Amtrak's new CEO brings airline experience to the railroad

Amtrak's new CEO brings airline experience to the railroad

An airline executive will be Amtrak’s next president and CEO, the rail company announced Monday,  June 26, 2017.

Richard Anderson, 62, will join Amtrak July 12 after 25 years in the aviation industry, most recently as executive chairman of Delta Air Lines’ board of directors.

The current Amtrak chief, Charles “Wick” Moorman, who came to the railroad company in September 2016 after a career in commercial rail, is staying on until the end of December as a co-CEO, he said in an interview Monday. In 2018, he expects to remain affiliated with Amtrak as an adviser. “One thing he is not as familiar with is the railroad,” Moorman said. “I will continue to be involved as co-CEO until the end of the year and in some fashion, I think, beyond that.”

Anderson Amtrak CEO

New Amtrak CEO: Richard Anderson

Moorman always intended to be a transitional CEO, he said, and he participated in the months-long search for a permanent replacement. Anderson’s management at Delta secured his reputation as a man who understood transportation businesses, and someone who could turn around an ailing company.

Anderson, a former county prosecutor and native of Galveston, Texas, was Delta’s CEO from 2007 to 2016. He also worked as executive vice president at United Healthcare from 2004 to 2007 and CEO of Northwest Airlines from 2001 to 2004.

“What you get with a Richard Anderson is a corporate leader,” Moorman said. “He’s creative and thoughtful and will go find the answers to problems.”

Anderson was not available for interviews Monday, Amtrak staff said. The Gateway Project, which would build a new tunnel under the Hudson River, has turned into a race against time as the current tunnel, which was damaged in Hurricane Sandy, will soon become unusable. About 700,000 people travel on some portion of the Northeast Corridor, which passes through Philadelphia, each workday. Throughout the route, infrastructure is aging.

Amtrak spends about $300 million a year keeping the Northeast Corridor in good repair, but the need is between $700 million and $900 million. Amtrak operates at a loss, but in 2015, it benefited from a $10 billion, five-year federal allocation for passenger rail and infrastructure spending. It remains an open question how much the rail service would benefit from a proposed trillion-dollar federal infrastructure bill.

Amtrak carries more than 30 million Amtrak passengers a year on 300 daily trains. The CEO is selected by the company’s 10 board of directors, nine of whom are appointed by the president.

Source:  Jason Laughlin, Staff Writer - Philadelphia Media Network & AP Associated Press / June 26, 2017

 

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Original Post

Maybe what A and all companies need to do is to split the CEO and President jobs.  The Prez does the PR stuff and makes nice to the Public and Government.

The CEO is the one in the background running the show so that the company does not fall off the rails.

The TEXAS SPECIAL:  The REAL RED streak of the golden prairies!

Amtrak needs to bring their labor costs under control and until they do so the CEO will make little difference.  You could put my eight year old son in charge and it would be the same.  If you look at the 2015 financials, their labor and benefit costs pretty much equal ticket revenues (and more than 2/3 of total revenue is consumed by labor expenses) so the remainder of the railroad's other expenses - small minor things like capital expenditures to maintain and improve rail cars and trackage- is dependent on other revenue.  This is why Penn Station is a mess, for example.  

If you look at a private railroad like NS, if I recall correctly labor and benefit expenses are in the neighborhood of 2.7 billion on total revenue of 10 billion.  This is how they maintain trackage and equipment withou relying on direct state support.  The comparison is startling to me.  

Final thought is that reporters covering businesses should know how to read a balance sheet and income statement.  All of this information is free and publicly available for companies like Amtrak and NS and it yields plain insights into why Amtrak needs billions to catch up -  they have neglected infrastructure for years as the railroad is run with excessively high labor costs.


 

Ray Lombardo posted:

If you look at a private railroad like NS, if I recall correctly labor and benefit expenses are in the neighborhood of 2.7 billion on total revenue of 10 billion.  This is how they maintain trackage and equipment withou relying on direct state support.  The comparison is startling to me.  

Funny you mentioned this. It would be interesting to compare the average compensation package of a freight worker versus the average compensation package of an Amtrak worker. I would imagine the freight service is what is driving up Amtrak's labor costs.

Corey West

Aircraft for work, trains for fun.

Wick Moorman Out As Amtrak's CEO

https://www.youtube.com/watch?v=Lt6POnG83k4

Published on Jun 26, 2017 - Short Video

The shakeup comes just weeks before Amtrak starts its massive repair project at Penn Station. CBS2 Political Reported Marcia Kramer reports.

Source:  CBS New York

Ray Lombardo posted:

Amtrak needs to bring their labor costs under control and until they do so the CEO will make little difference.  You could put my eight year old son in charge and it would be the same.  If you look at the 2015 financials, their labor and benefit costs pretty much equal ticket revenues (and more than 2/3 of total revenue is consumed by labor expenses) so the remainder of the railroad's other expenses - small minor things like capital expenditures to maintain and improve rail cars and trackage- is dependent on other revenue.  This is why Penn Station is a mess, for example.  

If you look at a private railroad like NS, if I recall correctly labor and benefit expenses are in the neighborhood of 2.7 billion on total revenue of 10 billion.  This is how they maintain trackage and equipment withou relying on direct state support.  The comparison is startling to me.  

Final thought is that reporters covering businesses should know how to read a balance sheet and income statement.  All of this information is free and publicly available for companies like Amtrak and NS and it yields plain insights into why Amtrak needs billions to catch up -  they have neglected infrastructure for years as the railroad is run with excessively high labor costs.


 

But note this comment:

I don't see there being an issue with labor being so much higher than all other expenses on the balance sheet.  Compared to other passenger operations in this country, Amtrak's 50% labor to all other expenses is reasonable.  Here is some quick research in to the labor expense ratios for some other passenger railroads in the US: New Jersey Transit 52%, SEPTA 59%.

All Amtrak and commuter trains have multiple conductors compared to freight trains which typically have 1 conductor.  Amtrak long distance trains have additional crew members for handling food service and sleeping / coach car attendants.  Unlike the airline and bus industries, Amtrak's payroll includes right-of-way (track/signal/structures) maintainers, engineering, police, dispatching, etc.  For airlines, dispatching/air traffic control is covered by the FAA, airports are maintained and staffed by local governmental authorities, security is provided by the Feds (TSA).

So based on the above explanation, it makes sense labor would be such a big expense.  If you really think about it, moving people is very labor intensive process.  Think of how many people are involved in transporting people on an airplane or a ship (cruise or ferry) let alone a train (Amtrak or commuter).  It takes a lot of people.

Another executive involved with the airlines as well as railroads was Jerry Grinstein, former CEO of Burlington Northern. He was also on the board of Delta, and later its CEO. I asked him once which was more difficult to run, the railroad or the airline. He responded that the railroad was significantly more difficult to run.

breezinup posted:
...

Unlike the airline and bus industries, Amtrak's payroll includes right-of-way (track/signal/structures) maintainers, engineering, police, dispatching, etc.  For airlines, dispatching/air traffic control is covered by the FAA, airports are maintained and staffed by local governmental authorities, security is provided by the Feds (TSA).

...

Read, your tax dollars at work.

I'm not sure relevance "airline experience" has. Or running a healthcare company.  There are many political constraints to the AMTRAK animal. The AMTRAK website was obviously designed by a mentally retarded chimpanzee on drugs, and Morman did nothing about it. It is an example of how NOT to market a product. AMTRAK is forbidden by law to give deep discounts, unlike airlines, who fill up empty seats that way, for example. The northeast corridor service is was overpriced. I can walk two blocks and get a chinese bus ny to washington for ten bucks, wifi included. Then there are the craft union constraints. not necessarily evil, but making operational changes difficult. And the equipment shortage. And the issue of track priority. AMTRAK is a mess.

I think most Amtrak trains have 1 conductor and one or more assistants.  The northeast trains have only several assistants and no car attendants.  It would be tough for one conductor to even scan all tickets among other tasks.

Michael...

TCA, LCCA, TTOS, NASG

The last person to be running Amtrak is an airline executive. They, the airlines executives are despised by their leadership. Just look at the merger of Continental Airlines with UA. UA was a complete train wreck, no pun intended, publicly traded the they participated an employee buyout that was draconian in nature. Bankrupt, sticks, then some group of genius's decided to merge with Continental where new UA management practices and contracts were forced upon a once very happy set of employees who won JD Power awards regularly. The merger proved to be an absolute disaster including  Customer Service, which by far, though they do not have a monopoly on it, the worst Customer Service. A far cry when Continental was a great company. These so called Airline CEO's have no idea what customer services is much less how to run a railroad.

One thing that Amtrak does not need is CEO like Anderson. I doubt he has every ridden Amtrak nor is he even close to being prepared to manage Amtrak and deal with freight companies.

Wick is out because for 50 years no investment has been made in improving the infrastructure at Penn Station. Just read the Bergen Record today on the plans to re route passengers coming into Penn Station, they can even agree on simple passenger numbers being affected. Path Trains will be a wreck, NJ Transit  wreck, the answer to commuters is take vacation, take a bus, work from home and oh yeah, plan to be in NYC by 7 am because from 8 ~ 10 am and 4pm to 8 pm will be chaotic.

Let's award the job to the airlines instead of a proven RR Executive. Maybe he can squeeze a few bucks from Congress. I expect fare increases, baggage fees, higher food prices and more system wide delays.

I guess Anderson won't be able to use the excuse that the delay to Newark is because of weather, hear that all the time, sunny, no wind, beautiful day - but weather delays are the standard answer.

Does he even know where the NE Corridor is? 

What a disgrace.

 

 

TCA, METCA, LCCA, LRRC, MTHRRC, Atlas Golden Spike Club Charter Member, Bergen County Model RRC and NJ HiRailers Member.

 

If you haven't checked out the new NJ HiRailers website please do. Go to the "Photos" page to see galleries of our events and check the "What's New" page periodically to see what we've added.

 

 

 

Tonight, I am watching, NYC, ABC Eyewitness News, Channel 7 and they reported that seating on Amtrak will be tighter. That's code for smaller cramped seating with crappy service.

Did not take long for Airline CEO mentality to take hold. Amazing, that Richard Anderson has already begun to screwing up Amtrak.

Stupidity and ignorance apparently do go hand in hand.  I guess it could have been worse as Amtrak could have gotten their new CEO from United or Delta. I guess I will be driving the NE Corridor instead of the Amtrak, I do, mean did like the Acela Express.

Proof that nothing can save Amtrak. Underfunded, share track, decent service so let's really throw a wrench into the works by hiring an airline executive who is almost hated as much as Congress and the media.

Bring back Wick. Dealt a bad hand, right idea and forced to take the hit on Penn Station after year of putting off repairs, maintenance and upgrades.

What a shame. The fortunate item here is that anything like this would need approval so I would suspect that this balloon would be deflated fast. 

 

 

 

TCA, METCA, LCCA, LRRC, MTHRRC, Atlas Golden Spike Club Charter Member, Bergen County Model RRC and NJ HiRailers Member.

 

If you haven't checked out the new NJ HiRailers website please do. Go to the "Photos" page to see galleries of our events and check the "What's New" page periodically to see what we've added.

 

 

 

1 Amtrak New Seating AP

Chuck Schumer slams Amtrak economy seating proposal ...........

Amtrak may be feeling the squeeze, but Sen. Chuck Schumer doesn’t think its passengers should be too.

On the heels of news that the rail system is considering tighter economy-style seating to pack in more passengers, Schumer slammed the idea on Sunday, saying that the move would take a page straight from the airline playbook.

Source: AP July 17, 2017

Gary

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PSU1980 posted:

The last person to be running Amtrak is an airline executive. They, the airlines executives are despised by their leadership. Just look at the merger of Continental Airlines with UA. UA was a complete train wreck, no pun intended, publicly traded the they participated an employee buyout that was draconian in nature. Bankrupt, sticks, then some group of genius's decided to merge with Continental where new UA management practices and contracts were forced upon a once very happy set of employees who won JD Power awards regularly. The merger proved to be an absolute disaster including  Customer Service, which by far, though they do not have a monopoly on it, the worst Customer Service. A far cry when Continental was a great company. These so called Airline CEO's have no idea what customer services is much less how to run a railroad.

One thing that Amtrak does not need is CEO like Anderson. I doubt he has every ridden Amtrak nor is he even close to being prepared to manage Amtrak and deal with freight companies.

 

Let's award the job to the airlines instead of a proven RR Executive. Maybe he can squeeze a few bucks from Congress. I expect fare increases, baggage fees, higher food prices and more system wide delays.

I guess Anderson won't be able to use the excuse that the delay to Newark is because of weather, hear that all the time, sunny, no wind, beautiful day - but weather delays are the standard answer.

Does he even know where the NE Corridor is? 

What a disgrace.

IIRC when United went into bankruptcy to break the unions, all the UA management team was going to be given stock in the "new" reorganized United because of their outstanding abilities while the regular shareholders lost everything. When they "merged" with Continental it became United Airlines in name only. Run as and by Continental with Continental ticket software, management and policies, etc. And we can see where that new railroad CEO has gotten United, just one bad headline after another...

Why shouldn't Amtrak be run poorly? Didn't some railroad honcho in Chicago (Metra?) commit suicide after it was discovered he was paying himself for days off or something into near a million dollars? And the board "was shocked and unaware" when it came out.  The financial recovery was dropped after his death. Just more of the same.

People may complain about the airlines, but the reality is that they are profitable and that means consumers are voting with dollars to embrace the economy style of flying.  People can argue, but the airplanes are full so that means the model works.  Unless people believe business exists to lose money.

Amtrak's new CEO, understanding that the expense side of the income statement (i.e., mostly employee and related benefit costs that are far higher than in any other comparable industry) cannot be adjusted due to the combination of federal style work rules and a vocal union, understands that in the current federal budgetary climate there is a need to enhance income.  You do that by adding seats if there is demand.  Like with the airlines, you will likely need to be a loyal customer to get a level of service above the most basic.  And you will pay for it.  That will fund capital improvements and Amtrak's bloated employee expenses in the absence of federal funding for discretionary (i.e., non entitlement spending) items.   Given that we have now run up 21 trillion in debt and counting, choices will need to be made all over and this is just one small (Amtrak's subsidy is a very small portion of federal outlays) example.

Get used to this type of thing more and more as federal money become more scarce as we bankrupt ourselves on entitlements.  

The airline model works because of TIME and time only. NY to LA in 6 hour by air and 30 hours give or take by rail. The American people as a whole wanted everything now and that was why rail pax service died in the first place. I am not sure anyone can fix Amtrak let alone an airline exce from an airline that does not do to bad.I can drive from my home in State College to Pittsburgh faster than I can ride Amtrak due to all the stops the train makes. Until the american people learn to appreciate this great country and enjoy it instead of flying over it Amtrak saddly will remain what it is. Just my opinion. 

Rick

PRRT&HS 8473

State College, PA

"Riding that magic carpet made of steel"

   "This train got the disappearing railroad blues

 

 

 

Oh JOY! 

Amtrak, now employing newly established practices,  and finding its Southwest Chief , among other intercity trains, seriously overbooked...

Overbookedtrain

...employs one of its conductors, recently schooled at the United Airlines Academy of Interpersonal Relationships, to remove one of its uncooperative  customers...

EmperorofNorth

...from his paid first-class accommodation.

This will surely help with annual congressional budgetary issues, too.

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I have read a lot and heard a lot about AMTRAK  but my only ride  was in 2007 from Pgh. to Altoona for the RAILFEST. I was all excited but what a huge disappointment. Old, dirty cars, the windows so cloudy that you could hardly see out.  At Pgh. I have seen better accomodations  in Podunk for a station. No signs, no information, lots of confusion. I was able to get my lady companion and myself some coffee that tasted like instant.  Glad that I didn't park at the PRR station because when we returned, people who had parked there, had their car windows broken. Downtown Pgh !!  Nice. To make a long trip like that-no thanks. I rode in better Army troop trains.  An airline guy to lead AMTRAK !!  Profitable ??  Mergers,bankruptcies and pushing people around like cattle. Making passengers sit on the tarmac for hours while they try to find a crew ??  What a joke.

Airlines use government owned airports.  Let us see how much profit they would make if the airports were privatized, and the owners have to pay full taxes.

Or they paid full allocated cost for airport use.

Or they paid Income Tax on the amount of full allocated costs not paid.

Free Enterprise to me includes free from from any and all government welfare and subsidies!

The TEXAS SPECIAL:  The REAL RED streak of the golden prairies!

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