Thoughts from Amtrak Prez Gunn

reggierail Jun 6, 2002

  1. reggierail

    reggierail E-Mail Bounces

    80
    0
    19
    WASHINGTON (Reuters) - Amtrak's President, David Gunn, warns the
    financially ailing U.S. passenger rail service will have to shut down next
    month unless it gets a $200 million loan in the next three weeks, the
    Washington Post reported Thursday.
    "If we can't borrow $200 million, we can't make it through this fiscal
    year," Gunn said. "We must have a loan in place by the end of this month."
    Gunn was quoted as saying that any shutdown would involve the whole
    system -- not just the long-distance trains but "all of them."
    Gunn said in an interview he was optimistic that he could negotiate a
    short-term loan, using as collateral $200 million from the expected federal
    appropriation at the beginning of the fiscal year Oct. 1.
    The United States' only city-to-city passenger rail service operator,
    Amtrak, is awash in debt and lost $1.1 billion in 2001.
    Gunn also said he plans to propose a massive reorganization of Amtrak
    management to the Amtrak board of directors on Thursday, the Post reported.
    Gunn told the paper his new organizational plan will eliminate
    separate business units set up in Philadelphia to run the Northeast
    Corridor, in Chicago to run long-distance trains, and in Oakland, Calif.,
    to run service on the West Coast.
    He added that he would propose reducing the number of "vice president"
    titles in the company from 84 to about 20.

    __________________________________________________________
     
  2. reggierail

    reggierail E-Mail Bounces

    80
    0
    19
    Hopeful rumor from a reliable source!

    The word is that Gunn is looking to cancel the leases for all those empty
    freight cars and is telling the sales and marketing people that they are in
    the PASSENGER business--not the FREIGHT business.
    :eek: [​IMG]
     
  3. reggierail

    reggierail E-Mail Bounces

    80
    0
    19
    A message from Amtrak President and CEO David L. Gunn

    Dear Amtrak Co-workers:

    The purpose of this letter is to bring you up to date on a serious financial
    problem that we face. In order to operate through the remainder of the fiscal
    year ending Sept. 30, 2002, Amtrak must borrow over $200 million, the cash shortfall
    between our revenue (including subsidies) and expenses.

    Whatever we borrow this fiscal year will be repaid out of next year's subsidy,
    assuming we get the $1.2 billion we requested for next year--$200 million will
    go to repay our loan for 2002. You should know that as of today that $1.2 billion
    has the support of 150 House and 35 Senate members--so progress is being made.

    The supplemental appropriation of $55 million, of which you may have heard,
    is not directly related to this problem. This money is primarily for the repair
    of wrecked and damaged cars.

    Securing a bank loan before month's end for the remainder of fiscal year 2002
    is a necessity. We are working on the problem. As of today, we have not arranged
    financing.

    I also spoke to you recently of an effective management structure. This week,
    we will begin the move back to a traditional railroad structure, which should
    be in place early in the next fiscal year. We will have an operating department,
    a mechanical department, an engineering department, etc.

    One last thought. Guests may be called passengers.

    I will keep you posted.
     
  4. reggierail

    reggierail E-Mail Bounces

    80
    0
    19
    Looks like Prez Gunn is kickin butt & takin names. Sure is refreshing after GW. The part about shutting down the whole system & not just the LD trains ought to get someones attention too.

    Reggie :eek:
     
  5. cthippo

    cthippo TrainBoard Member

    443
    0
    18
    So much for sulf suffiency by 2002 or else.

    As much as I am loath to predict the end of Amtrak and with it most passenger rail service in this country, sooner or later we are going to have to realize that Amtrak will never turn a profit. The only question that remains is whether it's worth the millions of dollars that it costs to operate the system. I think most of the members of the board will agree with me in saying "Yes, it is"

    Assuming that we can agree on that point, the next step is to ask what structure this enterprise should take. The public corporation model that has been in use since 1971 has not worked. By taking somthing that is inherently unprofitable and trying to run it like a business, Amtrak has only run it into the ground. One option I see is for the government to take control of it and contract with a company to operate it, similar to how many government facilities are run. Under this model the operating company would have to compete to retain the contract on a periodic basis, generally every 5 years. The government would use a variety of methode to track performance of the operation and would be able to change providers if the situation warrented.
     
  6. friscobob

    friscobob Staff Member

    10,534
    707
    129
    Am I the only one thinking that George Warrington was hiding behind a load of feel-good business doublespeak? If this were funny, I'd compare him to the pointy-headed boss in the comic strip "Dilbert".

    And why does Amtrak need 86 vice presidents?
     
  7. reggierail

    reggierail E-Mail Bounces

    80
    0
    19
    McCain Pledges Help in Averting Amtrak Shutdown

    By Don Phillips
    Washington Post Staff Writer
    Friday, June 7, 2002; Page A15
    Sen. John McCain (R-Ariz.), Amtrak's most persistent critic on Capitol Hill, yesterday praised Amtrak President David L. Gunn's candor about the way Amtrak has been run and said he would ask for a Senate committee hearing on how to avert a shutdown of passenger train service.

    McCain wrote in a letter to Gunn that he still believes most of Amtrak's routes are run only for political purposes and should be abandoned. But a shutdown of the Northeast Corridor, California routes and some others could be "highly disruptive," he wrote.

    Gunn said Wednesday that unless Amtrak gets a $200 million bank loan within three weeks, it will have to shut down in July.
    He also said he is reorganizing Amtrak's management and establishing a policy of total openness on Amtrak finances, to be delivered in a detailed monthly report.

    "I found your recent letter to me regarding Amtrak's condition and how the company has been managed in recent years surprisingly refreshing," McCain wrote.

    He was replying to a letter from Gunn, who has been in the job about three weeks, in which Gunn said that Congress should have never required Amtrak to be "operationally self-sufficient" and that the former management should not have held to the "fiction" that such a thing was possible.

    "I applaud your decision . . . to initiate a new policy of openness concerning Amtrak's finances," McCain wrote. "One of the many criticisms leveled at Amtrak has been its reluctance to release basic information about its financial condition and operating performance -- even to Congress and the federal entities charged with overseeing Amtrak's performance."

    Gunn presented to the Amtrak board yesterday a massive reorganization that would concentrate management decisions in headquarters in a "traditional" railroad management structure. The number of vice presidential slots would be cut from 84 to about 20.

    McCain, ranking Republican of the Senate Committee on Commerce, Science and Transportation, said he will request a committee hearing to consider "what must be done to avoid a shutdown of the entire Amtrak system in July."

    His letter could help Amtrak secure a $200 million loan. Banks generally need evidence of strong congressional support before they will lend money against a future appropriation.

    Other support is coming in. Gunn, in a message to employees, said that so far 150 House members and 35 senators have committed to a $1.2 billion fiscal 2003 appropriation for Amtrak.
    The United Transportation Union, which represents thousands of Amtrak employees, began a campaign asking its members to urge lawmakers to take rapid action on the appropriation.

    Amtrak received encouraging news yesterday from Federal Railroad Administrator Alan Rutter, who said in a letter that his agency has found no indication that Amtrak's layoffs in the last several months resulted in any deterioration in safety. Rutter noted that a special safety watch will continue in cooperation with Amtrak.

    © 2002 The Washington Post Company

    This has got to be a dream. The anti-Amtrak spokesman easing up a bit?

    Reggie [​IMG] [​IMG] [​IMG]
     

Share This Page