Amtrak must be redefined

Written by M. E. Singer
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M. E. Singer

Regarding Joe Boardman’s May 10 Opinion piece, the former CEO of Amtrak is railing against a situation he actually created. His actions left Amtrak in disrepair after eight years at the throttle.

Despite what Boardman said, the irrefutable facts clearly indicate the first attempt ever at shaking down states for funding passenger rail infrastructure (Kansas, Colorado, New Mexico) was designed and initiated on Boardman’s watch, with the support of the same Board of Directors and executive line of management who were in place when he made these decisions, as well as the other issues identified below.

In practice, Amtrak withered under the leadership of Boardman, with the best managers encouraged to take buyouts during multiple reorganizations that only depleted vital institutional knowledge. An unacceptable safety culture existed, as well as questionable labor relations and lack of meaningful give-and-take negotiations, and the diminishing of a once-visible, vibrant, engaged government and public relations group built-up by Graham Claytor and nurtured by David Gunn. We saw the lack of oversight of the CAF passenger car program (note: no lounges or coaches), deterioration of menus and dining services as reduced on the Silver Star, payroll defalcations (timecards, overtime), and the inability to professionally work with the Class I’s re: on-time performance, despite further schedule padding and excessive bonus payments from Amtrak.

This is the track record produced under Boardman’s regime, with the same Board of Directors providing the same level of questionable oversight under their stewardship. Indeed, they did actually work behind closed doors in secrecy to promote those agendas that were anathema to the public.

In reality, Boardman barely provided lip service to the long-distance routes, as evidenced by the lack of any pro formas to Congress to factually detail the number of passengers turned away, and loss of revenues, due to the lack of space on those trains; and to identify the need for more equipment to expand frequencies and to meet new route opportunities. It was on Boardman’s watch that no commuter lines ever paid the operating and infrastructure depreciation costs for their access to the Northeast Corridor (NEC).

This did not change until mandated by Congress in December 2015. The NEC continued to inappropriately benefit by twisting the legal interpretation of Generally Acceptable Accounting Principles (GAAP) that pretended the NEC was “profitable” by failing to deduct infrastructure costs from revenues; transferring most NEC infrastructure and overhead costs to the long distance and state-supported corridors.

As well, the state-supported corridors historically suffered under Boardman by the same stilted, one-sided approach to GAAP by creating the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), as the non-NEC states were required to pay 85% of full costs based upon Amtrak’s unique full-cost methodology, which disregarded acknowledging the basic economic approach to incremental costs. And where did those funds go? They were directed to further subsidize the NEC “black hole.”

Not since 2005 has Amtrak been led by a real railroader, David Gunn. We had high hopes for Wick Moorman; however, nobody can make meaningful inroads into a dysfunctional corporate culture on a 1.5-year tour of duty.

Amtrak’s Board cannot be allowed to deflect the facts of their stewardship: how they and their management team willingly served to promote the Board’s singularly focused commitment—to serve their political patrons of the Northeast–at the expense of the national system. What apparently puzzles Boardman is how quickly his inner circle turned their loyalty to the new CEO, Richard Anderson, continuing to focus on ensuring their own survival by placating a very conflicted Board.

To pretend this has not happened is against the interests of the public and illustrates how so obviously Amtrak must be redefined to serve those interests, as represented by a national system. In the end, what is critical to acknowledge is that given the vast amount of continuing infrastructure investment required for the NEC, the initial action to force those select states along the Southwest Chief route to pay tribute was abhorrently wrong. Now, that should be clearly acknowledged and corrected by federal grants and funds to maintain the national network.

M. E. Singer is an observer and commentator on the passenger rail industry, identifying shortfalls and growth opportunities. He is currently Principal at Marketing Rail Ltd. in Chicago, a consultancy to achieve passenger rail customer experience and product branding. Singer has prior corporate experience in turnaround operations management, marketing, and mergers and acquisitions in the health care field.


Categories: High Performance, Intercity, Passenger Tags: ,