Watching Washington, November 2018: When a 1978 labor dispute hobbled Northwest Airlines, North Dakota Gov. Arthur A. Link ventured to Minneapolis with a request of Chief Executive Donald Nyrop. Would Northwest—the lone east-west airline serving the state in the pre-deregulation era—withdraw an objection to competitor North Central temporarily providing the service?
For an hour, the governor waited patiently in a conference room. Upon entry, Nyrop pointed to the governor, saying, “That’s my chair.” Following frosty introductions, Nyrop curtly denied the request.
Such was Northwest under Nyrop, quoted that he removed restroom stall doors so employees “don’t read newspapers on my time.” Executives were tutored that the cost of a light bulb equaled the profit margin of one passenger between Chicago and Minneapolis.
From this corporate culture—albeit years following Nyrop’s retirement—emerged Northwest, and later Delta, CEO Richard H. Anderson, who as Amtrak’s president since 2017 has instituted aggressive cost cutting, targeting long-distance and excursion trains, ticket discounts, private-car operators, and on-board prepared meals. These actions infuriate Amtrak labor organizations, employees and passengers.
Especially incensed is former Amtrak President Joseph H. Boardman, who accuses Anderson of intentionally sabotaging Amtrak’s long-distance passenger network in favor of Amtrak’s Northeast Corridor (NEC) linking Washington, D.C., with Boston.
Perplexingly, Anderson, age 63, Texas-born and son of an Atchison, Topeka & Santa Fe Railway clerk, persistently rejects interview requests, declining to reveal the origin of his strategy in light of his transportation background being entirely in airline management. Notably, the Amtrak president has no vote on the board of directors, chaired by NEC partisan Anthony R. Coscia.
Equally of note, former Amtrak President Charles “Wick” Moorman, previously Norfolk Southern’s CEO, supported Anderson’s hiring; former NS CEO David Goode was a member of Delta’s board while Anderson was Delta CEO; in 2012, when Anderson led Delta’s purchase of an NS-accessible oil refinery in Trainer, Del., Moorman and Anderson, who accepted the Amtrak job for a token salary, were chummy, and freight railroads generally view Amtrak as unwelcome on their tracks.
Backstory told, Amtrak is overripe for repair, and Anderson’s credentials accentuate expertise in mending broken business models. Amtrak must confront a reality that its subsidies are not unassailable entitlements. Trillion-dollar annual federal budget deficits, a national debt exceeding $21 trillion, and interest payments on federal debt threatening to crowd out funding for more urgent social programs such as Medicare and Social Security, require Congress make unprecedented discretionary spending cuts. Most states are similarly cash-strapped.
Such is the trial of Richard H. Anderson, who honed a tough-guy image as a Harris County, Tex., criminal prosecutor before embarking on an airline career that included labor negotiations at Northwest, where he developed an understanding of the Railway Labor Act, which governs airline and railroad labor relations.
Anderson was elevated to Northwest CEO in 2001; departed in 2004 to guide United Healthcare, and was tapped in 2007 to lead Delta Airlines, into which Northwest had merged. The St. Paul Pioneer-Press called Anderson “a skilled negotiator and problem solver, but also capable of snap judgments.”
Although billing himself a bridge-builder with organized labor—and there is evidence of that—Anderson sued Northwest’s employee-owned credit union for using the airline’s logos, seeking $6 million in royalty payments; eliminated 17,000 Northwest jobs; demanded more than $1 billion in concessions from Northwest unions, and, at Delta, said of a flight attendants’ campaign to unionize, “We’ve seen a lot of fear and smear messages. This is how the unions do business…It’s not a Christian way to behave.”
What hasn’t been heard from the suddenly media-shy Anderson are his intentions for other Amtrak lines of business following his unilaterally imposed service degradation on multiple long-distance trains, or whether he will support alternatives to the unsustainable status quo, such as private-sector operators for long-distance routes, and other public-private partnerships. Amtrak’s broken business model is not unlike that of legacy airlines such as Northwest and Delta, which failed financially in the face of more efficient lower-cost competition, but were mended in merger through Anderson’s tutelage.
A good start is communicating with Amtrak’s shareholders—the subsidy-providing public. If not, attention must be paid by Congress. A national interconnected rail passenger network is too valuable a public resource for its stewardship to be shielded from the disinfectant of sunlight.
Frank N. Wilner is author of six books, including Amtrak: Past, Present, Future; Understanding the Railway Labor Act; and Railroad Mergers: History, Analysis, Insight, all published by Simmons-Boardman Books. Wilner earned undergraduate and graduate degrees in economics and labor relations from Virginia Tech. He has been assistant vice president, policy, for the Association of American Railroads; a White House appointed chief of staff at the Surface Transportation Board; and director of public relations for the United Transportation Union. He is a past president of the Association of Transportation Law Professionals. Wilner drafted the railroad section of the Heritage Foundation’s Mandate for Leadership (Volumes I and II), which were policy blueprints for the two Reagan Administrations; and was a guest columnist for the Cato Institute’s Regulation magazine.