A lot of damage can be done in 1.5 to 4.5 months. A lot has already been done. And his team may continue to use a sledgehammer approach after he returns to his failing businesses.
I disagree. I think as far as the DOGE HQ goon squad forcing their way in, it is pretty safe there as well as safe from anyone looking at the books directly. I agree the Congressional funding might be at risk but I am also fairly confident DOGE Is not going to step between Amtrak and Congress. Time will tell though.
Agree, International confidence in the United States has been undermined by POTUS via his recent actions and public comments.
That impacts Amtrak directly as well as the rest of us. Interest rates for any kind of debt including the National Debt will be higher as it will be more difficult to float stock IPO’s (not really an Amtrak issue). Amtrak will pay higher prices over the next year due in part to inflation driven by any long-term tariffs and that will erode their budget…my estimate it will be near 10% reduction in spending power over the next year. Insurance rates might rise with the changes being implemented for NWS as property owners might not have the lead time they had in the past to prepare for severe weather. I would assume that includes Amtrak.
Overall, higher inflation, higher interest charged, lower economic growth. T-Bill sell off on Friday afternoon should be a concern if it continues. Hopefully it is not a new systemic issue and is just people covering their short term call options and such. If it continues we are in trouble down the line.
Just an observation. Amtrak, as originally envisioned by many, was supposed to have “gone gentle into the good night” 40 to 50 years ago. 1979, under Carter’s administration, saw a 14% reduction in routes. The original proposal was to eliminate 43% of Amtrak then.
Amtrak was less about saving long distance passenger service, but more about relieving railroads, especially Penn Central, of their passenger train losses.
Jeff
CMSPnP: The National Railroad Passenger Corporation is (as said before) a quasi-public corporation very dependent on Federal (as pointed out by Balt) and state funding, as its cashbox revenues don’t cover its expenses.
In 2021, the 117th United States Congress of the_United_States_ passed and President Biden signed the Infrastructure Investment and Jobs Act, which directly appropriated $66 billion for rail over a five-year period, of which at least $18 billion is designated for expanding passenger rail service to new corridors, and it authorized an additional $36 billion. Amtrak received $22 billion in advance appropriations and $19 billion in fully authorized fund.
All funding is at risk, especially all from Biden.
I understand this is the result of foreigners and foreign governments taking their money elsewhere. It won’t soon be back. So, you’re right: we are in trouble.
Politically Yes, that was the goal of the Nixon administration and only providing a placebo to the public of a continuance of service with the intent to yank it later.
Not sure I would agree that was the goal of the Carter Administration. Also, grass roots during formation of Amtrak wanted to keep the trains even if the Nixon administration did not.
Really what killed the passenger train according to Classic Streamliners / California Zephyr was the labor cost difference between the passenger train and other modes of travel (looking back in the 1950’s when the decision was made to create the California Zephyr).
Ticket price vs Cost is the driving reason of Amtrak deficits as Amtrak is in a perpetual catch-22. Keep prices unrealistically low to appease the public and Congress while paying onboard staff a salary you can raise a family on vs a lower wage and less staff. Private railroads decided on Streamliners in a lot of cases due to expectations of post war use and the feeling they brought in freight clients even though they were marginal or lost money.
I believe the Classic Streamliner video had a ratio of paid crew to riding passenger which was way over the top vs airline travel. Of course the time of travel plays a role as well.
Yes, my opinion he will damage overseas confidence in the United States so much that our larger economy is gone for good and we will have to settle for less for the next 15-20 years. I think China will have a similar issue without the United States as an export market if it comes to that. I don’t think we will ever see China overtake us unless they abandon the CCP. So as far as world leader we are probably fairly safe for at least next 15 years or more but we were on a decent tragectory of growth before it was screwed up.
If Amtrak’s federal and state cash infusions were turned off, it would be able to operate with adjustments for at least two years without any government cash.
In FY24 Amtrak had an operating cash loss of $881 million. It received approximately $3.7 billion from federal and state paid in capital as well as issuance of public debt. It used approximately $3.5 billion to buy and/or refurbish property and equipment. In addition, the sale and purchase of short-and/or medium-term securities netted the company approximately $817 million in cash. By the end of FY24 net cash had increased by $36 million.
At the end of FY24 the company had nearly $3 billion in cash and cash equivalents, short term securities and securities for sale. If the government(s) cash spicket were turned off, Amtrak could continue to operate for at least two years by selling some or all of its marketable securities to cover operating cash requirements.
To get by the company would need to slow or stop additions to property and equipment, and make other changes to its balance sheet, i.e. accelerate receivables, lengthen payables, adjust prepayments, etc. Doing so could cause legal problems with contractors, among others, but they probably could be managed.
In FY24 the NEC turned in an operating profit of $267.8 million. The State Supported trains had an operating loss of $251.5 million, while the long-distance trains racked up an operating loss of $635.1 million. If Amtrak could shed the long-distance trains and tell the states to eat 100 percent of the losses on their trains, it probably could continue to operate along the NEC without government support. Whether it could issue sufficient long-term debt to cover its share of the required capital improvements to the NEC and service it with revenues, etc. is unknown.
Not completely. The funding at risk is the funding that has not been committed yet. So a lot of the funding for FY 2025 is not touchable if it has been committed already. It is FY 2026 that one needs to worry about. Also, all funding with a statutory basis is off limits as well. They attempted clawbacks earlier and setup more ground rules. So Amtrak’s current FY is off limits if the money is committed and as it turns out the State Grant to Wisconsin that was just awarded over $70 million for Amtrak related track reconfiguration. It was awarded October 2024 and so far…no clawback. It is already committed to the project as well.
Also, I believed the New Orleans to Mobile service is moving forwards once CSX figures out what is under it’s tracks in Mobile (still unsure why that is a mystery). Though I wonder if they could borrow Superliners off the City of New Orleans or Sunset Limited for this new service? Given the Bombardier coach shortage they might. Time will tell there.
Only 4.5 months left in this Financial Year. Many contractors will hesitate to continue beyond Sept. 30 because the current uncertainty.
That’s not likely with the Horizon problems, the Avelia Liberty trains not passing their testing, and the Airo sets delayed. I suspect there will be problems with Superliners relatively soon (if not already) if they go ‘unreplaced’ on the schedule indicated in the RFPs.
Where did you see notification the Airo sets were delayed? In regards to the Liberty trainsets, says this Spring. I don’t think these are difficult issues to overcome myself. Would rather have Amtrak delay then run defective trainsets. Do the rollouts correctly, is my vote.
I have seen reference to delayed Airo deliveries go by in several news stories, including a couple of the initial Horizon stories, and if I recall correctly, one about the Talgi set unexpectedly put out of service. I certainly hope the stories have no real basis in reality.
I’ll welcome the Avelias into service when they get here. Spring would be grand. Even more grand if there are no teething troubles when they start running them.
It is not that they are ‘difficult’ issues to overcome; it is that they require time and money to be overcome. And Amtrak might not have those available at the time and in the amount needed. (Although personally I think that extensive cuts in office and legal staff are likely the ‘low-hanging’ fruit that even politicians wanting to keep their Harley’s Hornets will not want to defend…
Do you frequent the NEC living in Memphis?
Amtrak will survive. Lots of folks jumping the gun here, in my opinion.
You said you are contracted. Does that mean you should start looking?
Any time I travel up to NIH in Bethesda I go into Battimore and go in from Landover. When I’m at a college reunion I take the train to New York or Philadelphia. My daughter is looking at a PhD program at Yale and I expect the trains will be significant.
Any Airo delivery delays might come from the NC plant building not getting finished on time.
They are being built in California from the pictures I saw. At least part of the order is there. I think they also are finishing up still the Amtrak Midwest order. They had a few cars left plus I am sure Wisconsin ordered three more cab cars. Amtrak California I am not sure they have all their trainsets. CT DOT I believe is refreshing cars this year as well. So not like the rail passenger car market is tight. It is more Amtrak’s willingness to obtain stand in cars or use what they have. I don’t believe the earlier TRAINS newswire item that stated losing 100 Amtrak Bombardier cars would be an issue.