Amtrak in 2002 - news items

Visit Amtrak website

Visit Amtrak Reform Council website
(ARC ended its involvement in all
decisions with its Feb. 7 report to
Congress, so its website may vanish.)

Stanley Kubrik's once-legendary year, 2001, was almost over when a poorly funded, heavily burdened Amtrak Reform Council pre-judged the fate of Amtrak's efforts since 1997 to achieve fiscal self-sufficiency of its operations. On November 9, 2001, the eleven member council – unanimous in their support for improved passenger train services in the United States – split 6-5 about whether Amtrak could fulfill that for-profit mandate before December 31, 2002. Their official doubt, narrow as it was, triggered a 90-day interval for two factions to concurrently complete separate plans for Amtrak's future.
Amtrak Reform Council was assigned responsibilty by the 1997 statute for recommending to Congress a course which would put U.S. passenger trains on a sound financial basis.
Amtrak management was assigned responsibility by the same law for devising a liquidation plan; what to do with all of Amtrak's real estate, locomotives and train coaches. Within several weeks after ARC's November 9 declaration, Congress passed legislation which cancelled that liquidation planning requirement.
As the fateful year of 2002 began for Amtrak and passenger train advoactes, the KenRail news block began much increased coverage of Amtrak and ARC, as news erupted almost daily about the three decades of contention aimed at Amtrak nearing culmination. Following are the ...

...accumulated items in the news about Amtrak during 2002, as noted earlier on the KenRail home page. (Please note that links to articles may expire, leading to "not found" errors. If so, use your browser <= Back button to return here.)

Amtrak choices narrowed to three - On Friday, January 11, Amtrak Reform Council chose three of nine reorganizing options for the nation's passenger train company. It will make a final selection of one and recommend it by February 7, as required by a 1997 Act of Congress. The ARC website lacked any insights about those three options, but National Association of Railroad Passengers told Associated Press "The fundamental question is not which preferred method of reorganization you do. The real question is, 'What are we willing to pay for a passenger rail system.'" NARP also worries that splits in Amtrak real assets "bear a disturbing similarity to the early stages in the process which led to Britiain's current railway crisis."

Amtrak reform plans disclosed - Following its Friday, January 11 session, Amtrak Reform Council posted its three chosen reorganizing options for Amtrak, the nation's passenger train company. At the ARC website, click on the "pressroom" link at left to access the meeting news release, the three options now under consideration (in Microsoft Powerpoint format only), and an option suggested by Council member Wendell Cox, one of six members voting November 9 to declare Amtrak incapable of paying its own way.
GE's Jack Welch says - Interviewed on CNN's "Unusual Business" (aired Sunday, January 20), retired General Electric CEO Jack Welch commented about the Enron bankruptcy in general, warning that subjecting "asset" companies to the fluid conditions of free markets requires transformation of a company's practices and business outlook. In similar recognition of the business attitudes required of a company owning considerable real assets which generates slender margins, if any, NARP also worries that splits in Amtrak real assets "bear a disturbing similarity to the early stages in the process which led to Britiain's current railway crisis." Welch said Enron changed from a "coveralls" oriented business to a Wall Sttreet "suspenders" type of enterprise, operating in a more risk-taking manner.

Amtrak reform plans posted, lawsuit filed - Amtrak Reform Council on Jan. 11 chose three reorganizing options for Amtrak, the nation's passenger train company. ... On Jan. 22, a division of AFL-CIO filed suit in federal court, district for District of Columbia, alleging ARC overstepped its mandate from Congress and disregarded expert advice available from Dept. of Transportation.

Amtrak warns of October deadline - While many are focused on Feb. 7 and Amtrak Reform Council advice to Congress about how to deal with perennial Amtrak budget problems, CEO George Warrington said on Feb. 1 that Amtrak will be unable to continue its present nationwide system beyond September 30 at present funding levels. Last summer, Amtrak mortgaged its New York City station to raise enough cash to keep operating through last Sept. 30. DOT’s inspector general recommended last week that Amtrak not persist in mortgaging properties to meet day-by-day operating expenses. Amtrak will cut 1,000 jobs and many marketing efforts to reallocate funds needed to run its present train network until September 30; it employs more than 20,000 nationwide.

Amtrak Reform Council wants split - After 90 days of deliberation, triggered November 9 when ARC declared Amtrak incapable of self-sufficient revenues, the panel created in 1997 by Congress has recommended splitting operations from real estate and other assets. For an ARC executive summary, its press release and the full Final Restructuring Report (111 pages), visit the ARC website. Washington Post transportation writer Don Philips summarized the ARC recommendations in a February 7 article. Upon issuance of its Report, ARC has completed its assignment.

No split for Amtrak - "I would not look for division [of Amtrak]," Commerce committee chairman Senator Ernst Hollings told Reuters on Monday, Feb. 11. "The federal highway system is not divided." Four days prior, Amtrak Reform Council recommended splitting operations from real estate and other assets. Senator Hollings restates widespread doubts about any split, including National Assoc'n of RR Passengers seeing similarities to Britain's earlier venture in that policy direction with its now-troubled train systems. ARC ended its role upon issuing the report.

Amtrak splits senators - "I would not look for division [of Amtrak]," Commerce committee chairman Senator Ernst Hollings (D-SC) told Reuters on Monday, Feb. 11. "The federal highway system is not divided." ... Four days after Sen. Hollings spoke, Senator John McCain (R-Ariz.) introduced legislation to dismantle Amtrak, splitting into three entities which would become private companies within several years. ARC ended its role upon issuing its report on Feb. 7.

Amtrak funding discussed - On Wednesday, Feb. 27, testimony to the House Appropriations subcommittee on transportation by several rail experts, including Amtrak CEO George Warrington and DOT Inspector General Kenneth Mead, reaffirmed the impossibility of keeping all Amtrak trains operating at the current funding level of $521 million plus fare and express revenues, Associated Press reported.
FRA Adminstrator Allan Rutter told the subommittee that his agency is "neck deep" in evaluating the beset company, which operates 18 long distance trains and numerous 'corridor' trains. Amtrak's NorthEast Corridor is regarded as its only business able to fund operations from fare revenues.
AP quoted Mead, "Don't be fooled into thinking that (restructuring Amtrak) is going to solve the problem."
One day later, a Washington Post article quoted George Warrington lamenting, ""We've run out of tools in the toolbox to keep the service together."
In a separate interview, on Feb. 28 Norfolk Southern CEO David Goode told CNN/fn that he sees no prospect for passenger trains to operate profitably. Goode focused primarily on the railroad industry's freight business and avoided any detailed analysis of passenger trains or Amtrak, wishing aloud that freight trains could be longer than during the current economic doldrums.

Warrington puts New Jersey first - Amtrak CEO George Warrington has plans matched for New Jersey Transit, and he's going to head it after leaving Amtrak, where he struggled mightily during four years to allay criticisms that Amtrak squanders its monies and that Amtrak doesn't do enough to keep its long distance trains commodious. Warrington's departure removes from Amtrak the needed leader as it confronts, as a company, decisions perilous to its survival. His arrival at NJT virtually assures that much-needed reconstruction of subterranean access to New York City will proceed successfully. For an excellent news account about Warrington, Amtrak and the role of Congress by respected transporation writer Don Philips, see a Washington Post report from March 7.

NARP eager for Hollings bill - In its March 8 weekly "Hotline" summary of passenger train news, National Association of Railroad Passengers declared uncharacteristic enthusiasm for a bill just introduced in the Senate by Transportation committee chairman, Senator Hollings, of South Carolina. S-1991 would, NARP predicts, "restore a nationwide Amtrak to financial health, address capital backlogs on the Northeast Corridor, and allow for service growth, particularly on designated high-speed rail corridors." To view NARP's Hotline #233, click on the Hotline link (left side), after going to its website. For a list of Amtrak trains affected by plans for October 1 cutbacks, see this KenRail web page.

Amtrak doesn't gain at Senate hearing - In its weekly "Hotline" summary of passenger train news, National Assoc'n of Railroad Passengers reports that March 14 testimony in support for the Hollings bill, S-1991, the National Defense Rail Act, was not strong enough to generate a wave of new support. Major differences of perspective and consequent differences of opinion about a national network of passenger trains prevented a unifying set of views, judging by the comments NARP cited. The bill introduced earlier in March by Commerce committee chairman Senator Hollings will "attempt to create what we did for highways in the 1950's," he said. A contrary bill which would fragment Amtrak has been introduced by Senator McCain, of Arizona.
(Senator Hollings refers to the initiative by Republican president Dwight Eisenhower which spawned the Interstate highway network.)

Not so fast - Some boosters of passenger trains are awaiting freight railroad interest in running trains again. It could be a long wait, judging by these comments from Union Pacific and Burlington Northern Santa Fe spokespersons.
John Bromley, UP: "Passenger trains lose money, and we are not interested in doing that. And if the federal government subsidized the railroad and we were to run it, there would be lots of strings attached that we are very shy of getting involved with."
Steve Forsberg, BNSF: "We have no interest in getting back into the passenger train business at this time."
In other words, privatizing passenger trains not only would fragment ownership and operating continuity. It would also contradict the freight railroads, putting passengers at even greater disadvantage than with Amtrak sharing tracks with freight trains.

Visit Wisconsin DOT web page for high speed Midwest trains and related topics.

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