As Amtrak, the National Railroad Passenger Corporation, approaches its golden anniversary in 2021, it is quite apparent that it has squandered opportunities to mature into a stable and useful transportation entity, given the plethora of internal issues that have historically crippled Amtrak operating under the federal umbrella as a state-owned enterprise. Adding to this position is the impact from a shortage of experienced senior management.
With the exception of the tenures of a few experienced CEOs, Amtrak’s leadership and its Board of Directors have fallen far short of establishing a viable corporate culture to comprehend and implement its national mission. Amtrak has also fallen far short of overcoming serious deficiencies in its safety culture. Compounding this deterioration in executive and senior management performance has been the repetitive compulsion of many Presidential Administrations to ignore Amtrak’s enabling legislation, which required the appointment of experienced, seasoned people to the Amtrak Board whose knowledge and skills could be directly applied to Amtrak. For example, the current President, Donald J. Trump, has selected two nominees who actually voted against funding Amtrak when they served in Congress.
At present, the Amtrak Board is not providing meaningful stewardship and oversight of the business to ensure accountability. There appears to be a determination to rid the organization of competent, experienced middle management through buyouts and layoffs. It has stuck with an accounting system lacking standards that ignore GAAP (Generally Accepted Accounting Principles) while shifting costs from the Northeast Corridor and it related corporate costs to the long-distance network, which results in inflation of PRIIA (Passenger Rail Investment & Improvement Act of 2008)-mandated full-cost allocations to state-supported and long-distance routes. Such lack of transparency creates an amusement park hall of mirrors for Congress.
With great anticipation and input by Amtrak, Congress created PRIIA, legislation that apparently few politicians have yet been able to comprehend and articulate as to how it was structured to subsidize the deficit-ridden Northeast Corridor by charging an inflated, unaudited allocation of full costs to state-supported routes.
The intent of this White Paper, downloadable at the link below, is to probe history to dissect why Amtrak usually chose the wrong track that has led it to the bumping post today, and offer recommendations for change.
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.