NEW YORK — Amtrak workers and union leaders staged a protest outside Penn Station on Wednesday, saying the company is preparing to lay off up to 1,700 workers by outsourcing its food services. The New York Post reported an estimated 100 protest…
I’m sure it’s been proven many times in business that austerity and service cuts are the clear pathway to profitability.
Mr. Anderson must be a very wise man, indeed.
It makes me wonder why no other Amtrak presidents in almost 50 years were farsighted enough to employ this sure-fire technique.
Profitability, to paraphrase Mr. Hoover, is just around the corner. Right?
I plan to ride the Cardinal to Washington the next time I go east. As of today, it still has a diner.
Just like Sears is cutting it’s way to profitability - or oblivion!
Perhaps all others dodged the problem?
In the Passenger Rail Reform & Investment Act of 2015 the following is required: “Beginning on the date that is five years after the date of enactment of [PRRIA], no Federal funds may be used to cover any operating loss associated with providing food and beverage service on a route operated by Amtrak.”
The same law requires that no Amtrak employee lose his or her employment due to implementation of this order.
The five years are up on December 30, 2020. So Mr. Anderson can’t dodge the requirement anymore. The devil takes the hindmost.
Regards, Volker
Successful businesses focus on markets where there is an arm’s length demand for their outputs. And where people are willing to pay enough to cover the costs of production, delivery, etc. as well as provide a reasonable return for the shareholders.
Cost control is important. But only if a company’s products and services are tuned to market demand. Sometimes, for a variety of reasons, management realizes that there is no real demand for a product or service. And they drop them. Happens all the time. One need look no further than GE to see it in action.
If Amtrak were managed like a real business, management would drop the long-distance trains in a heartbeat. Without them, it would have realized an overall operating profit in FY17.
According to Amtrak’s IG, more than 96 percent of Amtrak’s food and beverage losses are attributable to the long-distance trains. Get rid of them, and cuts to food and beverage services would not be an issue.
Sears is an investor owned business. Management has made a lot of mistakes. It probably will file for bankruptcy in a week or so. Ultimately, the shareholders and bondholders will wear the consequences.
Markets have an effective way of carving out organizations that fail to deliver what customers want. It is the nature of the game. Sear’s problems started long before any so-call austerity moves. Moreover, it does not even begin to resemble Amtrak.
Unlike a private business, when Amtrak’s management makes a bad decision(s), the consequences fall on the taxpayers. As of the end of FY17 Amtrak had hung the American taxpayers with approximately $34.7 billion in losses before adjustment for inflation. Restated in 2009 constant dollars, which is a benchmark year used by the Congressional Budget Office, the losses are north of $40 billion.
Hey a money saving tip for you. If you need a new or nearly new appliance for cheap, check out online - Google: “Sears Outlet Store”. They have some 50% of deals on just minor cosmetically damaged appliances. They are not all Sears brands either. Kitchen Aide, Maytag, Whirlpool, LG, Samsung. It’s like the old Railroad Salvage Stores they used to have around the country.
So Sears still has one good concept left at least.
Have had Craftsman tools for over 25 years. Have had some replaced by the former - you break it we replace it guarantee - When Sears still owned the Craftsman name - they no longer do. I think the only Sears Brand that is still owned by Sears is Kenmore and they are trying to sell it.
There are still two Sears stores in my area - they are looking threadbare and run down.
Let’s get real: Amtrak is not a real business; at least not as you’d define it. Neither is the Postal Service; both provide a service the American public has shown repeatedly that it wants and is willing to subsidize to retain. Amtrak has no shareholders (stakeholders, certainly), no need to inflate stock prices so that top managers get big bonuses, no shareholder meetings, no need to worry that a hedgefund will buy it and then liquidate it for their own private profit. It just needs to serve the American public that is paying for it. Everywhere.
I think the incontroverible point has been made on this forum a number of times before you joined us: Without long distance trains there will shortly be no Amtrak. Period. Amtrak won’t exisit politically or economically without support in both Houses of Congress, and the several coastal states don’t have enough members of Congress to shove down the NEC down our throats without a suitable sweetener. After all, what would be in such a NEC Amtrak for us?
The subsidy you mention? Over 50 years that amount doesn’t seem very much to me, and in fact it hasn’t been. What has been spent since 1971 on…(here insert the gov
Sears is gone from my area. Ten or so years ago, there were three–then there were two–then there was one–and now there is none.
At its formation Amtrak was expected to earn a profit within a set timeframe. When that proved to be impossible, the governance language was changed to say that it should be run like a business. Running a commercial enterprise like a business means covering its costs. Amtrak has not even come close.
The American people wanted Amtrak? Or was it an influential albeit fanatical passenger train lobby that helped push the legislation through the Congress. If the American people had wanted passenger trains, especially long-distance trains, how come they deserted them in mass beginning in the 1950s?
Amtrak is a stock corporation. All the preferred shares are owned by the U.S. Secretary of Transportation for the benefit of the federal government. The common stock, which is worthless, is owned by one or more of the investor own railroads or successors.
Amtrak carries people from one point to another for a fare. That is a generally accepted definition of a commercial enterprise or busin
[quote user=“PJS1”]
I have a lifetime of experience as a taxpayer, customer, and railfan. Those are my credentials.
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PJS1
I have no idea what you did or do in your work life, but it does not appear that you have had any experience in running a business or being part of a large business organization.
At its formation - Amtrak was expected to be history in five years. That was the business plan of its founders. As such traditional business goals never applied to Amtrak and with it being captive to the whims of Congress they still don’t apply.
This is a common assumption. However, I have never seen any independently verifiable evidence that the founders of Amtrak expected it to fail and be gone within five years of its founding.
Unless the decision makers wrote down their expectations, one would have needed to be part of the decision making processes, heard them say that and written it down for posterity. Or been mind reader see into the minds of the decision makers.
Everything that I have heard or seen about Amtrak’s life expectancy is based on hearsay that has traveled widely.
From its mission to its organizational structure, Amtrak has the markings of a business or commercial enterprise. It has been a financial failure, to be sure, but that does not change the nature of its footprint.
Actually your mistaken there, BaltACD is correct, that verbage was mostly a political front. Amtrak was a compromise between the Nixon Administration and the Democrats. The Nixon administration didn’t give the concept more than 5-6 years based on railroad CEO input and thought the Feds would give up. That is part of the reason they tried a rehab of the passenger equipment vs wholesale replacement and why they scrapped or refused large parts of the fleet. Also, why they bought FP-45’s for locomotives as they continued the railroad philosophy that they could be used for freight upon Amtraks failure (thats why Santa Fe and Milwaukee Road bought them as well prior to Amtrak, they knew in a matter of years they would be freight only units). I believe SP bought SDP-45’s with steam generators for the same reason, if you look at the SDP-45’s closely, they were designed more for freight service than passenger service.
Amtrak’s first 10-15 years was band aid after band aid waiting for Congress to give in and cancel the program, which it never did. Also, part of the 40 Billion in subsidy you cite was to restore track and signal infrastructure not totally related to Amtrak back to operational condition from decades of deferred maintence. As well as rehab depots. Not all of that money went direct to passenger train operations.
Or just do the research and see what the Nixon Administration and later the Ford Administration officials stated about Amtrak. Pretty sure you can get that from the Nixon Library.
Then of course you have the words of Nixon himself which hardly endorse the system or program…note the very reluctant verbage at the end in the last paragraph…
If you think politicians write down verifyable data about their REAL INTENTIONS, I have a Trans-Oceanic Bridge to sell you. Amtrak was created to fail and thus give the politicans cover - the fact that it has continued to operate for 47 years is a testament to Amtrak leadership and work force.
Neither article identifies anyone associated with Amtrak’s formation stating that it would be history in five years. Reading between the lines, which is speculation, it is reasonable to conclude that one or more of the decisions makers had doubts about its long-term viability, but that is a far cry from explicit evidence that the founders stated the intent was for Amtrak to be history in five years.
The Jaffe piece is mostly about maps, although the topical sentence in the first paragraph contains this assertion: “no one thought Amtrak was long for this world.” It is an unsupported opinion. Who is “no one”?
Buying FP-45s appears to have been part of a contingency plan, which is what most businesses do. It could have failed. But that is much different than saying the founders knew that it would fail. If there is an
Perhaps I misunderstand you but Amtrak never owned FP45s. Only ATSF (9) and Milwaukee Road (5) ordered them. ATSF bought them in 1967 for their premier passenger trains as they didn’t like the SDP45’s road switcher appearance. After Amtrak took over ATSF was able to use the FP45 as freight locomotive as it was a redesigned SD45 freight locomotive
Amtrak bought EMD SDP40F locomotives which were redesigned from the SD40-2.
As others had good experiences with freight locomotive redesigns (SDP40, SDP45, FP45 etc.) as passenger locomotives went the same way. The locomotive was prepared for change to electrical HEP. Thus the steam generator was placed on a scid and easily removale. I doubt that one can take the SDP40F’s easy convertability for freight service as indicator for planning for Amtrak’s failure.
The SDP45 was redesigned from the SD45 so it was originally designed for freight service. It was the only way for a manufacturer to build a small series (52) of passenger locomotives at reasonable costs through saving the high costs for a completely new design.
Regards, Volker