joaquin Valley Rail Committee on October 11th. Mr. Jackson brings news about an important retirement from the Amtrak executive ranks, an important transfer of another executive, a possibility of a long sought after new route, and news of schedule changes. Much of Mr. Jackson’s excellent reporting may be seen regularly on the web site of the Rail Passenger Association of California & Nevada at http://www.railpac.org .
SAN JOAQUIN VALLEY RAIL COMMITTEE
Meeting Report, October 11, 2007
Bakersfield, CaliforniaReported by Russ Jackson
RailPAC was well represented at the quarterly meeting of the San Joaquin Valley Rail Committee, led by Director Bruce Jenkins, and Associate Directors George Gaekle, Mike Barnbaum, and this writer. What made the meeting important was some news that we heard for the first time.
… A spirited discussion of connectivity for the San Joaquins to Amtrak’s long distance trains, particularly the California Zephyr and the Sunset Limited, was sparked by Stanislaus County representative George Gaekle, who again expressed his dissatisfaction with the current schedule that does not permit connection to either train from the San Joaquin Valley. Under the current schedule a bus connection from train 711 to train 6 is at Reno, Nevada! “We know you can do it,” Mr. Gaekle said. …
The good news (almost) came from Caltrans Thruway bus supervisor, Rick Peterson. He stated that starting with the October 29 timetable change train 6 (California Zephyr) will arrive in Sacramento 55 minutes earlier but still not early enough for the 711 connection (an unreliable 14 minutes), so it will remain in Reno. This improved schedule was made possible by the early elimination of some Union Pacific slow orders in Nevada. The UP’s Tom Mulligan reported there is great progress in the Nevada work, with Sparks to Winnemuca completed, the next phase from there to Elko is under way, and “if weather permits” this winter work will continue to Salt Lake City and completion in two instead of the anticipated three years.
The westbound train 5 schedule will also be shortened by 25 minutes into Sacramento starting October 29, so the connection to train 718 will continue. Trains 5 and 6 have been operating close to scheduled time almost daily in the past month or so. Further schedule changes will take place as soon as the UP completes track work, so the connection to 711 will be restored as soon as possible. Amtrak is working to have the Sunset Limited departure time from Los Angeles moved ahead to 3:30 if Metrolink will agree, which would restore the connection with the San Joaquins..
However, the fate of some Thruway connecting buses could be in jeopardy. State law requires these routes to “break even after two years.” Mr. Peterson told this writer that while most Bakersfield to Los Angeles buses earn 300% of costs, other routes are not doing so well. “Bus operations costs have increased 40% lately due to fuel and some labor costs,” rising faster than ridership. While no routes will be canceled October 29th, evaluations in process could produce changes next Spring. Routes such as San Francisco to Stockton, San Jose to Stockton, Merced to Monterey, and Bakersfield to Santa Barbara among others are showing low results and could be a problem to retain.
Another spirited discussion involving the freight railroads and Tehachapi pass for passenger trains ensued, following on reports the BNSF and this line segment owner UPRR are working on double tracking much of the remaining single track segments on this route. The question, again from Mr. Gaekle, was whether there was any involvement for passenger trains in this project. Tom Mulligan, the UP’s “Director of Passenger Operations” was present, taking some kidding when he admitted his railroad “does not operate any passenger trains of its own, only those under contract from Amtrak.” When pressed by Mr. Gaekle, Fresno representative Larry Miller and others, Mr. Mulligan and the BNSF’s Mitchell agreed that if Amtrak requests to have service on this line “the process will begin.” (seeing the UP and the BNSF side-by-side at this meeting was refreshing) Extension of the San Joaquins would have to be initiated by Caltrans and it must go through Amtrak. Retired Supervisor Illa Collin representing Sacramento County asked for a “ballpark figure” of costs for a project like this, but neither railroad could give one. The “news” from this discussion was there was no “flat no” to having passenger trains there, which has been the response in the past. Mr. Mitchell did say, however, that if it was train 718 extended to Los Angeles overnight as the Committee proposes, the 5 hour running time from Bakersfield (compared to 2 hours by bus) was not something he would ride. When Tulare County representative Ty Holscher asked about running service on the UP south of Fresno, Mr. Mulligan replied in the same vein, “go through Amtrak and the process begins.” Again, no total rejection.
Amtrak’s Jonathan Hutchison reported on the exciting prospects for Amtrak’s budget for the coming year, with both houses of Congress passing significant amounts, and each version containing state capital- matching funds. The latter amount ($100 million), while relatively small, is considered “seed money” for future allocations. The President has threatened to veto the DOT authorization bill containing Amtrak, but this time Amtrak is not the issue. If a “continuing resolution” is the result rather than full passage, Amtrak stands to receive what it had last fiscal year, $1.294 billion.
Mr. Hutchison announced that former Amtrak West President Gil Mallery, who has been President for Strategic Planning and Contract Administration working out of Washington DC, has retired from Amtrak. His replacement is Don Saunders, who has been Superintendent for the Central Division in Chicago after working here on the West Coast for some years. Mr. Saunders’ new title will be, “Assistant Vice President, State and Commuter Partnerships-West,” and he will be stationed in Oakland. “This does not mean the return of Amtrak West,” Mr. Hutchison said, but does mean more localized decision making. The Committee applauded this idea. In another announcement, Amtrak Board Chairman David Laney has indicated he “does not want another term,” which opens another board seat. When replacements will be appointed is unknown. …