This Week at Amtrak; July 31, 2009

This Week at Amtrak; July 31, 2009

A weekly digest of events, opinions, and forecasts from

United Rail Passenger Alliance, Inc.
America’s foremost passenger rail policy institute

1526 University Boulevard, West, PMB 203 • Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739, Electronic Mail info@unitedrail.org • http://www.unitedrail.org


Volume 6, Number 26

Founded over three decades ago in 1976, URPA is a nationally known policy institute which focuses on solutions and plans for passenger rail systems in North America. Headquartered in Jacksonville, Florida, URPA has professional associates in Minnesota, California, Arizona, New Mexico, the District of Columbia, Texas, New York, and other cities. For more detailed information, along with a variety of position papers and other documents, visit the URPA web site at http://www.unitedrail.org.

URPA is not a membership organization, and does not accept funding from any outside sources.

1) And, the hits just keep on coming. Here’s a Congressional, bipartisan press release from earlier this week.

[Begin quote]

Wednesday, July 29, 2009

Chairman Towns, Ranking Member Issa Call for Replacement of Amtrak’s ‘Interim’ IG

For immediate release: Wednesday, July 29, 2009

Contact: Oversight and Government Reform Press Office, 202-225-5051

Chairman Towns, Ranking Member Issa Call for Replacement of Amtrak’s ‘Interim’ IG

Lawmakers Question Amtrak’s Motives and Legal Basis for Appointing Temporary IG

WASHINGTON. D.C. – House Oversight and Government Reform Committee Chairman Edolphus Towns (D-NY) and Ranking Member Darrell Issa (R-CA) today in a letter to Amtrak Chairman Thomas C. Carper called for the immediate replacement of Amtrak “Interim” Inspector General Lorraine Green – a 12-year member of Amtrak management who intends to return to her former position when a new IG is appointed.

“We believe that the selection of a senior member of Amtrak management as Interim Inspector General undermines the statutory independence of the Office of Inspector General,” wrote the two oversight leaders. “Ms. Green’s actions during the time she has been serving as Interim Inspector General raise questions about her actual independence.”

The letter follows the June 18, 2009, forced retirement of former Amtrak Inspector General Fred E. Weiderhold, Jr. who had aggressively investigated and questioned the Amtrak General Counsel’s office for spending tens of millions of dollars on outside law firms. A bipartisan investigation by the committee has revealed longstanding and serious conflicts between Amtrak management and the Inspector General and major disputes about the role of the Inspector General within Amtrak.

“The independence of Amtrak’s Inspector General is critical to effectively weed out waste and fraud, especially now with increased stimulus spending at Amtrak,” said Chairman Towns. “By installing one of their own as Inspector General, it looks like Amtrak management is trying to take the teeth out of the watchdog.” “Amtrak has flagrantly disregarded the rules and expectations set forth by Congress to protect the independence of Inspectors General,” said Rep. Issa. “The brazen appointment of an ‘Interim’ IG confirms the existence of a problem within management that must be investigated.”

Chairman Towns and Ranking Member Issa note the interim Inspector General has quickly taken actions that may erode the institutional independence of the Amtrak IG office in demanding a response by July 31.

[End quote]

Where to begin on this one? First and foremost, Amtrak – even though it has pretended to be through the years – is not above the law. Amtrak is no longer flying below the radar, and everyone is expecting much, much better out of Amtrak than a stunt like this.

Second, it’s incredible to think Amtrak, which depends on Congress for its very existence, not to mention ongoing funding, and protection against everyone, would want to so annoy an important Congressional committee that this type of press release and related action would take place.

Third, what in the world has Amtrak’s Vice President, General Counsel, and Corporate Secretary Eleanor D. Acheson gotten the Amtrak Board of Directors into? She is supposed to be the legal eagle who stops nonsense such as this and provides allegedly sage advice to the company management and Board of Directors. This, however, seems like a major mistake which appears to be grounds for selecting a new general counsel who may be more familiar with the law as written. Also, what does the press release mean when it questions Ms. Acheson and the way the Amtrak General Counsel’s office has spent money on outside counsel like a drunk sailor? Does Amtrak have all sorts of money to throw around on buying outside talent for things which are supposed to be handled inhouse?

Amtrak is entering into a time of unprecedented spending systemwide. Now is not the time to relax the vigilance of the Inspector General’s office. If Amtrak is going to play with the big boys, then Amtrak is going to have to act like one of the big boys. The Board of Directors needs to move quickly to solve this problem and find themselves better legal advice and a new, robust, permanent Inspector General.

2) Andrew Selden of Minneapolis, Vice President of Law and Policy for United Rail Passenger Alliance, and President of the Minnesota Association of Railroad Passengers has some cogent thoughts on the delights and potential profits of first class service on passenger trains.

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There is more to train travel than coach seats and utility transportation

By Andrew Selden

Something to which almost any passenger rail observer would agree is Amtrak hasn't done very much to cultivate the first class dimension to its high revenue long distance services, and what it has done it hasn't done terribly well. One need think only of the sorry state of Amtrak’s dining car services, or the paucity and dismal condition of sleeping car accommodations, or even the complete absence of a family-oriented intermediate class of high-end coach service, to grasp that management does not value this business opportunity. Coach seats and utility transportation is about as far as Amtrak's vision extends.

The highly inconsistent character of service delivery in sleeping cars and diners, and the frequent service disasters occasioned by Amtrak's notorious equipment maintenance practices, undermine whatever chance might have existed for the brand "Amtrak" to denote a quality travel experience. Contrast your – or the public's – visceral reaction to the brand "Carnival" or "Hyatt" or "Disney" to the customary reaction to "Amtrak" to get a sense of the depth of the problem.

But this sad history need not doom the future of quality rail transportation.

Companies which prosper are usually ones focusing intensely on a core competency. Amtrak has competencies, but operating a consistently good-to-high quality rolling hotel or land-cruise experience, whether for experience-oriented travelers, or just serious business or middle-class personal travelers, would not be among them. That does not mean such rail services cannot be fielded on commercially successful terms. It suggests only Amtrak may not be the right entity to provide them.

We are not talking about replicating the famous world-class service of South African Railway's Blue Train, or the analogous effort by the now-defunct American Orient Express to provide a roving five-star cruise train.

What we have in mind is fielding a daily, regular route, and consistently good quality and reliable "Marriott" or "Hilton" level of rail service, not necessarily a "Four Seasons" or "Ritz Carlton." This would be a service which consistently hits the needs and expectations of the American middle class, especially families and business travelers.

But, Amtrak need not be the entity which owns, markets or operates the service, even if it would continue to be the company which owns the relationship with the host railroads and operates the trains.

Amtrak can leverage those de facto monopoly rights to develop an entirely new haulage business where about all it has to do is run the train and collect the fees from someone else whose core competency is providing consistently good quality hospitality services which appeal to American middle class needs and expectations.

Who might that be, and what would the relationship to Amtrak be?

Well, who does that sort of thing now? It's a surprisingly long list which includes such great hospitality providers as Marriott, Carnival, and Disney, and foreign companies such as Veolia (France) and Forte (UK). That is what they do – provide consistent and consistently good quality hospitality services, all in a travel and transportation environment.

History even offers us a well-proven model for what the relationship with Amtrak might look like: the Pullman Company, which operated its own sleeping, dining and parlor cars which were attached to trains owned and operated by a host railroad. They did what the host railroad could not do, or at least could not do as well: offer a predictable and good quality hospitality service associated with getting somewhere by rail.

But we do not propose re-inventing the Pullman Company. This is emphatically not "Back to the Future" in the 19th Century.

Rather, what we envision is a relationship founded on a much more sophisticated modern business relationship modeled after modern business franchise principles. Big-name companies today franchise concepts and capabilities to each other all the time. A brand name hotel company may own franchised restaurants to add food service that the hotel company is ill-suited to offer its guests. Airports and airport food service providers do the same. A resort developer will acquire a franchise from a well-known hotel chain to put lodging into the resort development. Trunk airlines in effect franchise their brands and reservation systems to regional carriers to operate feeder routes into the big carrier's hubs.

So, what we envision is for Amtrak to enter into a franchise in which an outside company would contract to provide the onboard service experience in the sleeping and dining cars on Amtrak's overnight trains.

An experiment is called for to test the viability of the idea. To do that, we would enter into similar arrangements on two long distance routes, one of which would have the outside provider operate the service under its own brand identification, and another where the provider (which could be the same company, or someone else) would operate the service, but do so under the Amtrak brand (or, maybe a slightly different brand such as "Amtrak Premier"). These operating contracts would be negotiated and awarded on a basis unfamiliar to Amtrak – genuine competitive bidding. The experimental contracts would be for a short period of time, perhaps 18 to 24 months.

The "control" for the experiment would be a similar long distance train that continued to operate under traditional Amtrak stewardship. Then, we examine the results.

For example, we could contract the sleeper and diner services on the Silver Meteor to Carnival; on the Southwest Chief perhaps to Marriott. The Empire Builder – currently Amtrak's best and by far its highest revenue train – would serve as the "control."

These experiments would not breach any legal or contractual constraints. The contractors can use Amtrak labor, as long as they have administrative authority over them. And, the franchise relationship would keep the contracted service squarely under Amtrak's ultimate responsibility for purposes of statutory requirements, and the comfort of the host railroads.

Staying on the current arrangement is plainly insane – one simply cannot continue endlessly repeating the same actions, yet, expect different, and better, results. So, the cost and risk of not experimenting with a promising alternative is greater than the lost opportunity value of the status quo. In short ... it's worth a try.

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3) There were several good responses to William Lindley’s stations article in the last edition of This Week at Amtrak. A gentleman from the North Carolina Department of Transportation Rail Division directed us to that state’s web site (www.bytrain.org) which has an extensive section on station improvements. North Carolina has been living the dream of both restoring historic, and building new and improved stations, throughout the state.

We also heard from a longtime TWA reader about the atrocities committed against Cleveland’s Terminal Tower and Cleveland Union Station. This landmark monument to the glory of passenger railroading in the early 20th Century has been permanently disabled as a passenger station by the erection of a federal office building on a piece of land where station tracks used to be, similar to the unforgivable situation in Kansas City.

Mr. Lindley also touched on the calamities happening in Denver, and we will have more on that later.

4) We have also had a pleasant response to our TWA contest to name as many stations as possible in the Amtrak system where local or state monies have gone to fix up or build local stations, only to have Amtrak either completely stop passenger service to those stations, or severely curtail service after huge amounts of non-Amtrak monies were spent. Please, continue to send in your contributions to this list to info@unitedrail.org so we may complete the list of stations.

5) The furor over Amtrak’s Gulf Coast Service Report doesn’t seem to be going away. Instead, many who benignly accepted whatever Amtrak had to say on any given subject seem to be understanding differently. It’s just possible Amtrak went one step too far in this instance.

Many former Amtrak True Believers are girding themselves for the upcoming Pioneer route restoration and North Coast Limited route restoration reports coming soon, wondering if the same type of illiterate conclusions will be drawn by Amtrak in those reports as the Gulf Coast report.

One interesting note has come up: Amtrak apparently isn’t in a hurry to help itself. A report on restoration of some Midwest service has been postponed for a year; Amtrak says it’s just too busy to get the report out. Gee, it must be nice to have so much to do it can’t produce reports on restoring or creating new service, especially since someone else is usually paying for these reports. But, hey, we wouldn’t want those hard working folks in Amtrak’s planning department to have to lose any sleep or work late on a Friday evening. After all, it’s just public money we’re talking about here and fulfilling Amtrak’s mission of being a national passenger railroad, nothing really important in the world of Amtrak.

6) No good deed goes unpunished, even in Canada. VIA Rail Canada went through a short, two day strike by some of its union employees last week, and the company felt so bad about the adverse publicity and inconvenienced passengers, it decided to do something nice and offer huge discounts to lure passengers back. VIA offered up to a 60% discount on regular-fare tickets throughout the country.

It seems the response is so huge, all of VIA’s telephone lines into its reservations centers have been jammed for days, and VIA’s Internet res system has practically broken down under the demand. Enterprising Canadians have been lining up at VIA’s station ticket counters, with some lines in major cities such as Toronto blocks long.

Who says nobody wants to ride a train?


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J. Bruce Richardson
President
United Rail Passenger Alliance, Inc.
1526 University Boulevard, West, PMB 203
Jacksonville, Florida 32217-2006 USA
Telephone 904-636-7739
brucerichardson@unitedrail.org
http://www.unitedrail.org