Up in Canada, our cousins in Cold Country are going through some heartburn about VIA Rail Canada and privatization. There have been reports some of VIA may be privatized, but federal government ministers in Ottawa (Which, by the way, is officially the coldest national capital city on Earth, even colder than Moscow, the hardy and ever-friendly denizens of Ottawa are always quick to point out to freezing visitors.) deny any such plan is in place.

The National Post newspaper in Canada, which competes with The Globe & Mail to be Canada’s most well-known newspaper, carried a column by Lorne Gunter earlier this month. Here are some excerpts:

I still say it’s absurd to keep VIA Rail rolling

By Lorne Gunter, National Post

This summer, my family and I spent nearly two weeks in Germany, following our national women’s soccer team during the Women’s World Cup.

Most of the time, we drove from place to place in a rented Peugeot. But once we got set up in a Berlin hotel for our final five days, we became committed train passengers.

Every morning, we’d board either a subway or an elevated train and roll off to see the largest part of the Berlin Wall still standing or a famous church that had been bombed out during the Second World War or the manor of Germany’s first Kaiser. …

… It almost made me wish we could do the same with trains here. Almost.

The two insurmountable hurdles to using trains in North America are distance and population density. No matter how hard train aficionados, environmentalists and fans of public transportation might wish it otherwise, train travel will never again be a practical alternative in much of this vast, sparsely populated land.

There are too many alternatives that are more comfortable, cheaper, quicker and more convenient.

Bloomberg reports that the federal Tories are quietly contemplating privatizing some or all of VIA Rail.

Good. It’s about time, just as it was about time in 1991 when the Tories under Brian Mulroney thought about selling off VIA, or in 2000 when the Chretien Liberals considered it, or 2003 (Liberals again) or 2009, the first time the current crop of Tories mulled it over.

Most years, VIA spends nearly twice as much as it makes. In 2010, for instance, VIA’s expenses were $536 million, while its revenues were just $274 million. That left a deficit of $262 million that had to be made up by Ottawa.

Put another way, for every dollar VIA charges passengers for tickets, taxpayers put in 96 cents.

Between 2005 and 2010, the federal government gave VIA subsidies totalling more than $1.6 billion.

OK, that’s slightly more than the CBC receives in a single year, but at least the CBC has signals that can be seen and heard across the country.

In most of Canada, there isn’t anything even approaching reliable, regular passenger train travel.

So the annual VIA subsidy amounts to an income transfer from people in most of the country who never use a passenger train to people in the central core of the country who prefer to take the train rather than drive their cars – but wouldn’t do so if they had to pay anywhere close to the full fare for their trips.

Every time I write about the absurdity of keeping VIA rolling, I get letters from people who insist they prefer the train to flying, driving or taking the bus, or who believe trains have a lighter environmental impact, or who say they can’t afford other modes.

Fine, but why is it taxpayers’ duty to split the cost of your unprofitable preferences with you 50/50?

A lot of that whining sounds familiar, doesn’t it? Of course, Amtrak’s annual subsidies make the subsidies for VIA look like peanuts. But, the point is, neither VIA Rail Canada nor Amtrak have done a good job of selling their cause to the public and the chattering classes.

The silliest of all arguments for keeping passenger rail around – the environmental argument – has become tired and shop worn. While any time any one uses a common carrier there is a benefit, it’s never a sole reason to use the common carrier, nor a strong reason in a business plan. The Utopians may wish that was the case, but it isn’t. The environmental argument is nothing more than a side benefit, not a guiding reason.

The next silly argument is the one about subsidies amounting “to an income transfer from people in most of the country who never use a passenger train to people in the central core of the country who prefer to take the train rather than drive their cars – but wouldn’t do so if they had to pay anywhere close to the full fare for their trips.”

The silliness of this argument is a conservative writer for freedom and choice, isn’t for choice when it comes to passenger trains. From the argument, once could suppose the writer is not only against passenger trains, but busses, trolleys, trams, golf carts, moving sidewalks at airports – anything other than a privately owned vehicle. The writer completely escapes from the logic that different situations call for different types of transportation, and the automobile/pick up truck/SUV model often is not the best or preferred choice.

In Canada, particularly, there are several remote small cities and towns and rural parts of Canada which can only be accessed by rail or air, and, in very few months of the year, by ship. There are no roads to these places because it is totally impractical to build and maintain roads under the harsh winter conditions. Over a century ago, railroads were built to these places, and, being the all-weather transportation of the day, railroads started doing a job they continue to do today, and do fairly well. Would the writer suggest ending these essential rail services to the most remote Canadians because keeping it is a transfer of wealth from people who will never visit these locations to the citizens who live there and use the essential train services?

The next silly argument is passenger train travel will never again be practical in a country the size of Canada. Really? Why? What type of hard data is there to make such a declaratory statement? This is the point where the rubber of advocacy writing meets the road. Here in the Lower 48, non-thinking people made that same statement as recently as 10 years ago. Oops! A whole new generation of Americans have come into their majority since then, and it seems they LIKE to ride the train when its available. The last of the generation which witnessed the downward spiral around the proverbial drain, the end of the Pullman Company, the end of most private passenger service, and the beginning of the myriad horrors of the stewardship of Amtrak have been promoted to Heaven, and, along with them, the built-in reluctance to ride a passenger train because of too many bad memories.

The same thing has happened in the world of commuter rail and urban transit. The Greatest Generation, which outwardly cheerfully rode streetcars through World War II and then happily abandoned them for four lane roads and fins on automobiles in the 1950s aren’t passing along their passionate desire for private automobiles as the final solution to every transportation problem. People in such diverse places as Florida and Arizona and California and Utah are all embracing public transit when it is provided to them as a reasonable, freely made choice – not the only choice.

The same will happen in Canada where our intrepid columnist is predicting in January of 2012 it will never happen. People will seek a choice, and what’s old and proven and reliable will suddenly be new and shiny and desirable again.

And, lastly, the silly argument about passenger fares being subsidized by taxpayers, and, therefore, if passengers had to pay full fares, there would be no ridership.

Such hogwash.

While VIA fares have kept up with inflation at a better rate than Amtrak fares, both VIA and Amtrak have proven through sold out consists in sleeping cars with nothing less than exorbitant sleeping car fares from roomettes to bedrooms on both and spacious drawing rooms on VIA there is great elasticity in first class accommodations fares. There seems to be a great reluctance to charge coach fares which have kept up with inflation, but sleeping car fares exceed the rate of inflation compared to what was charged by the Pullman Company prior to the creation of VIA and Amtrak.

Where does this bring us? Both VIA Rail Canada and Amtrak have done abysmal jobs of convincing anyone other than hard core rail fans of the desirability to having choices for travel other than private vehicles and airliners. It appears that not only is Amtrak America’s best kept secret, but VIA Rail Canada may be Canada’s, as well.

You can’t pass this off as something which has occurred simply because of the old canard of not having enough federal subsidies. You have to look at the root of the problem – a management problem – which in cases of both railroads have become far, far, too comfortable with annual handouts from their respective federal treasuries with free federal monies, so no pressing need for attempting to come anywhere near to balancing the books in favor of working towards anything which even resembles (Gasp!) a profit.

If both VIA and Amtrak effectively worked towards becoming better well known, better run, more successful in the public’s eye, and the eye of government, then these always silly arguments would simply go away.

Neither VIA nor Amtrak prove they are worth their salt. Even though VIA consistently has a better product than Amtrak (Take a ride on the Canadian from Toronto, Ontario to Vancouver, British Columbia or the Ocean through Atlantic Canada from Montreal, Quebec to Halifax, Nova Scotia, and then take a ride on any Amtrak train, even the Coast Starlight or the Empire Builder.), and aggressively advertises for foreign travelers on the Canadian and elsewhere, it has never quite convinced average Canadians its worth fighting for; as it appears with the writer for the National Post, it symbolizes a relic of the past instead of a beacon for the future.

It is to everyone’s detriment VIA and Amtrak have had such a careless attitude towards public and government relations. Instead of constantly bemoaning their status, they should have been working night and day to convince anyone who would listen they can be more self-sustaining, more self-reliant, and should ALWAYS have some sort of expansion plans instead of letting the world know they were only interested in the status quo – or less.

As the next generation of railroad entrepreneurs continue to hatch their plans for passenger rail throughout North America, the hardest task for them to accomplish is to get over the legacies which have been improperly created by VIA Rail Canada and Amtrak. While history will record that both companies were placeholders for what is to come in the future, history will record them as shabby placeholders.

Some of the next generation of railroad entrepreneurs have been operating in Canada for about 20 years, now.

Many will remember in 1989/90/91, when the then-government of Prime Minister Brian Mulroney slashed VIA just about in half, it also sold off the Rocky Mountaineer route to Peter Armstrong, a former Greyline Tours owner in Vancouver. Today, the Rocky Mountaineer is one of the most successful private rail operators in the world, and operates a fleet any railroad would be envious to own and operate.

The Rocky Mountaineer has been so successful, it has been able to politically block VIA Rail Canada from growing the service on the transcontinental Canadian to more than the tri-weekly train it is today, despite being one of the best rides anywhere, and a provider of basic transportation for many isolated communities across the desolate stretches of Canada between Toronto and Vancouver. The Rocky Mountaineer has been able to successfully make the argument (and, it’s not really a good argument from many perspectives) expansion of the Canadian, even though they don’t share a single station, and even in Vancouver, have separate stations, would cut into the Rocky Mountaineer’s market share.

VIA has had to roll over and live with this argument, knowing as popular as the Canadian is (especially among foreign travelers, who are clamoring for more service) the government won’t let it expand. The Rocky Mountaineer operates principally on the Canadian Pacific Railway right of way, and the Canadian operates principally on the Canadian National right of way.

All of the usual arguments are in place: three day a week service on the Canadian is highly expensive, especially for station costs, crew turns, and best use of equipment. Anyone familiar with passenger railroad marketing can look at the Canadian’s numbers and know at least five day a week service would be a smash success, and daily service would be a home run, and dramatically lower operating costs per departure.

The main point is, Canada has successfully privatized some of its passenger service before, and the time may be right to do it, again. The Canadian would be a perfect live-action laboratory to find a partner willing to work with VIA to help expand this route (If you really want to think big, think about a second daily frequency, too.) and create a scenario hurtling the train towards self-sufficiency and (Gasp!) profitability.

So, where are we here at the end of January 2012?

Did you notice that prudently Mr. Obama made no mention of high speed rail in his State of the Union address to Congress earlier this month? Good politicians know when to fold their cards and try something different. Now, if he had mentioned “high speed rail” in the right context, then that would have been something to be excited about, such as what is happening between Chicago and St. Louis. Incremental improvement built upon success and upgrades at reasonable costs instead of the type of ill-fated program being pushed in California by Governor Jerry Brown make great sense.

Meanwhile, in other California events …

Paul Dyson, the ever hard-charging President of the Rail Passenger Association of California wrote a message from the president to his members and others on January 12th headlined, “Amtrak CEO Gives Up on Amtrak, Joe Boardman condemns the long distance traings to a lingering death,” and then went on from there with some REALLY harsh words.

After the voluntary departure of 170 managers through it’s ill-conceived management buyout program, Amtrak went one step further and gave pink slips with a much, much less generous separation package to another 40 managers in mid-January.

While there is always a need to prune the management tree and kill off some budding empires within a company, this program – because of poor planning and even worse implementation – has cost Amtrak some of its very best managers and left the company in a somewhat helpless position during the dead of winter. Thankfully, to date, this has not been as usually of a harsh winter in many parts of the country.

Current Amtrak management has lost the support of many of its automatic defenders; people dealing in reality are having a terrible time looking kindly on just about anything Amtrak is doing at the moment. Only the staunchest of Amtrak True Believers and the blindest of its wholly owned lapdog organizations are sitting back and spouting the company line, “everything is fine, just give Amtrak more money and the world will be wonderful.”

United States House of Representatives Transportation and Infrastructure Committeeman John Mica of Florida was quoted in the Daytona Beach News-Journal daily newspaper on January 14th in a question-and-answer article written by staff writer Eileen Zaffiro-Kean:

… Could you tell us your position on the proposed Amtrak passenger service that would run from Jacksonville to Miami on Florida East Coast Railway tracks with stops in Daytona beach and seven other cities?

The latest proposal was to do one round trip a day. The cost has gone to $250 million to $270 million … You have to get pretty significant operational subsidies. I haven’t seen the final requirements of what one train a day would be, but someone’s got to pay that. It won’t be the federal government because we do not do operational subsidies. We will help to build a system, but not to pay for operating it.

You mentioned last week you thought a private carrier could do a better job.

Virgin Rail has looked at one of the routes. I think they’re looking at the Orlando to Miami route. I don’t know if Virgin Rail has looked at the whole Florida East Coast route. I was told they had looked at it, but I haven’t seen any proposals from them.

You also mentioned last week the FEC proposal has been around so long – more than a decade – that the cost has skyrocketed.

The cost started at $70 million to $100 million, and now it’s gone to $250 to $270 million. … I have not committed to support it yet. I haven’t seen what it would cost. I have not seen ridership studies yet. … I’m sure if Amtrak did it, it would be the most costly, most inefficient. I just don’t have much faith in them. Their biggest successes have been when they’ve partnered with a state or with someone else.

Do you think the rail service could work without federal money?

It’s all ridership. The private sector isn’t going to step up to the plate and put a penny into it unless it’s nailed down.

An interesting political note: Like every other state, Florida is be reapportioned after the 2010 census, and congressional district boundaries are dramatically changing, with Florida gaining new seats in the House of Representatives. Mr. Mica lives in Central Florida, near Orlando. All of the proposed maps for new districts put him in a very compact district in a high-population area. His current district covers parts of five counties, three of which the tracks for the FEC and the proposed route from Jacksonville to Miami run through. The new congressional district maps completely draw him out of most of those counties, and well away from the FEC route.

And, finally, coming up on February 12, 2012 is the effective date of the final rule by the Federal Railroad Administration spelling out how up to two of Amtrak current routes can be put up for bidding by private operators. This has been a big topic among the passenger railroad chattering classes, but, now it’s time to see who’s willing to do what.

Who will be the next president of Amtrak?

Things are not necessarily improving and not much of an argument can be made for retaining Mr. Boardman. Who’s out there? In this space in December we suggested perhaps Amtrak Board of Directors member Jeffrey R. Moreland, late of Burlington Northern Santa Fe Railway may be a superior choice to be an interim CEO and help stabilize and prepare the company for a new, long term president and CEO. Perhaps, if the company were very, very fortunate, they could draft recently departed Amtrak Vice President of Transportation Richard Phelps to come back to the company and take the top spot; nobody knows more about Amtrak than Mr. Phelps and there are few better railroaders than he.

The Amtrak Board of Directors needs to do something soon. Amtrak can’t keep going the way it is.

Gil Carmichael, former FRA Administrator during the Bush I years, and former Chairman of the Amtrak Reform Council, as well as the Founding Chairman of the Board of Directors of the Intermodal Transportation Institute at the University of Denver has started a new series of reports, entitled the Gil Carmichael Report, Investing in Interstate 2.0. The reports are free, informative, and a must read for anyone serious about the future of railroads in the United States. Contact the report distributor at geoff@jdmandassociates.com for your very own copy.

J. Craig Thorpe, noted Amtrak and railroad illustrator is available for all railroads, railroad-related companies, and organizations for his dramatic illustrations on a custom basis. Mr. Thorpe’s impressive gallery of work and contacts for engagement may be viewed on his web site, which is listed in the Links section.

Too many people are familiar with the tragedy of co-dependency, an abnormal condition where often a physically or emotionally battered spouse or mate stays or keeps going back to someone who is abusing them. The co-dependent person thinks they are acting and behaving rationally, and they “really do love” the person who is doing the abuse. It’s a sad, sad condition which is heartbreaking for those around someone who is co-dependent, because no matter how much you try and help them, they keep running back for more abuse.

It’s much like the situation between Amtrak and its legions of True Believers who refuse to see the forest for the trees, and, in many instances, want to embrace something new and better, but are unable to do so because of so many decades of Amtrak and its wholly owned lapdog organizations propaganda which have somehow convinced nearly an entire nation of otherwise rational people to believe Amtrak is the only – and single, with no exception – choice for passenger rail service in America.

Here at Business and Politics of Passenger Rail and sister publication This Week at Amtrak we receive lots of mail after each issue. Every one of us involved in these publications deeply appreciates the time and effort someone takes to send perhaps a quick note agreeing with us, or a longer missive providing some detail as to why we are not only wrong, but obviously it was a result of disagreeable breeding on the part of our ancestors. Then, there’s the one gentleman who has the answer to every problem: it’s all the Republicans’ fault, no matter what the issue.

It doesn’t matter what the message, all are welcome and each one is read and internally commented upon. If you’re dedicated enough to be a regular reader of this space and wish to comment – good or bad – more power to you, and thank you for your efforts.

What the latest batch of mail regarding the most recent issue of Business and Politics and thoughts about future passenger train operators in a post-Amtrak monopoly demonstrated is how much some folks are like a beaten puppy; there’s a ray of happiness just from being a puppy, but a belief nothing can be accomplished beyond what Amtrak deems possible simply because, well, Amtrak has said so.

One thing Amtrak has seldom done – and everyone who is not Amtrak routinely does – is plan for success.

It’s not a difficult concept or process, it merely requires a positive disposition and the ability to think like a rational business person.

If you are a true student of passenger rail, and you do your own research and draw conclusions with an open mind, then everything proposed in the last issue of Business and Politics is not only possible, but desirable. Most of the items related to improved customer/passenger service, where the needs of the current and potential passengers are forefront, as opposed to the needs of the company.

When passengers are happy, they return.

One gentleman correspondent pointed out that concept isn’t working very well for the airlines, so why should it be expected in passenger rail?

An excellent point. Let us digress for a moment.

In the early days of air travel, until the arrival of the airline known as People’s Express, air travel was considered an occasion for good customer service, dressing well for travel, and high expectations of comfort and reliability.

The, People’s Express arrived, bringing Greyhound-style service to an airport near you.

From that point on – whether by great coincidence due to changes in society or the opening of the floodgates – flying started to become more of a chore than a pleasure. From the last days of the venerable Eastern Air Lines with its surly cabin crews, to the constant downgrading of personal space as seats kept getting smaller and smaller and leg space pretty well completely disappeared, to the cattle calls of Southwest, airline travel simply deteriorated as a travel experience. Add the tender ministrations of the Transportation Security Administration when it checks every grandmother in a wheelchair to see if she’s a terrorist, and air travel is hardly bearable.

Which is why there is such a huge opportunity for passenger rail travel.

Despite the fact some passengers on Amtrak’s Northeast Corridor who are professional worry-warts fret constantly every passenger isn’t screened for terrorist devices (an always comical suggestion), passenger train travel has the ability to be very pleasant, from start to finished, especially when a well-prepared crew is aboard.

This is a major marketing and sales point that is a gift from the airlines to passenger trains, and not to be taken lightly.

The other obvious advantages of trains: walking around space, dining and lounge cars, easy handling of excess baggage, the ability to create multiple classes of service on each train, and, of course, the ability to serve cities and towns in the middle of town, not some far-off former corn field that has become an airport miles out of town, all make creating a pleasant and marketable experience for train operators.

The other trick in planning for success is planning for realistic marketing. Amtrak’s allocation of resources to marketing is so small, in many parts of the country where the company’s best performing trains serve, there is no marketing at all. Amtrak remains America’s best kept secret.

Planning for success includes planning for robust marketing and sales.

One Business and Politics reader brought up the question of Amtrak having multiple frequencies on each of its existing long distance routes. The huge advantages of this are obvious: the spreading of station costs across more frequencies, and more and better travel choices for passengers are just two.

But, Amtrak True Believers and the various WOLOs instantly point out at least a dozen bad reasons why this can’t be accomplished, from “no equipment available” to “the host railroads would never allow it.”

Both of those excuses are right up there with the standard Amtrak excuse, “the dog ate my homework.”

No equipment available? Find some to lease, or place an order with a car builder for leased equipment. That’s what the airlines do; why can’t Amtrak?

The host railroad won’t allow it? The law says they have to allow it; everything comes down to a matter of negotiation.

Why are Amtrak True Believers and WOLOs so very timid when it comes to Amtrak or passenger rail expansion? Everybody claims they want more trains to more places, but throw up their hands in despair when it comes to figuring out how to do it.

The corporate mind-set at Amtrak is to “maintain, and not do much more.” The past half a dozen Amtrak presidents have all talked about maintaining the long distance route networks, but rarely have talked about expanding that network. Why? The old chestnut about no money for expansion? Did anybody ask anybody about that? Did Amtrak management EVER go to Congress with an aggressive plan to expand the long distance system as we know it today, along with a financing plan and say, “Mr./Ms. Banker (Member of Congress), we have a plan for expansion which will benefit you and your state/district, and we’d like to discuss how to make this a reality.”

Here’s another example of the mind-set which has been created.

Here in Florida, debate has been going on for three gubernatorial administrations about restoring passenger train service to the Florida East Coast Railway route between Jacksonville and West Palm Beach. It’s the fastest, straightest route to Miami and the riches of Florida’s Gold Coast. Passenger service has been missing since the violent, bomb-infested strike of the early 1960s. Before the strike, the FEC hosted all of the Miami-bound Atlantic Coast Line streamliners including the East Coast Champion and the seasonal Florida Special, as well as the Havana Special (pre-Castro), and the Chicago/Midwest trains, the Dixieland, South Wind, City of Miami, and Royal Palm. This is a railroad which was principally built for passenger business, and entire cities all along the Florida coast were developed for the winter tourist trade.

The State of Florida has put up over $100 million to make this happen. Two levels of service are proposed; extending one of the existing Florida service trains over the route by splitting it in Jacksonville, and then intra-Florida service between Miami and Jacksonville.

The Florida Department of Transportation has taken a somewhat relaxed public view of all of this, and appears content to allow Amtrak to make a series of demands for this new service without objection. The FDOT seems to believe its only obligation to the taxpayers of Florida is to be a money conduit for state funds.

There seems to be very little interest in establishing this service independently, even though the FEC is a well-run, well-managed railroad, and could probably operate the service at a lower cost than what Amtrak will try and extort to start the service.

Never forget that in any given situation when it comes to corridor or regional service, Amtrak is ALWAYS the highest bidder to operate a service.

Here in Florida, nobody seems to be chatting with any of the members of the Association of Independent Passenger Rail Operators (AIPRO, www.passengerrail.org) to see if some sort of hybrid service can be put together, with a lower cost operator of intra-state service, and still being able to host an Amtrak long distance service. Why is this?

Planning for success is not difficult, and it’s a rational thing to do. It’s taken 40 years for the national mind-set to come to incorrectly believe only Amtrak is capable of running a passenger train in these several united states. How long is it going to take to wake everyone up and realize the potential opportunities are nearly endless?

Gil Carmichael, former FRA Administrator during the Bush I years, and former Chairman of the Amtrak Reform Council, as well as the Founding Chairman of the Board of Directors of the Intermodal Transportation Institute at the University of Denver has started a new series of reports, entitled the Gil Carmichael Report, Investing in Interstate 2.0. The reports are free, informative, and a must read for anyone serious about the future of railroads in the United States. Contact the report distributor at geoff@jdmandassociates.com for your very own copy.

J. Craig Thorpe, noted Amtrak and railroad illustrator is available for all railroads, railroad-related companies, and organizations for his dramatic illustrations on a custom basis. Mr. Thorpe’s impressive gallery of work and contacts for engagement may be viewed on his web site.

It’s crunch time, according to the PRIIA 2008 calendar. The Passenger Rail Investment and Improvement Act, passed by Congress and signed into law by President George W. Bush put a deadline on when individual states will have to start shouldering more of the burden of costs of state passenger rail services.

No one ever took this deadline seriously (as often happens with Amtrak), and when Republicans in the United States House of Representatives churned out a budget which finally reflected this reality, everyone panicked. Amtrak True Believers were pretty sure the sky was falling and the Earth was rushing up to meet it.

It turned into a financial windfall for dentists throughout the land because so many people were gnashing their teeth over this. Nobody could actually believe the day of reckoning was at hand; everyone thought the funds for Amtrak’s budget and state department of transportation budgets grew on trees which were well fertilized and bearing fruit endlessly.

Oops! Turns out money doesn’t grow on trees, especially in recessionary times when state budgets are stretched to the limit, and the federal budget only gets by through the liberal use of borrowed money.

As with so many other things in 2011, Congress backed down at the last minute and said that really, they were just kidding about the states having to pony up more money for state corridor trains. It’s okay, and Amtrak can once again be a spigot for all sorts of money.

The True Believers sighed a sigh of relief, and got back to more important things, like arguing over what color the upholstery of coach seats was on the 1959 Santa Fe Super Chief.

But, the smart folks at various state departments of transportation took note of this, and the best ones have girded their financial loins for this fight again, soon.

They are the ones who will have state trains which will survive and prosper; they are the ones who are looking at the various member of the Association of Independent Private Rail Operators (AIPRO; www.passengerrail.org) and wondering out loud, what a post-Amtrak world will be like.

After much of Amtrak’s critical senior operating and maintenance executives took the last train to Clarksville via a hugely ill-conceived management buyout offered by Amtrak President and Chief Executive Officer Joseph Boardman at the end of 2011, and the few remaining executives are trying to figure out how to run the railroad (Amtrak’s current Acting Vice President of Operations is the simultaneously current Chief Financial Officer), there is nervousness throughout the land about the overall viability of Amtrak through the harsh winter months of 2012.

While Mr. Boardman has made a lot of noises about everything continuing as usual, and even sent out an end of the year employee advisory saying overtime for union employees would continue (but, with a cap of $35,000 per individual for a year), more and more people are placing bets on how much longer Mr. Boardman will be running the company and what can be done by his successor to save Amtrak from itself.

As state departments of transportation begin to think beyond the many restrictions of running passenger trains as imposed by the continuing narrow thinking of Amtrak through the years, here are some concepts which are likely to come to light.

Stations

Post-Amtrak operators will create more station stops for corridor trains. The whole idea of these trains is to move people efficiently from one station to another, and when you impose radical limits – as Amtrak has – on the number of station stops on any one route, you limit patronage. Amtrak often allows for a single station stop in a large urban area of multiple millions of people, citing the false belief people will drive great distances in their personal vehicles (often, backtracking from their starting point to a train station) to catch a train.

We know there is a huge need for a new assortment of suburban station stops and small town station stops. The false claim passengers won’t ride a train because it stops too often is just a repeat of the junk science of the 1950s. People care more about trains departing and arriving on a convenient and predictable schedule at accessible locations than actual transit time.

These new stations and many existing stations will also suddenly be manned by real people, not machines incapable of providing customer service. A smile from a ticket agent and a politely answered inquiry goes much further than punching buttons and jabbing at an impersonal screen on a ticket vending contraption.

New stations will be driven by local governments anxious to cash in on the many pluses of passenger trains; stations will be built and maintained by local governments in the airport model instead of the old railroad model.

No longer will there be startups such as the new service in the Commonwealth of Virginia now under construction between downtown Norfolk and the Northeast Corridor. The new service will depart Norfolk, cross a major river, go through the densely populated city of Suffolk, and continue through a series of small towns until it reaches Petersburg, without a single station stop for nearly 80 miles. While the new service is helpful for denizens of Norfolk and Virginia Beach, it does nothing for the tens of thousands of citizens in Suffolk and along the way, which can only watch a passing trains the way cows in a field do. Towns along the way have fought to have station stops, but have rebuffed to be told perhaps sometime in the murky future intermediate station stops will be allowed. In effect, not only is this saying the residents of these areas are not important, but the potential business they bring is not important, too. This is too much like a government saying it would rather spend more money for train service than allow local citizens to provide their own stations and help pay the costs. Where is the efficiency here?

Length of consists

Post-Amtrak operators will plan train consists which can carry a decent number of passengers, not the mini-trains now operated by Amtrak. You need 300-400 passengers per train for it to pay its own way; carrying a dozen passengers 50 miles smacks of horrors of the pre-Staggers Act of 1980 mandates by the Interstate Commerce Commission that railroads must operate trains whether they make money or not.

The states will come to embrace the California model where the state figured out decades ago it couldn’t trust Amtrak to market any state supported trains, so the state took it upon itself to market the trains beyond Amtrak’s efforts. For years, the state has spent much, much less on advertising in-state passenger trains than it would paying higher rates to Amtrak to make up the difference between the cost of the trains and the revenue generated by ticket sales. This model has worked well in Virginia with the relatively new Lynchburg to the Northeast Corridor service, which in the entire time of its existence has yet to cost the commonwealth a penny in state support to Amtrak because passenger revenue has exceeded expectations from Day One.

At the beginning, refurbished equipment – gutted and rebuilt to current specs so the age of the equipment is effectively zero – will be chosen for service. There is a large pool of sturdy, mostly Budd-built equipment which can withstand many more decades of the rigors of passenger train service (See: VIA Rail Canada and its Budd fleet, all over a half a century old) while new equipment is built and put into service. The states, not Amtrak, will own and operate through contractors and maintain this equipment for their advantage.

Onboard services

Onboard services will again flourish, and the only consistent aspect will be the inconsistency between services as states decide how they wish to best present passenger train service. No more “one size fits all,” and no more automatic “no” to any new and innovative idea.

Corridor trains will all have at least two levels of service, if not three. A standard coach service will be available, and a business class service will be available. For those states really wishing to recapture as much of the passenger rail service as possible, an executive class service will also be available, with private rooms, small onboard conference rooms, and business amenities such as printers, copiers, and simple bindery services.

All seating, from coaches to first class services, will have a different look. No longer will there be long tubes sporting two-by-two seating. Coaches and other cars will be broken into sections for noise abatement and to instigate creative seating patterns. Those wishing for a solitary single seat will have one; those traveling in groups or as families will have seating clusters. The occasional table and refreshment centers will be scattered about, with passengers having access to hot and cold potable water as well as coffee and tea.

The first class services will have a single shower and changing area in those cars, allowing passengers traveling to business meetings to board a train casually and step off a train ready for negotiations.

Wi-fi and power outlets will be available for every seat in all levels of service.

Food service will instantly gravitate away from what is now essentially vending machine food served by a service attendant. The junk science of the 1950s will again be ignored, and full service dining cars, such as on the level of a Denny’s, will be offered, providing reliable meals at a reasonable, non-hostage price. The old canard about dining cars always losing money will be quickly banished, and between modern food service techniques for freshly prepared food and modern efficiencies of ordering and service, dining cars will again become rampant. Dining cars will be open from terminal to terminal; if passengers are on the train, they will have the ability to eat and drink.

Lounge cars will be radically different from the bland environments of today. True analysis of costs and passenger needs will redefine lounge car services, and, with a full service dining car open the entire length of the trip, the lounge car will cease to be a primary food source and revert to its original intent of being a place of quiet recreation and conversation, beverages, snacks, and convenient sundries and other items for purchase.

Good onboard services only come from well-trained and well-motived onboard services employees. Employees simultaneously handling several cars are incapable of providing meticulous service. More OBS employees will be needed to fully staff each train so each route can reach its full potential.

You can get there from here

Connectivity, creating a good route and city pair matrix in each corridor will be critical to overall success.

Currently, Amtrak often offers service in single directions, from some sort of hub, but is oblivious to service needs or potential ridership needs beyond defined areas such as state borders. We know travelers have no concerns for state borders; they are only invisible lines on a map.

The State of North Carolina recognizes this, and sponsors the Carolinian, a train which begins in Charlotte, North Carolina and finishes it daily run in New York City. North Carolina allows its citizens and visitors full access to other cities along the way, including stops in Virginia, Washington, Maryland, Delaware, Pennsylvania, and New Jersey before reaching the terminal in New York City.

The new thinking will go beyond this.

As an example, the Commonwealth of Virginia has three current state sponsored routes, with a fourth under construction.

The westernmost route follows the long distance route of the Crescent, with a second state sponsored train along part of that route originating in Lynchburg, and continuing north to Charlottesville, Culpeper, Manassas, Burke Centre, Alexandria, and Washington, and further north along the NEC to Boston.

The next route slices through the heart of the commonwealth, with a straight north/south run from Washington south to Alexandria, Quantico, Fredericksburg, Richmond, and Petersburg, then down to North Carolina. This is the route of the Silver Meteor, Silver Star, Carolinian, and Palmetto. The state sponsored part of the route is from Richmond to Washington.

The third route follows the same route to Richmond, then veers southeast to Williamsburg and Newport News, the terminal point for Hampton Roads and the greater Norfolk/Virginia Beach area.

The new fourth route will run north from downtown Norfolk on a more westerly route than the Newport News service, and connect to the rest of the Virginia route in Petersburg and continue up to Boston.

Here’s the problem: every one of these routes is essentially a north/south route, with no east/west connections. You can’t get from Newport News or will be able to get from Norfolk to Charlottesville or Lynchburg, both important cities in the commonwealth unless you ride an Amtrak Thruway bus connection from Richmond. It’s at least a two-seat, if not a three-seat ride, and schedules are not very well coordinated.

Managers intent on making passenger trains viable instead of taxpayer dependent will look at a map of the Old Dominion and discover the former C&O east/west main line between Doswell, Virginia – just north of Richmond – and Charlottesville. This is primarily a route which for many years has hosted long trains of empty coal cars. Yet, it connects with the other former C&O route which today hosts the tri-weekly Cardinal through Charlottesville, just north of the Charlottesville station which also serves the Crescent and Lynchburg servce. Scheduling trains from either Norfolk or Newport News to Richmond, Charlottesville, and Lynchburg, or beyond to Roanoke would open up tremendous connectivity opportunities for Virginia travelers which do not exist today. If you want an all-train route from Williamsburg to anywhere on the Cardinal route in West Virginia, unless you want the discomfort of the Thruway bus, you must travel all the way north to Washington to go back southwest to West Virginia.

A connection such as this would not only be a huge boost to the state sponsored trains, but also a great gift for connectivity for the six Amtrak long distance trains involved in these routes, too. Everybody wins, nobody loses in this scenario.

Many other corridors with state sponsored routes have such simple opportunities to greatly expand the potential of their routes, reestablish connectivity with Amtrak long distance trains, and provide popular travel options for passengers – which is really what all of this is about.

It’s good to have reservations

Amtrak’s current reservations system skews heavily towards coach travel; some people are not even aware many Amtrak trains offer business class or sleeping car services. Some live reservations agents act as if they are loathe to talk about anything other than coach seats.

This problem will be solved by contracting with professionally operated reservations services as the airlines and hotel chains do today. Everything can and should still interface with Amtrak’s reservations system, but each state will either want their own reservations system or be a part of a pool system with nearby states for maximum efficiency.

How much will all of this cost?

All of this will cost money, but, when you base the cost of ongoing service with a new, efficient operator versus the continuing cost of the consistently highest cost operator (Amtrak) then all of this becomes not only affordable, but in the long run healthy.

Remember, Amtrak accounting is based on losses per passenger. Forever we have heard the more passengers Amtrak carries, the more it loses. There is never any calculations made for efficiencies of volume or quantity – only higher losses because of higher ridership.

In the real world of AIPRO members, high volume efficiencies do count, and count a lot. Plus, none of the new services will have the crippling headquarters overhead Amtrak continually has as a boat anchor around its corporate neck, nor will any of these new operators be saddled with expenses of the NEC which somehow always seem to be spread throughout Amtrak instead of isolated where they belong.

In short, small and efficient operations, similar to those of short line railroad management will be put into effect, eliminating all of the corporate overhead waste which has been a part of Amtrak for decades. Before long, the new operators will have more frequent, longer and better trains, and at a lower cost.

Beyond just train service

Many other revenue generating opportunities will be present, as well. Each corridor will be a good candidate for onboard publications such as magazines and route guides, all which can be advertising based.

Seat-back video services can be offered on demand and as pay-ver-view for movies and games, and these same video screens can be used to promote dining and lounge car services as well as upgrades to first class services and other routes. Advertising can be sold to outside parties who will be happy to have captive audiences.

Reservations systems can offer services beyond train tickets; rental car, hotel reservations, even theatre and event tickets can all be offered on a single reservations system with commission fees flowing to the system owner.

Onboard sponsorships can provide revenues; how many coffee or tea makers would like to be known as the exclusive provider of their wares, as well as specialty desserts in the dining car and specialty drinks in the lounge car?

A properly motivated and fully staffed marketing department, beyond standard advertising media efforts, can stimulate group travel (Such as theatre group travel to shows in larger cities; this type of trip would be possible because of most likely increased frequencies by better operators.) or join with organizations such as credit unions to promote passenger rail travel through credit card deals or inhouse promotions for discounts.

The only restriction on other potential revenue related to corridor passenger train service is the restriction on one’s imagination and business savvy.

In the end

The Great Recession and its lingering effects are going to be positive catalysts for corridor passenger train travel because Amtrak’s inability to operate efficiently and in the best interests of its largest customers – state departments of transportation – will force the self-interest of the stewardship of state budgets to look beyond Amtrak to a much brighter future.

Gil Carmichael, former FRA Administrator during the Bush I years, and former Chairman of the Amtrak Reform Council, as well as the Founding Chairman of the Board of Directors of the Intermodal Transportation Institute at the University of Denver has started a new series of reports, entitled the Gil Carmichael Report, Investing in Interstate 2.0. The reports are free, informative, and a must read for anyone serious about the future of railroads in the United States. Contact the report distributor at geoff@jdmandassociates.com for your very own copy.

J. Craig Thorpe, noted Amtrak and railroad illustrator is available for all railroads, railroad-related companies, and organizations for his dramatic illustrations on a custom basis. Mr. Thorpe’s impressive gallery of work and contacts for engagement may be viewed on his web site, which is listed in the Links section.

If Amtrak is going to survive in any semblance of what it is today as a nominal national system, there must be a new president and chief executive officer at the earliest moment.

Current President and CEO Joseph Boardman appears to not only be spinning out of control, but rapidly losing the confidence of many Amtrak stakeholders.

Finding a replacement for Mr. Boardman at this point in the political process is going to be difficult for a number of reasons, mostly related to the timing of the upcoming presidential election.

The best solution is to find a distinguished railroader – similar to the late Amtrak president Graham Claytor – with the ability to arrive in Washington quickly, take control of a company nearly devoid of competent senior operation personnel because of the ill-planned senior management buyout program, and attract other outside talent willing to pitch in on an interim or permanent basis and under his guidance, save Amtrak.

The ideal man is already an important part of Amtrak: Jeffrey R. Moreland, a member of Amtrak’s Board of Directors.

Mr. Moreland, 67, is the retired Corporate Secretary and Executive Vice President of Government Affairs and Law of Burlington Northern Santa Fe Railway Company, and before that, was BNSF’s General Counsel and Chief of Staff. He currently serves as President of Western Fruit Express Company.

There is a long, distinguished railroad tradition of law department vice presidents assuming the top spot in the company. The same path was taken by Graham Claytor to the presidency of the Southern Railway and then retirement and next his service to Amtrak as its longest serving president from 1982 to 1993, what some would call Amtrak’s best period. Most of today’s Class I freight railroads have all been helmed by attorneys.

Mr. Moreland’s 14 years at BNSF – a railroad everyone considers to be Amtrak’s most cooperative host railroad – puts him head an shoulders above any other candidate which may be considered to replace Mr. Boardman, especially any candidate which may emerge from the transit world. Mr. Moreland also has a deep background in corporate finance through service with the Securities and Exchange Commission. If someone has to untangle Amtrak finances and at the same time keep train operations going, he’s the man.

It will take the real world railroad experience of someone like Mr. Moreland to grab the Amtrak tiger by the tail and attempt to whip it into shape so there will be an existing company for the stewardship of the next permanent president.

Certainly, Mr. Moreland has the advantage of the other members of the board knowing him well since he began his board service in 2010.

Mr. Moreland is an obvious choice to bring order to the Amtrak Chaos at Christmas.

This can’t be a good time to be an Amtrak employee; the cream of the crop – and, some people who really needed to be gone – either took the management buyout offer and have departed, or outright quit to make sure their reputation and careers stayed on track.

More than one source from a host of contacts are confirming President and Chief Executive Officer Joseph Boardman appears to be experiencing some sort of difficult time with outbreaks of flying off the handle verbally at any given moment, without provocation. His targets are non-discriminatory – employees are not the only recipients.

Mr. Boardman has had a lot to defend in the past weeks and months.

Earlier this year he made a statement to Congress that the biggest financial drain on the company is the long distance system. Many seized on this as evidence he wants to scuttle the long distance trains in favor of the Northeast Corridor and selected state corridor trains in a disjointed, non-national system.

This discussion simmered throughout the year, but heated up after several weeks into the management volunteer buyout program when most of the top level operating executives chose to take the buyout – particularly in critical safety-related positions – and there was a realization the people responsible for keeping the trains running were all abandoning the company simultaneously.

When this became public, a hue and cry emerged wanting to know what direction the company was taking and what type of strategic plan was being implemented.

As this drama has been unfolding, the reference to Amtrak’s “strategic plan” has been constant, but no recognizable strategic plan has been detected.

Which led to this Special Employee Advisory from Mr. Boardman the day after The Business and Politics of Passenger Rail ran a lengthy column about the buyout program and the questionable stability of Amtrak.

Special Employee Advisory

December 07, 2011

Message From Joe Boardman

Dear Co-workers,

I know that there is a feeling of uncertainty in the air for some of you, and that many of you have questions. I don’t have all the answers that many of you are seeking, but I want to tell you where the company is going — knowing what the plan is will at least help reduce some concerns that I have heard expressed.

As you know, our board of directors approved a Strategic Plan in October that sets a new course for our company. I recently asked you to read and become familiar with the Strategic Plan — I will ask you again to do so now — because it is in large part the basis upon which we are bringing change to Amtrak. As we follow it, our company will become stronger, more customer-focused, and more bottom-line business focused. Amtrak can no longer hunker down in survival mode, and we do not need to. We are a critical asset to this nation; we must serve

our nation and our customers well.

Before I get into the changes that I’m seeking, I want you to know that there are no planned or expected service reductions anywhere. Similarly, there are no planned layoffs for agreement-covered employees, other than the normal seasonal adjustments that we go through each year. Nothing different there.

As you know, I am seeking to align how we do business with our Strategic Plan. As I’ve communicated before, this realignment of the organization will result in a reduction in the number of non-agreement employees across all departments. We are not going to reduce any management forces during the coming holidays, other than those who have elected and have been approved for the recent Voluntary Separation Incentive Plan. A little more than 150 non-agreement-covered people have chosen to leave the company via the VSIP, several of them from the senior ranks of management. On behalf of the company, I am grateful for the contributions that they have made through the years. Many of those among the group were close to making a retirement decision, and this program provided the incentive they needed to make a positive affirmation that it was time. I saw many struggle with that choice, as so many have done in the past when it was time to enter into retirement.

Also, remember that when we released the Strategic Plan, I told you it was developed with significant employee input and that it is a living document — it’s not set in stone. A grand plan rolled out all at once does not allow for the creative ideas of those that are out there doing the work, or who have been asking questions for years and have nothing but frustrations left. So that’s part of why we don’t have all the answers that people are seeking yet.

So far, we have formally rolled out only one part of the Strategic Plan from a Business Line point of view — the Northeast Corridor Infrastructure and Investment Development Business Line managed by Stephen Gardner. Stephen Gardner and team he has assembled is hard at work to make our vision for very high-speed rail a reality and while doing so improving the infrastructure and its capacity in an incremental way. We must increase current Acela capacity, commuter access to NYC and advance the state of good repair of our entire NEC infrastructure with a collaborative cross-functional team of Mechanical, Engineering and Transportation effort that is goal-oriented and customer-focused. Stephen’s success will be our success, and he must not be alone in the effort.

As we look at Operations outside of the Northeast Corridor, we need to determine how we minimize costs that are not directly connected with the actual operation of safe, customer-focused and reliable service. Our operations outside of the NEC do not cover their basic operating costs, so the questions we need to ask are how can we do a better job to minimize costs, what can be done differently so that cost is lower without hurting the safety, customer service or reliability? Even more importantly, why are we still doing things in a way that does not take advantage of all the improvements available today? What should we stop doing?

We don’t have all those answers, and as I said earlier, no one grand plan is going to give those answers to us. But I do have some answers. We cannot expect a reliable, on-time, customer-focused railroad to operate if there is not dedicated accountability for that. So we will establish a structure that includes a senior-level person who will be held accountable for both cost and revenue, while meeting the standards and the budgets that are set by the Chief Engineer, Chief Mechanical Officer and Chief Transportation Officer. Each of them will report to the VP of Operations. Accordingly, I have asked the VP of Operations to submit his plan for aligning under this structure in early February, and I expect to have given him enough input along the way that it will begin to be implemented by mid to late summer. I expect it to provide fewer levels of management from the top to the bottom, and that will cause an impact to the number of non-agreement-covered positions.

Northeast Corridor Operations is another one of the Business Lines in the Strategic Plan. It will operate differently than the off-corridor structure. The details on that will not come until after the off-corridor structure is set, although once that is known it will help define the boundaries of the Northeast Corridor. So this is an area that will need to wait a while for answers.

There will be one centrally managed Legislative, Government, Policy and Public Affairs function, with a field presence that will keep major contact with our state partners and determines what, if any, planning needs to be done for a customer or state partner. This function has been split up among too many departments, with a lack of focus and accountability. Some of that change has begun with the dissolution of the Policy and Development department. We expect 10 to 15 positions will be eliminated with that change.

In addition, there will be three planning organizations in the company, and they will be relatively small. Facility Planning, which will be within Real Estate under the Chief Financial Officer, will become much more active in proper planning for our real estate assets including our stations. Operations Planning will be placed under the VP of Operations. Strategic Planning, which will be in the President and CEO’s office, and will monitor the Strategic Plan, make adjustments to the plan to keep it current, update the plan or help define course corrections early by paying attention to economic and other business trends to keep Amtrak on top of its game.

The Marketing and Product Development department will be less marketing and more sales. Social media will grow along with the use of other more up-to-date methods of improving our service to our customer. Field functions will be part of operations, part of Legislative, Government, Policy and Public Affairs, or will be a targeted sales function with sales goals or will not exist. The distribution function of the commissary will go to Operations but the Menu Development will stay with Marketing. The Call Centers will stay with Marketing, and Marketing will pick up accountability for selling our management services to commuter operations, as well as evaluating and responding to the solicitations for commuter contracts.

There are other changes that will occur as we respond to the requirements of this new direction. It’s often said that change is the only constant that we deal with. We see it in our families and we see it in the world around us.

Amtrak costs continue to climb with additional direct salaries and wages, and while some revenue from ridership is up, other revenue like federal operating assistance, is down and that is part of the reason we must make cuts and adjustments to improve our bottom line. But frankly, that is not the primary reason. We must operate a more competitive company and it must reflect the realities of the competitive environment today. We have global competitors coming into our backyard and convincing members of Congress, state and commuter officials and others that they can do a better job than Amtrak. We also are in competition for federal assistance across transportation modes — airlines through the Federal Aviation Administration; highways and the intercity buses through the Federal Highway Administration; transit, commuter rail and buses through the Federal Transit Administration. We also have to compete with the funding for U.S. DOT safety programs, which comes out of the same appropriation funding.

We are making these changes for a stronger future, and yet I know when it affects you directly that high-minded idea gets lost. That’s the tougher part of leading change. I’ve tried to mitigate some of this with the VSIP, giving us some room and also allowing those who have other opportunities to pursue them without hurting the company or the people. That won’t be enough, and the positions that have been vacated won’t be filled immediately and others will not be filled at all. When you see them posted and you qualify for them please apply, if your record is good and your skills are the ones that are needed, you will stand in a good position to be competitive.

Please be assured that the steps we are taking are designed to preserve and strengthen the important service we provide to our nation. I will keep you updated as we move forward, and thank you for taking the time to read this important message.

Sincerely,
Joe Boardman
President and CEO

Only comrades of the Amtrak Propaganda Ministry and the cadre of Amtrak True Believers didn’t go “Huh?” when they read Mr. Boardman’s employee communique. It’s entirely likely it caused more problems than it solved, and reports from inside Amtrak back up that notion.

A few days later, respected transportation journalist Don Phillips published an online story on the Trains Magazine newswire containing an interview with Mr. Boardman, with him saying no trains were in any danger of train-offs or discontinuances.

All of this was followed by the Friday (December 16, 2011) end-of-the-day additional Amtrak Special Employee Advisory from the Employee Communications department outlining senior management personnel changes.

This communique was featured in the immediate previous edition of The Business and Politics of Passenger Rail of late on December 16th.

So many senior and upper tier managers and senior managers have departed the company that new lines of reporting and responsibility had to be determined.

In was dubbed the “afternoon of the long knives,” again Don Phillips also outlined the many changes of the 16th.

One important change was the departure of Jeff Geary, Amtrak’s Vice President of Operations, incumbent in the position for just a matter of months. Reports claim Mr. Geary was forced out of his position because he had not moved quickly enough restructuring Amtrak train operations management, and had the audacity to request arrangements be made to temporarily fill some critical management positions now vacant because of buyout departures while the restructuring was accomplished in an orderly fashion.

As a result, Amtrak operations are now under the direction of – and, this is not a typo – Amtrak’s Chief Financial Officer. Yes, the guy in charge of locomotives, all rolling stock, equipment maintenance, engineering, and all train operations is the head bean counter.

On top of that, the gentleman now in charge of the Northeast Corridor is Stephen Gardner, the former Vice President of Policy and Development, and, prior to that, a Senate staffer on Capitol Hill.

Mr. Gardner now commands a troop strength of approximately 6,000 employees between Washington and Boston.

On the West Coast, there is apparent good news. At this point, unconfirmed reports place one of Amtrak’s very best managers as the man now in charge of Amtrak in California and points north. When this is confirmed, we will talk more about him – a man any railroad would be thankful to have as a senior manager.

We do not know who with what level of expertise will be running Chicago as we are less than a week away from the official start of Winter. An ill-run Chicago can cause tremendous problems throughout the entire Amtrak long distance system because so many routes radiate from Chicago, not to mention state supported trains in four states.

Here is what one passenger rail insider had to say about this mess laid at the feet of Mr. Boardman and where anyone should start to untie the knots of Amtrak operations.

“One of the easiest and least costly places he could start would be to take his own train operations seriously as a transportation system. This would involve a combination of trivial schedule adjustments (not even speeding trains up or reducing scheduled “recovery time”) and operating discipline in order to have many more trains actually connect with one another. To cite just a couple of obvious examples: Why does the northbound Texas Eagle in Chicago not connect to the westbound Empire Builder, or the eastbound Boston section of the Lake Shore Limited to the northbound Vermonter train at Springfield, Massachusetts?

“Another would be to stop his lying to the public and to Congress and restore the Sunset Limited between New Orleans and America’s Number One tourist destination, Orlando. This can and should be done with the next timetable change.

“Another change he could institute is to stop the insane regimentation in the dining cars, which exist to serve the needs and convenience of customers, not the staff. There is no reason diners need to operate like Soviet bureaucracies. Hours and services need to be opened up and relaxed, and the all but forgotten breakthrough success of the 24-hour dining car service experiment on the Sunset Limited, in 1999 rolled out to more trains.”

Mr. Boardman is not without partners in this mess. Others are looking to the board of directors as a whole under the chairmanship of Tom Carper of Illinois and wondering how much governance and oversight has been occurring. While the calls for Mr. Boardman’s earliest possible departure have been growing, the board’s collective role is coming into focus, too. A Washington Wag had this to say.

Indeed, the “cure” for Boardman’s departure may be worse than the disease. It comes back to sound governance from those nominally in charge of the company.

Having stuck by Boardman, having made him permanent CEO, having approved the Voluntary Separation plan, and having vetted Boardman’s vague “Strategic Plan” for cutting the company to prosperity, how can the Board suddenly now be “concerned” at the departures en masse. Do these people have no shame or an ounce of perspicuity?

People deep inside passenger rail are wondering if Mr. Boardman can hold on even to the end of January, just over a month away. If this was a private corporation with an effective board of directors and stockholders, onlookers would be focusing on the end of December, not the end of January.

If/when Mr. Boardman departs, who other than Mr. Moreland could replace him? The Chief Financial Officer is already the acting Vice President of Operations. Most of the other top people in the company are lightly disguised political appointees from the usual circle of Washington musical chairs who move from government organization to government organization depending on how the political winds are blowing. Some come from District of Columbia jobs, some from local transit agencies, some from Capitol Hill. None are railroaders.

As discussed before in this space, what about the White House? The presidential elections are marching closer and closer every day and this problem is no closer to being solved. Mr. Boardman came to the company by way of his seat on the Amtrak board of directors because of his background as head of the New York State Department of Transportation and as the Administrator of the Federal Railway Administration and a board seat as a result of that position. Is it possible for the board to get it right this time, and appoint the only one of its members who is truly a qualified railroader to run a railroad and not a political appointee? Especially a real railroader – from the West! – who is not enamored with the ongoing pampering of the Northeast Corridor at the expense of the national system.

If you were a qualified railroader without a current stake in the company, how interested would you be in taking over Amtrak permanently at this point? Someone has to stabilize the company and repopulate the critical operations and safety positions before any sane railroader would consider the job. If another transit executive wants the job, plan on business as usual. Amtrak desperately needs a railroader, not a politician.

As the late Austin Coates, founder of URPA in 1976 was fond of saying, “they might as well pull ’em over and park ’em” and the last guy out the door turn out the lights if someone close to perfect can’t be found to run Amtrak – and found soon.

Gil Carmichael, former FRA Administrator during the Bush I years, and former Chairman of the Amtrak Reform Council, as well as the Founding Chairman of the Board of Directors of the Intermodal Transportation Institute at the University of Denver has started a new series of reports, entitled the Gil Carmichael Report, Investing in Interstate 2.0. The reports are free, informative, and a must read for anyone serious about the future of railroads in the United States. Contact the report distributor at geoff@jdmandassociates.com for your very own copy.

J. Craig Thorpe, noted Amtrak and railroad illustrator is available for all railroads, railroad-related companies, and organizations for his dramatic illustrations on a custom basis. Mr. Thorpe’s impressive gallery of work and contacts for engagement may be viewed on his web site, which is listed below.

There is hardly anyone left.

Here’s today’s Amtrak Special Employee Advisory.

December 16 , 2011 Page 1 of 1

Operating Departments Management Changes

As some non-agreement-covered employees begin to leave the company as a result of taking advantage of the Voluntary Separation Incentive Plan (VSIP), Amtrak continues to align the organization with the Strategic Plan, and is taking steps to ensure continuity of operations.

Effective today, Chief Financial Officer DJ Stadtler will take on the role of Acting Vice President of Operations, while Controller Gordon Hutchinson carries out the day-to-day Finance duties of the Chief Financial Officer.

In the near future, Amtrak will be actively recruiting to fill the roles of Chief Transportation Officer, General Manager – West, and Central Division General Superintendent. Following that effort, a Vice President of Operations will also be recruited, following today’s departure of Jeff Geary.

Senior-level positions — those held by Vice President of Transportation Richard Phelps, General Manager -West Bill Duggan and GeneralSuperintendent Daryl Pesce — vacated as a result of the VSIP are not being immediately filled to enable a competitive job selection process.

I thank Jeff for his hard work and wish him the best in his future endeavors. In the midst of this transition, I want to assure all Amtrak employees that we are being thoughtful and thorough about the changes we’re making in the organization,” said President and CEO Joe Boardman. “We have very strong operating departments with talented railroaders. While a handful of specific positions may be temporarily vacant, Ihave full confidence that our employees will continue to lead and to help deliversafe and reliable service. Change can be distracting, but I know that you will remain focused on delivering the safe and professional service you deliver every day.”

Employees who previously reported to these positions will report directly to DJ Stadtler, as will the Chief Mechanical Officer and the Chief Engineer. In this role, DJ will also be working with managers to develop a structure that is aligned with the Strategic Plan. In the coming days and weeks, DJ will be communicating with employees in the operating departments to provide more information about his role.

Amtrak thanks all of the employees who are leaving the company for their contributions to the company. We wish them well as they start new chapters in their lives.

Okay, let’s review.

“… (T)aking steps to ensure continuity of operations.” That’s not exactly team building and confidence building stuff.

The Vice President of Operations – the Number Two guy in the company is gone.

The Vice President of Transportation – the Number Three guy in the company is gone.

General Manager – West – the guy who runs things on the West Coast is gone.

The Central Division General Superintendent – the guy who runs Chicago is gone.

Over 150 other front line and senior managers are gone, too.

The Chief Financial Officer – the money guy – is now temporarily running operations as Acting Vice President of Operations.

The Controller is now the acting Chief Financial Officer because the real Chief Financial Officer is temporarily the Acting Vice President of Operations.

The money guy is running the railroad, and he’s reporting to the guy who has spent the vast majority of his career as a public employee bureaucrat with no railroad operating experience – Amtrak President and CEO Joseph Boardman.

To review from the last issue of Business and Politics, here’s what a recently retired Fortune 50 Human Resources vice president, an expert at executive development and assessment had to say and Amtrak’s mismanaged Voluntary Separation Incentive Plan:

… Boardman is simply in over his head, the Dilbert “pointy-haired boss.” The Peter Principle. This source says what we are seeing is almost always what happens with untargeted buyout offers, because younger, high potential employees see not vacancies up the ladder but a sinking ship, with the buyout simply a bonus for being first into the lifeboat, so they leap at the offer, and older ones just being literally tired of the chaos, of the bad leadership, the bad results, of the hopelessness, of being affiliated with a losing team, so they jump at the offer, too.

What is left is the dregs and the unemployables.

Time and time again through this agonizing process of the past few weeks we have seen constant emphasis from Amtrak about how it is attempting to improve its personnel costs through elimination of management positions without a single union employee leaving the company. This is somewhat akin to the constant drumbeat out of Washington that it is necessary to tax “millionaires and billionaires” to balance the budget instead of raising taxes on the middle class.

You can’t balance the federal budget solely by taxing “millionaires and billionaires” (or even come close to it), and you can’t fix all of Amtrak’s problems by eliminating so many management positions without a carefully crafted plan of succession and restructuring in place BEFORE you being the buyout plan.

The ongoing theme for Amtrak for the rest of the year is going to be Chaos at Christmas, and everyone can play, from employees to passengers to host railroads and suppliers.

An incredible amount of human capital, institutional memory, and gained wisdom has walked out of the office door to a relaxing holiday season. Those that are left are probably going to wish they went, too.

The Business and Politics of Passenger Rail will have more on this next week.

Gil Carmichael, former FRA Administrator during the Bush I years, and former Chairman of the Amtrak Reform Council, as well as the Founding Chairman of the Board of Directors of the Intermodal Transportation Institute at the University of Denver has started a new series of reports, entitled the Gil Carmichael Report, Investing in Interstate 2.0. The reports are free, informative, and a must read for anyone serious about the future of railroads in the United States. Contact the report distributor at geoff@jdmandassociates.com for your very own copy.

J. Craig Thorpe, noted Amtrak and railroad illustrator is available for all railroads, railroad-related companies, and organizations for his dramatic illustrations on a custom basis. Mr. Thorpe’s impressive gallery of work and contacts for engagement may be viewed on his web site, which is listed below.