Gleaning Insights Into Amtrak’s Anderson

Amtrak CEO Richard Anderson is not one for giving interviews so much of what we know about his views of the future of his railroad must be gleaned from his public behavior and statements made in Congressional hearings.

Richard Anderson

The Wall Street Journal recently published a profile of Anderson that portrayed him as being stubborn, focused and the type of person who loves a good fight.

The article mentioned a June 2018 meeting that Anderson had with a group of six U.S. senators and one congressman about the fate of the Chicago-Los Angeles Southwest Chief.

At the time, Amtrak was proposing operating the train between Chicago and Dodge City, Kansas; and between Los Angeles and Albuquerque.

Passengers would ride a bus for the 475-mile gap between Kansas and Albuquerque.

The sticking point was Amtrak’s refusal to pay to install positive train control on the BNSF route over Raton Pass near the Colorado-New Mexico border.

BNSF has little to no freight traffic on the route and won’t pay for it and Anderson told the lawmakers that the PTC issue was for Amtrak a “math problem.”

Anderson repeatedly insisted Amtrak would implement “alternative solutions.”

The Amtrak CEO’s intransigence angered Senator Martin Heinrich of New Mexico. He angrily walked out of the meeting after saying, “These are not solutions. “These are not solutions our constituents deserve!”

The newspaper suggested the meeting illustrated how Anderson’s doggedness can become arrogance.

“There was zero deference [on Anderson’s part],” the newspaper quoted one person who was in the Southwest Chief meeting as saying of Anderson.
As it turned out, the senators pushed through a clause in Amtrak’s fiscal year 2019 appropriation mandating the Chief to remain an all-rail operation until at least Sept. 30, 2019.

There are a number of takeaways from the article that provide some insight into Mr. Anderson’s thinking.

He came to the passenger carrier determined to cut costs, streamline operations and reduce Amtrak’s deficit.

In short, Anderson is laser focused on efficiency, increasing revenue and seeking to do something that has never been done at Amtrak in its 48-year history even if his predecessors often talked about it: Breaking even.

The article suggested that Anderson was brought aboard at Amtrak after an airline career that included serving as CEO at Delta and Northwest specifically to stabilize the railroad’s finances and improve its reliability.

Anderson said that by cutting costs and teasing new revenue from the carrier’s commercial partners Amtrak could reduce its operating loss from $170.6 million in 2018 to zero by 2021.

The article said Amtrak’s annual adjusted operating loss, which excludes capital expenditures and some other costs, will fall to zero over the next year.

“We took many steps to streamline the company so that we could free up investment in the core product,” Anderson in an interview with a WSJ reporter.
The carrier has been building up cash as it prepares to invest in infrastructure repairs and new equipment.

Anderson is not opposed to public funding and noted that all modes of transportation benefit from it.

He told the WSJ reporter in an interview that he knows from his experience in the airline industry about dependence on government-funded infrastructure.

“No one thinks twice about the fact that the federal government maintains the locks and dams system on the Mississippi River, right?” he said.

As Anderson sees it, what is at stake is credibility with Congress. That, in turn, will result in a greater likelihood that lawmakers will agree to requests for funding for new rail passenger cars and infrastructure projects in the Northeast Corridor.

He also argues that if Amtrak is in a better financial position it will be better able to attract private investors to help fund those projects.

Next year Congress will take up reauthorizing Amtrak and there are bound to be conflicts over its finances and the level and type of services that it provides.

In Anderson’s eyes, the Northeast Corridor is profitable and the long-distance routes are not. Hence, Anderson may believe that the latter are a barrier that needs to be surmounted to reach the break-even point if not profitability.

Critics have taken issue with Anderson and Amtrak’s assertions of how profitable the Northeast Corridor is and how much money the 15 long-distance trains lose. But that is a debate for another time.

The WSJ article listed a number of cost cutting measures that Anderson has imposed since coming to Amtrak in July 2017.

It has quit some travel industry trade groups, cut nearly 200 consultants and ended 400 management positions in a 2017 buyout.

Scores of phone and fax lines were removed and Anderson canceled a plan to spend hundreds of millions of dollars building a dedicated wireless network along the Northeast Corridor to improve Wi-Fi service.

He also discarded a project to place TV screens in the seat backs of Amfleet cars.

Some cost cutting moves have raised the ire of unions representing Amtrak workers including the closing of a California call center and plans to reduce the ranks of the Amtrak police department.

Private car owners howled in protest when Amtrak increased charges to carry private rail cars and sharply decreased the number of stations at which private cars could be added or removed from a train.

As Anderson saw it, doing the latter at intermediate points was a source of delay to Amtrak trains.

And, of course, there is the on-going fight over the carrier’s long-distance trains.

Anderson acknowledged that he hasn’t won every battle.  “Everything takes longer than I want it to take,” he said.

The article portrayed Anderson as unapologetic about his efforts to force Amtrak to change and his willingness to forge his own path forward even if that makes him something of a lone wolf.

While at Delta he pulled the airline out of an industry trade association because he disagreed with its position of privatizing the air traffic control system in the United States.

Safety has been a major concern of Anderson’s but his airline centric views have raised hackles in a railroad world used to doing things in certain ways.
Anderson has pushed Amtrak’s host railroads to work harder and faster to install and implement positive train control systems.

Under his watch, Amtrak has sought to borrow some safety practices from the airline industry, notably imposing a no-fault method of reporting risks and near misses.

But implementing another proposal that Anderson favors will require talking the Federal Railroad Administration into changing its rules. That could be a tall order.

The FRA prohibits the use of cell phones, tables and screens in locomotive cabs, arguing that they could be a distraction to locomotive engineers who must remain focused on the track ahead of them.

Those rules were adopted after cell phone use and texting were implicated in a series of fatal accidents.

Anderson believes that tablets containing moving map displays would help locomotive engineers in the same manner that use of tablets in airplane flight decks provide pilots with weather alerts and other advisories.

Yet one locomotive engineer quoted by the WSJ who opposes the idea underscored the challenge facing Anderson in trying to change railroad safety culture. “A cow can’t walk in front of you at 30,000 feet,” he said.

Tags: Amtrak, Amtrak finances, Richard Anderson