service. Classic Railroad Scenes: Railroads at Work. Most of them dont even seem to understand fundamental accounting principles. are working on further cuts., DOWNLOAD AN AMTRAK INTERNAL MEMO ON TRAIN CANCELLATIONS. Put a sock in it! That pair of single-track tunnels poses one of the greatest threats to Amtraks service and to transit in the metropolitan area and throughout the Northeast. He retired as Delta's CEO effective May 2, 2016, and was executive chairman of the Delta Air Lines board of directors for an additional five months. Flynn succeeds Richard Anderson, who joined Amtrak as CEO in July 2017. Mr. Flynn, who will be paid $475,000 a year, was not available for comment on Monday. Effective April 1, 2022. The resulting process has 60,000 allocation rules, with 1,600 responsibility centers grouped into nine similar cost families (for example, transportation operations), which are divided into 36 subfamilies (onboard service), and finally 44 subcategories (linen). One of his best-known roles was his portrayal of Oscar Goldman, the boss of Steve Austin and Jaime Sommers (Lindsay Wagner) in both The Six Million Dollar Man and The Bionic Woman television series between 1974 and 1978 and their subsequent . Transit Briefs: BART, DART, LACMTA, NYMTA, SEPTA, USDOT: An Additional $24MM for RIA Program Projects, Transit Briefs: NYMTA, MARTA, Amtrak, Keolis, RTD, An Inside Look at the People Who Make GO Trains Look Good, Young Professionals Conference: Fast Tracking Your Career, FRA Safety Advisory: Train Length a Critical Factor, CARB Passes New In-Use Locomotive Regulation, CN, UP, GMXT Launching Falcon Premium (Updated April 26 with UP STB Service Metrics), Class I Briefs: BNSF, CN, CPKC, CSX, CPKC/NS/UP. His earlier cash burn reference also implied that this was the case, a contention that has been repeatedly challenged by the Rail Passengers Association and elected officials along those routes. Working without a salary or an annual bonushe probably doesn't need the money, having left Delta with $72 million in company stockAnderson is determined to move Amtrak toward. We appreciate your support as we work our way through this crisis together., Amtrak confirmed that it has taken aggressive measures.". Why Sign In? Trains News Wire was provided with a recording of the meeting. Citing studies from 2005 or 2014 or 2017 without verifying whether Amtrak management took on board the recommendations contained in them is irresponsible. On a Friday, March 20, when hundreds of thousands of workers Mr. Sanchez, is Stephen Gardner the only person in the whole wide U.S. capable of being Amtraks President? A comparison of the relative ridership drops (NEC vs. LD Amtrak trains) doesnt make strong case for the NEC business focus of Amtrak. Under CEO Mr Richard Anderson, the former Delta and Northwest airlines chief executive, who was . Related CEO Stephen Ross is a major Trump donor, and along with Trump son-in-law Jared Kushner, according to Vanity Fair magazine, is a significant user of a controversial federal program (EB-5) granting foreign nationals permanent visas in exchange for substantial equity investments at low interest rates. Trains asked Amtrak to itemize the costs allocated to the Southwest Chief over and above running the train, paying the crew, and paying BNSF on-time performance incentives that cause it to lose almost $55 million. That deluge accelerated their deterioration, leading to more urgent demands from Amtrak officials for federal funding of a new pair of tunnels. The multivolume blueprint of the systems methodology uses the term professional judgment to describe how rules were jointly developed by Volpe and Amtrak financial analysts to distribute company overhead expense. Johnson is not an accountant. NJ Transit and New Yorks Metropolitan Transportation Authority are seeking bailout funds. The key is whether the mistakes materially affect the companys financial statements and cost allocation outcomes. And given the amount of cash burn we have, Im certain the long-distance network is going to be very different longer term. Daily ridership is down 90% systemwide while future bookings are down 85% year-over-year, according to Amtrak. during his three-year tenure at Amtrak, such as reducing food service and Executive Vice President, Capital Delivery. Passengers can no longer be able to make changes or cancel tickets 24 hours after purchase as they can now for the lowest-cost Saver fares. The company also imposed new restrictions on changing some higher priced tickets. His first day on the job was the third day of what Mr. Cuomo had warned could be a summer of hell because of the disruptive emergency track repairs Amtrak undertook. Rail Group News offers news and analysis from Railway Age, IRJ and RT&S by email. And without that access, he as well as everyone outside of the organization, with the exception of the auditors and regulators, is just guessing. Protect the workers and press on with needed projects. A negative response could well upset the no-furlough objective. Flynn, 66, has been a successful leader across multiple modes of transportation, including rail, maritime and aviation. Anyone can read what you share. Amtrak Joey and Mayor Pete need to read this. It would hurt the individuals that bought them, but the big losers would be all the foreign governments that bought that debt, theyd fight tooth and nail to get us to keep payingwhich is when you through the ultimatum at them. When the Southwest Chief rumbles across New Mexicos Raton Pass, with sleeping-car passengers paying as much as $1,058 to ride in a roomette, what is the trains revenue-versus-cost effect on Amtraks bottom line? network operating, and if we dont have the subsidy from the Northeast Corridor For example, Amtrak claims that the percentage of costs allocations has decreased from 80 percent to less than 50 percent. Such bonuses may reach to the top of management. Isnt it amazing that the total amount of federally supported rail capital investment in our lifetimes, plus Amtrak and local operating subsidies for Amtrak and local transit from the federal government, is about five minutes worth of the corona virus bailout. us out of business, to Presidents who dont want to fund us, to Congress that One way to reduce costs is to eliminate all customer costs: advertising, salesmen, support, service, Since Amtrak has no incentives to increase sales that is what will happen. has taken more than $2.5 billion of federal money to keep the long-distance Trains asked to see the bonus criteria as part of its request, but Amtrak had not responded by press time. Amtrak is also suspending its 401(k) matching contribution for management employees through the end of the calendar year. Mr. Anderson said he believed that Amtrak is now seen by its customers and elected officials as a trusted agency that invests wisely and operates at a high level of customer service.. those riders, only 3% actually rode end-to-end. The two men, each of whom took no salary, shared the chief executive title during a transition that lasted several months as Mr. Anderson learned the railroad business. We should be very afraid of what is about to happen if Amtrak Joe spends all this money he has appropriated to improve Amtrak. Amtrak was founded in 1970 and its current CEO is Richard Anderson. Yet rather than follow the business school playbook of lopping jobs as if workers are disposable office supplies, Amtrak President Richard H. Anderson is ministering to his workforce, treating workers as family by making an extraordinary effort to protect their income stream and healthcare benefits. Among the challenges Amtraks chief executive has to navigate is that other railroads are the biggest users of Amtraks infrastructure in and around New York. Amtrak owns Pennsylvania Station in Manhattan and the tunnels connected to it that cross under the Hudson River. has COVID-19. But I guess thats the government way. This virus is just too convenient for them to carry out the slash and burn of the national network that some have been trying for 40+ years. Both Amtrak and the airlines are on the verge of a possible total shutdown and the only question is what routes will be re-established. Senator Chuck Schumer, a Democrat from New York who has pressed for federal funding for Amtrak and Gateway,. On behalf of the entire Board, we thank you for everything you do for the company. Amtraks accounting systems probably perform millions of transactions every week. Built in the early years of the 20th century, the tunnels had already exceeded their expected life span when Hurricane Sandy flooded them with salt water in 2012. 4.5 million on 15 long-distance trainsless than 15% of total ridership. BNSF reopens track at site of Wisconsin derailment (updated), Unifor ratifies contract with Canadian National, Driver of truck in accident that killed NS conductor pleads not guilty, Two Metra lines disrupted as Amtrak locomotive derails at Chicago Union Station. Don't miss this look at the history of America's most influential builder of locomotives. Mr. Anderson said that Mr. Flynn had sentimental ties to railroading, given that his father had been an engineer and some other members of his family had worked in the industry. Mayor Petes problem is who he works for. specifically what the root cause of the problem was at the time, [and] the Amtrak is not a government agency, but it isnt a private corporation either. . Unlimited Members, sign in to enjoy sitewide access. Get updates and special offers via email from Trains.com brands! If the Chief is discontinued, the non-direct corporate overhead assigned to it will be redistributed to other services, increasing the costs for state-operated trains and forcing more expense on long-distance ledgers. In business 101, one learns that no business can cut its way to profitability. of future federal or state bridge loans or grants, and no timeline on the end Few railroad passenger vehicles have had as long a lifespan as the Budd Rail Diesel Car. Classic Railroad Scenes: Railroads at Work. That would be Richard Anderson. Who is this person? ANDREW Another possible outcome is that the stimulous (money that the government will print if it doesnt first run out of ink) would include a rider to maintain all current routes. Mr. Anderson, a former chief executive of Delta Air Lines, has been Amtraks chief executive since 2017, a memorably difficult year at Penn Station. Amtrak will spend the funds required to keep the existing 1873-vintage tunnels functional, but put engineering for their replacements on hold. As America increasingly is sheltering in place, losing unprecedented numbers of jobs and retirement savings, fearful of COVID-19, and facing a stress level unfamiliar except to those who have endured war zones, Amtrak and its workforce face only unpleasant choices if the railroad and their jobs are to . You ought to be ashamed of yourself. Check out the documents. Get great snapshots of railroading history in Art Petersons newest book. There are plenty of others motivated by what Mr. Shigley above describes. So, CURTIS, you can forget about your sensible position. In 2017, Amtrak sharply curtailed the amount of information publicly disclosed in its Monthly Performance Report (from 66 pages in August to 7 pages in September). Yet Amtrak has been designated by the Department of Homeland Richard Anderson is now a railroad guy. Now with the outbreak, Anderson said, full year revenues are projected to be down $1 billion and the company projects a $840 million loss even with expense reductions of $110-$150 million. Our Standards: The Thomson Reuters Trust Principles. All of it! Amtrak service is vital to millions of Americans across the nation and by improving the customer experience, driving safety, and strengthening our partnership with states and other stakeholders, we can do much more for the American people, Flynn said in a statement. Executive Vice President, Strategy, Planning & Accessibility. ), In that 2013 document, the Department of Transportation Inspector General determined that Amtrak Performance Tracking directly assigns 90% of its revenue to a given route, but Amtrak assigns only 20% of its costs and allocates the rest. A 2016 report by the Government Accountability Office states, Indirectly allocating a high percentage of costs, rather than directly assigning costs, increases the risk that revenues and expenses for a cost center or line of business will be misstated.. WASHINGTON Although incoming Amtrak CEO Richard Anderson made a name for himself in the airline industry, he comes from a railroad family. The company estimates those expenses at more than $1 billion for all long-distance trains, and $793.6 million for Northeast Corridor Acela Express and Regional trains running over multitrack, electrified infrastructure maintained to 125-to-160-mph standards. Hirst and Anderson left Continental for Northwest Airlines in 1990, with the latter serving as a deputy general counsel for the airline. But that will be only a worst-case scenario because we dont want to furlough employees.. Emotions run strong when the long-distance network is I dont think any Washington bureaucrat has guts to to tackle this accounting sham. Is there really anyone who knows whats going on? "Amtrak and our state partners estimate we need approximately $1billion in supplemental funding through the remainder of the year to make up for the unprecedented loss of ridership and revenue and to minimize employee and service impacts," an Amtrak spokesperson said in a statement. But be warned: exactly how Amtrak attributes expenses continues to be shrouded in mystery. In the end, a company is only as good as its people. mirror the 64% reduction in ridership that is expected to decline further. So whatever amount the company decides to spend, the Chief and other routes are charged a portion based on performance tracking formulas, not whether the resources were deployed to actually benefit the services. end right now.. DOT Inspector Generals report. Seize the window of opportunity caused by reduced traffic. Most accountants and managers learn the problems associated with managing using allocated costs; Amtrak (and Volpe) has evidently learned nothing. it is interesting to note that an outgoing executive officer with less than a month of time left in his currentposition is stating policies which could affect the organization for a year or more in the future. Actor: Paths of Glory. some 40% of the seat capacity will be pulled from consists, he said, which will The expense burden has become Amtraks justification for systemwide cost cutting. This, of course, aids the claim that those trains are profitable above the rail.. Too bad he didn't have a "Save Amtrak, Fire Anderson" baseball cap with him. The emphasis on belt tightening is a response to the Amtrak Performance Tracking methodology, which in turn governs how much states pay to tap Amtrak resources to run trains. [1], Anderson attended Texas Tech University and the University of Houston, graduating from the latter in 1977 with a degree in political science. Its Northeast Corridor service is running about 40% of normal weekday schedules, including Northeast Regional and Acela services. It would also make a concerted effort to assign costs to the revenue-producing entities that incurred them. According to the route level results of the fiscal 2017 performance report, the Chicago-Los Angeles train generated $49.9 million in revenue but racked up $104 million of so-called operating expenses. The Department of Transportation administers the RRIF program. Speculation is that the co-signing with Related is an attempt to reverse Trump Administration opposition to Gateway. In 2015, he received compensation of more than $17.5 million. It has led to sharply reduced food service on the Lake Shore Limited, Capitol Limited, and Silver Star; curtailed excursions and carriage of private cars; eliminated revenue-growth initiatives, other than ticketing penalty fees and periodic internet-based fare sales; and threatened the Chiefs future. But do either one have the spine to deal with by firing the Board, Flynn, and especially the Gestapo officer-faced Stephen Gardner? to lead an enterprise in severe peril, Andersons background is prototypical. [1], Anderson entered the aviation industry after accepting a legal position at Continental Airlines and served as the airline's representative during the investigation of Continental Airlines Flight 1713 in 1987. Controlling costs is important to every organization, and Amtrak has periodically reshuffled personnel and organization charts to make the company more efficient since its inception in 1971. the end point of the coronavirus is.. Andrew & Jeffrey Hopefully they wouldnt be that STUPID to pull a stunt like that to use this as an opportunity to cut/eliminate the LD routes being as next fiscal years budget has not been finalized thereby incurring the wrath of Congress members whose districts would be impacted. Call it his Sully moment, after US Airways pilot Chesley Sullenberger, whose 2009 Miracle on the Hudson saved 155 souls on board his crippled A320 aircraft. and state [supported corridor] trains bearing their share of the national SEPTA is taking its own difficult short-term measures including a cut to executive pay, eliminating overtime, and a hiring freeze, while it also considers further service reductions. We have a strong foundation to build upon because you built it. a lame-duckpresident (mr. anderson) should not state policy; that is the job of new president, mr. flynn. Flynn, who has been with Atlas Air Worldwide Holdings AAWW.O, for 13 years, has also held senior roles with CSX Transportation, Sea-Land Services, Inc, and GeoLogistics Corp. Amtrak said Monday it is on pace this year to achieve operational break-even for the first time in the companys 49-year history eve as it invests billions in new high-speed Acela trains and other capital assets. Wilner is a past president of the Association of Transportation Law Professionals. He remained with Amtrak through the end of the year as a senior advisor to his replacement, William J. Sign-up for email today! [1] Anderson, who had never considered a career in the aviation industry, accepted the position at the urging of Ben Hirst, a neighbor who worked at Continental as a legal counsel.[2]. In part, this was because in striving to achieve a glide path to self-sufficiency, as then-President George Warrington promised, its reporting systems lost track of expenses and the money coming in to pay them. So are these new corridors Amtrak is touting the new food source for the NEC beast? Charges ranged from $400,000 to $900,000 for moving different long-distance trains from New Yorks Penn Station to Sunnyside Yard in Queens. governments, healthcare experts and common sense to stay home. Through February in the 2020 fiscal year that began in October 2019, Anderson reported that Amtrak was running 91% above plan. Trains News Wire confirmed that in February, the long distance, state-supported, and Northeast Corridor categories all showed sharp increases, with overall ridership and revenue both up an average of 6.5% compared with February 2019. I have read the documents several times. Until the past few weeks, there was a consensus that the federals would refrain from bailing out under-funded state and local pension funds. The undeniable and exacting reality facing Amtrak now and into the foreseeable future is the horrendous unsustainable that songwriter Steve Goodman popularized with his 1971 City of New Orleans lyrics15 cars and 15 restless riders, three conductors and 25 sacks of mail. For Amtrak today, the riders on many trains are fewer, and forget the mail. Last week, the company reported an operating revenue of $3.3 billion for fiscal year 2019 a 3.6% increase over the last year. This article should cause disgrace to suffocate those in charge of AMTRAK. In addition to a suspension of the 401K match, reduction to management pay, and its incoming CEOs deferring his salary, Amtrak is ending all non-safety-critical hiring; cutting discretionary travel, professional fees, and advertising spending; and deferring non-priority capital expenses," according to the companys statement. J. Flynn, who was hired at $475,000 annually, but told Anderson March 20 he, But several years ago, the company began paying bonuses to managers who meet financial goals, largely based on trimming expenses. The question remains how much of that overhead are we going to take responsibility for when we have no input. She had just spent two days in Washington, D.C., with mediation trying to figure out how we are going to get to the point where the states are assuming an appropriate amount of cost.. Anyone interested in learning how Amtrak calculates route performance, as well as the financial performance of long-distance trains, can find information in How Does Amtrak Calculate Route Financial Performance? Though he is set to shift to an advisory role when his successor, William Flynn, officially takes over as CEO on April 15, Anderson made it clear that policies recently formulated by the existing management team and Amtrak Board Chairman Anthony Coscia would prevail for the foreseeable feature. Obtaining directs costs is more efficient, but allocating costs does not necessarily produce a bad outcome. The American people seem to be content to just listen to the conversation, blindly accept the consequences of inaction, and then wonder why somebody didnt do something about the situation before it was too late. Whats a billion or two for Amtrak in a bill that will will total two trillion? Volpe describes another rough estimation, asset usage allocation, as a synthetic substitute for interest and depreciation. Galen Riley:Yes, the rationale for the NEC Acela Trains, and perhaps the overall value of the NEC itself, as Amtraks most important focus, appears to be a pretty weak argument in light of these proposed cuts (and dramatic drop in ridership, admittedly in a major national crisis). , for 13 years, has also held senior roles with CSX Transportation, Sea-Land Services, Inc, and GeoLogistics Corp. With our state and commuter partners, we move people, the economy and the nation forward, carrying more than 30 million Amtrak customers for each of the past eight years. The family followed railroad work from Galveston to Dallas and Amarillo. Mr. Flynn is the chairman and former chief executive of Atlas Air Worldwide Holdings, which operates cargo airlines and other airfreight businesses. Allocating so many costs also means that local management no longer has much responsibility to manage them since they are not their problem. Paul Smith, who authored or published those white papers that you site? Our continuing work of educating Anderson will remain a senior adviser through the end of the year. See here for a complete list of exchanges and delays. Amazing that it has survived for 50 years. with reductions in non-agreement employee wages by between 7% and 22%; Gardner should be doing 10 years in the slammer for violating the public trust. and long-distance bookings are down 64%. Amtrak Has Lost Money for Decades. Former Amtrak CEO Moorman and current CEO Anderson both publicly stated, and Amtrak documents confirm, that they came out of retirement to work without a salary. You could learn something about the practices implied by the titles. Misplaced priorities also affect growth of Amtraks existing business. Citing anonymous sources is disingenuous. A spokeswoman for Atlas said that Mr. Flynn would remain the companys chairman. Frustrated by the impasse in Washington on that proposed project, Amtrak officials have started planning piecemeal repairs to the existing Hudson tunnels, which are 109 years old. and passenger rail come from conference registrations, sponsorships and The entire board and most of top management should be throw out, they are all incompetent. Yet, because of this accounting treatment, Acela Express and Northeast Regionals chalk up less than $90,000 in such expenses.
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