Should Amtrak forget long-distance and concentrate on the Northeast?

Imagine for a moment that you run a service business national in scope. Sales cover only about 80% of your operating costs and you have no hope of excess earnings that can pay for capital improvements. Roughly 56% of your customers are served in the Northeast, and 54% of your sales are made in the same region. Small investors cover the remaining operating costs and capital maintenance through an investment fund that is controlled by a board put up by the investors. Your business has never paid a dividend to its investors, who are almost insanely patient in waiting for you to turn a profit—until now.

Now also imagine that your investor fund has proposed that it will only fund losses through the end of the current fiscal year, and only enough to cover those losses incurred where the majority of your customers are served. If you agree to this proposal, you will have to close all of your service locations and lay off about half of your staff. On the other hand, the investor fund has hinted that it will support hefty capital investments to make the region self-sufficient and profitable by the year 2027.

What would you do, keeping in mind that the investors technically own the business and the fund may have the last word in any case?

Would you insist that your business plan is sound, and that given enough time—did I mention that you’ve already had over 40 years—you will turn things around and provide the kind of service envisioned in your original plan? Or would you agree with the fund and concentrate on the Northeast, where you have been assured by the fund that you will be their golden boy for the near future? Would you think that, just maybe, you can take the smaller business and parlay it back into a national or international success—if you should live that long?

Would you take whatever accrued vacation, sick leave, or severance you may have available and head for the farthest tropical island? Would you hire a lawyer?

Would you maintain the status quo and hope for the best?

You’ve probably guessed that the situation I’ve described above closely parallels Amtrak’s existence.

Amtrak’s newest CEO, designate Richard Anderson, scheduled to take full control on January 1, 2018, has been making noises like the best thing to do might be to concentrate on the Northeast. In an interview given to NPR last week, Anderson hinted and stumbled around questions concerning the future of long-distance trains in the U.S. Asked by interviewer Robert Siegel about the nature of strategic decisions he made as CEO of Delta Airlines and will make as Amtrak head, Anderson said, “It's the opportunity to make decisions that will improve the accessibility for urban areas around the U.S.”

Picking up on this, Siegel asked if that meant that the long-distance service is dead. Mr. Anderson responded with a rather convoluted explanation of the value to Amtrak’s bottom line of urban center to urban center trips of less than 750 miles, again strongly hinting that he believes Amtrak’s future is serving densely populated urban areas and not towns like, for example, Dwight, Illinois.

I only mention Dwight, because it has recently upgraded its Amtrak station in anticipation of the finalization of Illinois High Speed Rail (HSR) from Chicago to St. Louis, with Dwight an intermediate stop. So…hmm.

Mr. Anderson, from other answers given during the interview, also seems to feel that Amtrak already has HSR, in the form of Acela and the Northeast Corridor, even though speeds don’t even approach the kind of HSR available in Europe and Japan. “Tweaking” the Northeast seems to be one of his “innovative” strategic plans for Amtrak.

Also just last week, Rep. Mo Brooks (R – AL) attempted to attach an amendment to a House appropriations bill that would have cut off all federal subsidy for Amtrak. Rep. Brooks argued that it was fiscally irresponsible to continue funding Amtrak as the debt keeps climbing. Brooks expressed his belief that zeroing out federal funding would force Amtrak to become self-sufficient, when, in reality, it would simply force it to shut down, reducing any revenue stream it now has to zero, as well. Neither side of the aisle would have any of it, and the amendment was defeated 128-293 with even Republicans narrowly favoring it.

It seems to this writer that Amtrak is like a besieged castle where, for the most part, the enemy continues to allow enough supplies in to assure survival. Every so often, however, a few brave souls outside the walls get up enough gumption to take a run at the castle doors, or to throw a few ladders against the ramparts, and to put a log into the spokes of the supply wagons before they get inside. While these gumptious souls are usually soon dispatched, a la Representative Mo, it now seems that we may have a “little king” in the castle, one who is ready to open the doors for the next brave enemy fighter that takes a run at it, just as long as the enemy, once inside, lets him keep the parts of the castle he likes. They can have the rest.

Please feel free to let me know what you think.

©2017 – C. A. Turek – mistertrains@gmail.com

(Charles A. Turek is a writer and novelist based in Albuquerque, NM. After four decades working in areas of the insurance industry related to transportation, he now writes on all aspects of American railroading. Charles is a political conservative but believes in public funding of passenger rail as a part of the federal government’s constitutionally conservative obligation to provide for defense and public infrastructure so that private enterprise may flourish.)