So should Amrak acede to CAF under the threat of their going out of business and do nothing? There may be some sort of performance bonds put up by the manufacturer to make good on the defective product. But you are right. Amtrak should use manufacturers with a proven record of success with those specs. I wonder if there was any under the table component on CAF’s bid?
For the year 2015 CAF USA, aside from the Viewliner order, delivered 32 light rail vehicles to Houston and a handfull of streetcars to Cincinnati and Kansas City. Backloged for this year’s delivery are 24 light rail vehicles for Boston and the completion of the streetcars for the Midwest. That’s it. CAF’s exposure in the USA is so small that unless orders pick up they can easily pull up stakes and walk away unlike Bombardier, Siemens, Kawasaki, etc.
What should Amtrak do? They should learn not to do business with companies that have very little skin-in-the-game. Obviously they are not very good at that.
More misfeasance by the Boardman regime, like composition of the order itself – all those baggage and dorm cars – and its capitulation on food service.
Well, Amtrak has been thru many misadventures, including food service that has been up, down and back again. I suppose it will survive this one too, because support for it in the public is there.
What it really needs is a new board of directors. Who appoints those people, anyway?
49 U.S. Code § 24302 - Board of directors
(a) Composition and Terms.—
(1) The Amtrak Board of Directors (referred to in this section as the “Board”) is composed of the following 9 directors, each of whom must be a citizen of the United States:
(A) The Secretary of Transportation.
(B) The President of Amtrak.
(C) 7 individuals appointed by the President of the United States, by and with the advice and consent of the Senate, with general business and financial experience, experience or qualifications in transportation, freight and passenger rail transportation, travel, hospitality, cruise line, or passenger air transportation businesses, or representatives of employees or users of passenger rail transportation or a State government.
(2) In selecting individuals described in paragraph (1) for nominations for appointments to the Board, the President shall consult with the Speaker of the House of Representatives, the minority leader of the House of Representatives, the majority leader of the Senate, and the minority l
Thank you for the info, D. I’ve never had a sense of the board’s interest in administration of Amtrak except when they run off an effective president such as David Gunn. Maybe nobody in the press – or his boss – cares what’s going on at the board.
Hard to believe you could get 9 people to sign off on that stupid equipment order. Or to make no fuss (that we ever heard of) about the botched job they got from their contractor.
Most board members at most corporations go along with management like sock puppets, unless they got elected by ‘restless’ shareholders.
I know this wouldn’t work at Amtrak, but maybe board members at private companies should be required to have skin – a significant number of shares – in the game. That would pique interest, one would think.
Most of the board members of public corporations have a substantial position in the stock of the company.
The compensation of most board members consists of an annual retainer and common stock awards or warrants to purchase stock on the strike date.
CSX, which is a typical example, has 12 non-employee directors. In 2014 they received fees or cash payments that ranged from $27,500 to $105,000. In addition, each director received CSX common stock with a market value of $149,851 on the grant date, which was February 12, 2014.
The requirements regarding non-employee director ownership of CSX stock are set forth in this paragraph from the Proxy Report:
"These guidelines require that all non-employee directors own shares of CSX common stock.
Within five years of election to the Board, a non-employee director is expected to acquire and hold an amount of CSX common stock equal in value to five times the amount of such non-employee director’s annual retainer.
Moreover, non-employee directors may only dispose of shares held in excess of 120% of the applicable ownership threshold.
If the annual retainer increases, the non-employee directors will have five years from the time of the increase to acquire any additional shares needed to satisfy the guidelines."
Ah, but can you meet CSX’s ownership requirement with 5 years’ worth of “gift” stock? Is there real skin in the game? Why shouldn’t there be ownership going in?
And since some of you are certainly wondering, here is the current slate of NRPC directors: https://www.amtrak.com/servlet/ContentServer?c=Page&pagename=am%2FLayout&cid=1241245669142
Feel free to peruse their individual CV’s to see what makes them so eminently qualified to run a passenger railroad.
The Vice Chair formerly was with BNSF; Boardman was head of a regional transit agency. Directors of any company are seldom “eminently qualified” to run that company. Check the boards of CSX or NS or UP.
The CSX board has two people besides Michael Ward with rail experience, out of twelve.
NS board only one, Jim Squires, has rail experience, out of twelve.
UP board has only one, Mr. Fritz, out of eleven with rail experience.
CP board, two of nine wth a lot of experience.
Going off-topic now because talk about the Amtrak board makes me nostalgic for the mid-70s, when my dad was on it.
Chicago Tribune, March 20 1975
Editorial - Let Amtrak’s critics speak
We are on the side of all endangered and thus cheer the president of Amtrak in his endeavors to save the passenger train, but we cannot hope that God and the Interstate Commerce Commission grant him his latest wish.
The president, Paul Reistrup, wants the ICC to call off hearings in various cities concerning Amtrak’s performance. He made his request after witnesses in New York and Chicago told some pretty hot [and cold] stories about their travel experiences. One woman, for example, reported that her roomette on the Panama Limited was so overheated that she was compelled to travel nude to New Orleans. The lights didn’t work and there was no cool water.
Mr. Reistrup considers this kind of talk harmful to Amtrak and wants it stopped. But consider how tremendously much more harmful it would be, if the ICC said: “Okay, Paul. You win. No more hearings.”
Then people would say, “See? The trains are so bad that Amtrak hushed up the people who tried to tell about it.”
The passenger train would then progress from the status of endangered to that of well nigh extinct.
No, for Amtrak’