WASHINGTON — A signature event early in Amtrak President and CEO Richard Anderson’s tenure speaks volumes about the tone he has set in leading the organization the Amtrak Board of Directors hired him to run.
Private railcar owner Bennett Levin had arranged a special farewell at his own expense to mark the retirement of Billie Ernest, Amtrak’s veteran manager of charter moves who helped Levin and others safely and successfully operate their cars over the system for decades. He and a number of Amtrak operations people were going to surprise Ernest on her last day at Amtrak’s Consolidated National Operations Center, Jan. 19, 2018, with a “thank you” lunch aboard Levin’s former Pennsylvania Railroad business car and Southern Pacific lounge to take her home one last time from Wilmington, Del., to Washington, D.C., as part of a previously approved special train.
The idea was to give a proper retirement sendoff for this employee’s decades of service. But Anderson got wind of the move at the last minute and demanded that it be cancelled. Levin was notified at 7 p.m. on Jan. 18. His group packed up the food and held the Friday lunch in a Wilmington conference room instead. Two other charters Levin wanted to run were also cancelled after Amtrak line management had approved them — overruled by orders from the top.
Ernest was leaving Amtrak to start a consulting business because she was among hundreds of managers who knew how to market and operate “America’s Railroad” that were offered a severance package in late 2017, when Anderson was officially a “co-CEO” with his predecessor, Charles “Wick” Moorman.
We don’t know if it was Anderson, Moorman, or then-Chief Commercial Officer Stephen Gardner who set wheels in motion to shed years of invaluable institutional knowledge like Ernest’s; the action was certainly implemented with the support of Amtrak Board Chairman Tony Coscia. But it was Anderson who, early on, let anyone who remained know that deviation from edicts and beliefs emanating from the executive suite might result in their termination.
The former Delta CEO’s ideas are not the product of a railroad background. He doubled down by bringing in former airline marketing and safety executives, and with them elimination of regional, route-specific promotion in favor of internet-only, discount-driven fare sales and imposition of ticketing change fees where none had previously existed.
Anderson’s lack of collaboration with mid-level managers or perceived willingness to understand the vagaries of his new industry and unique advantages it enjoys over other travel modes has stirred resentment among employees. Any manager who comes up with an innovative idea that might improve customer satisfaction or enhance revenue had best make sure it is consistent with Anderson’s views before proposing it, according to several company sources.
The apparent “I know everything” attitude also resulted in early missteps. Anderson told lawmakers on February 15, “I doubt we will” operate any trains on routes without PTC technology just after the southbound Silver Star collided with a standing freight train (a facing point switch was incorrectly locked and positioned for the siding) less than two months after the deadly Amtrak Cascades derailment near Tacoma, Wash. Because such an edict would have caused discontinuance of trains that have operated safely for years on unsignaled routes, the company eventually backtracked to a systemwide “risk assessment of every route by Dec. 31, 2018” position, whose route-specific details have yet to be revealed.
On Anderson’s watch in 2018, Amtrak also:
•Sidelined the Coast Starlight’s Pacific Parlour Cars
•Ended freshly prepared meals and the jobs of people who served them on the Capitol Limited and Lake Shore Limited
•Eliminated all “off the regular route” chartered specials, including participation in an upstate New York “Toys for Tots” campaign (for which Amtrak eventually provided baggage cars)
•Instituted more restrictions governing where private cars could be switched into Amtrak trains
•Refused to supply a $3-million match that would have triggered a $25-million grant for the Southwest Chief
•Announced the closing of a Riverside, Calif., unionized call center, while some functions were outsourced to an independent Florida company.
Were all these ideas Richard Anderson’s?
“I don’t talk to the press,” Anderson curtly told a Trains Magazine correspondent at the April 19 California Rail Summit.
So, we don’t know.
But at the same meeting he characterized long-distance trains as “experiential,” rather than emphasize their rural public mobility function, and only cited the $750 million in costs they incur without mentioning revenues. Following the CEO’s lead, Amtrak’s fiscal year-end press release — for the first time ever — showed only ridership by route and business segment, not revenue figures.
It’s hard to understand Anderson’s motivations, mainly because he has opted to shield the scope of his knowledge from interviewers who may be more familiar with railroad practices than he is. Trains did file a Freedom of Information Act request with Amtrak in April attempting to get the same kind of CEO compensation information publicly traded companies must provide, but by Dec. 28 all Trains has learned is that his bonuses could total $500,000. Actual compensation was not provided, nor was an Amtrak Board memo referred to in the employment agreement which spells out how it could be earned.
Since those Washington and California appearances earlier in the year and after an August meeting with U.S. Senators along the route of the Southwest Chief prompting the lawmakers to seek a legislative remedy that would compel Amtrak to fund the $3 million grant match and keep the train running, Anderson has become much less visible.
For the abundance of under-explained changes to the United States’ passenger rail network and the uneasiness that advocates, passengers, and workers feel about Amtrak’s future, Trains editors name Richard Anderson the top railroad news story of 2018.
Read editors’ other Top 10 stories of 2018 online:
Trains Top stories for 2018: No. 10, Giants of RAIL PHOTOGRAPHY pass on
Trains Top stories for 2018: No. 9, Station Restorations
Trains Top stories for 2018: No. 8, Indiana Transportation Museum woes
Trains Top stories for 2018: No. 7; Fires, Floods, and Weather
Trains Top stories for 2018: No. 6, Runaways
Trains Top stories for 2018: No. 5, Bush funeral train
Trains Top stories for 2018: No. 4, positive train control
Trains top stories for 2018: No. 3: Brightline
Trains top stories for 2018: No. 2, Precision Scheduled Railroading
If this is the top story (and I agree that it is) then where is the corresponding article in Trains that addresses the issues in depth and proposes solutions? It almost seems as if the editors are avoiding it. It is time to devote an edition to addressing this subject on par with “Who Shot the Passenger Train,” the excellent edition published before the advent of Amtrak. The future of rail passenger service in this country is far more important than (for example) spikes.
good article and choice for #1 story. Every time I have rode Amtrak this year, this is big on the minds of the crew people I have talked to and I understand why. “Propeller head” knows nothing about trains which is totally different from airlines. People usually ride trains because they love it or hate to fly. I flew many times with TWA and loved it, but I will not fly any longer, they are not the same, dragging people from the plane, letting a doggie die in overhead, rude treatment, no thanks. I grew up riding trains and have always loved it and tell people that when I ride. I have heard that Wick seems to pick people to take his place when he retires that are not good, so it makes him look wonderful. Heard that from a former NS employee who cares about the future of Amtrak. Sounds like they probably do need an overhaul and updating but not with a man who seems only interested in the bottom line no matter how that is achieved. He needs to go and so does the Board who are telling him what to do and going along with it. Amtrak was set up to provide alternate transportation and even though they do not go everywhere like the trains did, they try to do the best they can. They have had to fight for money as long as they have existed and have held on for almost 50 years. Let’s not let them go down like what happened to TWA.
I attended the 50th Anniversary of Rail Passenger Association, formally NARP where I heard airline Anderson talk to us about Amtrak. As Leroy Gibbs from NCIS would talk about his gut feelings. I had my gut reacting to what airline Anderson was selling. What he was selling, I was not buying! I’m sorry to say that my gut was right. Too bad! So Sad! I wonder if he is getting his marching orders from that person in the WH?
TIMOTHY – Great post, thank you. Yo, TIMOTHY, that news vendor in the cave was a better businessman than we now have. In transportation one GROWS to prosperity or else one CUTS to bankruptcy.
In the history of business – back to the first newsstand in a cave – what company has CUT it’s way to success?
It appears that Anderson is doing what the board told him to do when they hired him: kill it.
JAY – I am a frequent flier. My account is on Southwest. Southwest is delightful. Domestically I won’t fly anyone else. Certainly not DAL, AAL, or UAL if I can avoid it. I barely have, in about the last 25 years. Just one trip one-way on Delta changing at Detroit Metro. (That’s why I know about the Richard Anderson plaque at the ex- Northwest terminal at DTW.)
Unlike the USA Big Three or Air Canada, Southwest flies all its own planes. I walk right past the second-tier regional airplanes with the fake Delta, American, United or Air Canada decals.
In 52 years of about 150 flights, I’ve never had a really bad experience or run into a rude employee. The closest I’ve ever come to a disaster was Air Canada goofing up when I changed a reservation by telephone. I managed to get to England but without the promised special-diet meal or the promised access to the Heathrow arrival lounge. In the big scheme of things that’s not too shabby.
I know most of your readers are not frequent flyers. But take it from a 2 Million mileage frequent flyer. Northwest Airlines was the worst airline in the industry under Richard Anderson It had unhappy employees mostly because of there treatment by Anderson. And so they were nasty to their customers. Just look up the trouble they had for years at the Detroit airport. The baggage handlers use to send the bags to the wrong airports as a protest for the treatment they received from NW management.The planes were the oldest in the industry and were in bad shape. We had a nickname for Northwest. We use to call in in North-worst !. And by the way they never made a profit and in the end if it wasn’t for Delta they would have gone out of business like TWA. Everything he ever did at NW he is doing at Amtrak. Does not surprise me a bit. And I take the train when I can, and I can tell you that I don’t want to be treated like I am on the airlines. If it’s not a better experience then I might as well just take the plane, as the pain of the trip is over faster
It’s hard for me to believe Mr. Anderson is headed in the right direction thinking he can cut back on passenger service and make the passenger railroad business once again profitable. Don’t most CEO’s make their year end bonus by showing a profit, but never disclosing the temporary service cutback or employees he had to let go in order to achieve his objective. The only way I can see for passenger service to survive is to increase the speed of the trains, experiment with new routes or areas that is showing new growth, making the consist longer so, “Amtrak” “Is Ready When You Are!” How do you do that when freight trains are breaking down everyday?. Start building short Maglev systems in phases? Who says Amtrak has to survive? Are Anderson’s days numbered? Real Estate X O’s are looking for expansion near tracks that are being sold by major railroads everyday….Until Amtrak is willing to put out the necessary money to add to the existing trains(consist) and improve service on current and new routes….the taxpayers are wasting it’s money on golden parachutes for people like Mr. Anderson!!
Whatever else you can say about Richard Anderson, he’s not incompetent and he’s not a fool. There have been several examples where an economically weak company is merged into a bigger and stronger company, but the weaker company provides the leadership for the combined corporation. (1) From what I heard a decade and a half later, I was a child at the time of the merger, B+O/ C+O merger in the early 1960’s. (2) AAL taking over US Airways, inheriting USAirways executives from Phoenix (3) Delta Airlines taking over NWA, inheriting Richard Anderson. The fact is, Richard Anderson kept NWA in business, built the massive Detroit hub (in partnership with Air France/ KLM), and went on to successfully lead Delta. So Richard Anderson obviously has what it takes to run a company of Amtrak’s size. Certainly he’s more capable than his and Moorman’s predecessor.
I don’t think Richard Anderson is the problem at Amtrak. I think the problem is Amtrak itself. Amtrak has never been any good at what it does.
Now, as 2018 ends, Amtrak has a bigger problem than its own past. This would be the dodgy politicians in Washington. The federal government to which Amtrak reports is falling apart. Both parties, and the Congress as well as the presidency. Amtrak is a symptom. Senator, later Vice President, Joe Biden for all his various quirks and shortcomings was a nice man who did some good for Amtrak. Mr. Biden is in retirement now. His successors in his party in his part of the country aren’t good leaders. They can say they’re pro Amtrak because NEC runs through their states. But they are such poor excuses for politicians that they can’t sit down with the other party to get anything done.
@Gerald McFarlane
He doesn’t need to have experience in railroading…What you failed to realize in your statement. Is that regardless of mode. He knows about moving passengers from point A to point B. Doesn’t matter with his aviation background. He knows the passenger business.
Mr. Webster, he is not being asked to answer questions from “fans.” He is asked to answer questions from US taxpayers, for whom he works. Some of these taxpayers may also be rail fans, but that is irrelevant to the quite reasonable expectations of answers to questions about the organizations actions, including his.
Braden Kayganich,
This post probably won’t get passed the sensors but I’ll try and make it nice…you can take your accusations elsewhere, Richard Anderson is an AIRLINE executive, he has absolutely ZERO knowledge about railroads and therefore 0 knowledge about Passenger trains. If the LD trains are so bad…why are most of the almost always sold out during the summer months…for that matter, why are they almost always sold out all the time and you need to book tickets 6 or more months in advance? No, the problem is cost allocation and accounting practices, neither of which are known or even closely follow standard accounting practices(and that is a known fact). What Amtrak needs is to have the BoD dissolved and the next CEO report directly to the FRA(and to have the balls to stand up to Congress and tell them what they don’t want to hear).
Amtrak needs to be reformed.. Whether you like Mr. Anderson, or not. The days of operating as a tourist outfit with limited corridor service needs to end. He’s spot on about LD trains being experiential with the exception of the Empire Builder. Nothing wrong with borrowing ideas and proven systems from other industries to streamline, and grow revenue. Amtrak needs to dump most LD trains. Let a company like Rocky Mountaineer operate them as they’re intended to be.. “land cruises”. As Arthur commented below non-daylight service is a killer for people wanting to travel by rail.. Expand corridor services, and let the “land cruises” be operated by a private entity. Amtrak will flourish after said changes…
Anyone who does not “talk to the press” is guaranteed a bad press. For all the right reasons “the press” is a guarantor of accountability and Mr. Anderson is, in a sense, a government employee and thus subject to scrutiny.
It may be the top story, but it’s not a good one from the traveling public perspective. However, Amtrak’s fiscal performance appears to have improved. It makes one wonder what running a second NYP-CHI train on the LSL’s route that would offer daylight service among the cities of western NY, Erie, Cleveland,Toledo and CHI could do to enhance ridership and revenue, while providing better utilization of existing fixed cost infrastructure. I’d like to see real public transparency on Amtrak’s costs, particularly its indirect costs and how they’re allocated. Maybe the House and Senate will be interested in that, too.
And many of us have direct knowledge of other horrid examples to add to this excellent summary, which ends with the same questions it began with: “What the hell is going on here, where is the direction coming from, and what is the end game?”
The critics writing for Trains and Railway Age seem to think that Richard Anderson was hired to be some sort of “Chief Consensus Builder”.
He’s actually CEO, whose job is to *execute*. Anderson is not there to answer questions from fans.
Okay, so Mr. Anderson refuses to talk to the press. Well, what about Mr. Moorman? What does he have to say? After all, he supposedly handpicked this “airline executive” (wanted to say idiot or moron, but trying to watch my language) to be his successor. So what does he, who has freely talked to the press in the past, have to say about the disaster that has been Amtrak this last year? Has anyone asked him???
Al Dicenso – On your suggestion, I read both of Mr. Singer’s essays, and of course he is on to all the right questions, but we’ll probably need Woodward and Bernstein to do the investigative work to reveal, as I said in my first post to this Newswire article, “What the hell is going on?” Will a knowledgeable whistleblower please come forward? Also, as we all learned in high school, maximum effect is achieved if the paper is written, grammatically, in acceptable English. Either Singer or Railway Age or both need a proofreader, as does Trains Newswire from time to time. You know where this is coming from, Al.
From what I have read and heard about Mr. Anderson, my understanding is that he sees the future of Amtrak in the regional corridor service — which makes complete sense — except that under PRIIA Section 209 it’s the state governments that are in charge — and not Amtrak. The only way this could work would be for Amtrak to aggressively court state and local leaders in starting and expanding corridor service as part of a Amtrak-State partnerships — but I see no evidence of that.
In fact: my understanding is that many states are upset with Amtrak — including with its opaque accounting, where under Section 209 state’s get a bill with no itemizing of the actual expenses of the specific service the state is sponsoring. It is “this is the cost — so pay up”. I have also heard that Amtrak is uncooperative / uninterested in many state’s desire to actually improve service.
Amtrak acts like a monopoly corporation with captive customers — but I wonder if that will last; a.k.a. Virgin Trains USA? Starting a new intercity service without public support including start-up capital for construction would be very difficult for the private sector — but cherry-picking existing Amtrak corridors would not be as difficult, in fact that is Virgin Train’s business in the UK — operating franchise passenger services under contract with the British government.
Network Rail owns and maintains the infrastructure (tracks and stations) financially supported by the central government; while the private rollingstock leasing companies (ROSCOs) provide the train-sets — with the train operating companies (TOCs) like Virgin Trains paying both Network Rail and the ROSCOs for use of track and equipment, and then a premium to the British treasury for the rights to operating the multi-year fix-time franchises. It’s in some basic ways like Section 209, in that Amtrak is now a service provider to the government — but with competition.
Now for many corridors it would be difficult to ditch Amtrak because of the amount of Amtrak owned infrastructure utilized, including tracks, stations, and maintenance facilities. However, there are some Amtrak corridors where that is far less of a problem, for example the Boston-Portland ‘Downeaster’. I could imagine Virgin Trains USA coming in and making a good offer to the State of Maine to operate the service in lieu of Amtrak. Now the service would remain state supported — but Virgin could work to boost ridership and revenue, by providing more attentive, innovated, and entrepreneurial leadership, a service from which it would be paid by take its cut of revenues as its profit. Companies like Siemens and Bombardier could provide new train-sets by leasing them, just like the ROSCOs in the UK.
Also consider that many of the post-privatization train-operating companies including Virgin Trains where led by ex-managers of British Rail. We have already seen reportedly Brightline take on Gene Skoropowski formerly of Northern California’s Capitol Corridor and now with a lot of long-term Amtrak employees show the door — perhaps that talent could find new roles in competitors to Amtrak of state-supported intercity rail services?
Brightline, a “HrSR” intercity passenger service show what could be accomplished on every other Amtrak operated corridor across America. Virgin Trains USA can go to the states and point to Brightline, and their experience in the UK, and state that: “Hey, we can do a lot better than Amtrak”. While developing new private passenger services is the stated goal of Virgin Trains USA — becoming a direct competitor to Amtrak in providing Section 209 services could be an even more viable and complimentary business model.
If I could ask Amtrak CEO Richard Anderson a few questions: it would be about how he plans dealing with the Section 209 corridors and perhaps competition to operate those services, not just from Virgin Trains USA but other “train-operating companies” including First Group, DB, SNCF, and Hong Kong’s MTR which now operates the Crossrail franchise in the UK.
Perhaps it’s time to admit that Amtrak is needed in places and won’t be profitable as a whole. Put it under FRA as a national railroad passenger service authority led by a Executive Director/CEO with guidance from an advisory board. Move the headquarters out of Washington to St Louis or Kansas City, someplace away from the self-proclaimed “solons” in our nation’s capitol.
Read M.E. Singer’s two recent posts on the Railway Age website; they say it all. They can be found on Trainorders.com. Amtrak’s top executives are arguably incompetent when it comes to running a passenger railroad, and they are aided and abetted by cronies of Board Chairman Coscia and Sen Schumer, who are both in cahoots with real estate developers to gain their votes by giving them access to valuable Amtrak properties, as well as dangling the carrot of lucrative infrastructure projects such as Gateway in front of their construction union lackeys. Amtrak is rotten to the core, and needs total reform, top to bottom.