Posts Tagged ‘Stephen Gardner’

Gardner Named Amtrak President

December 1, 2020

Amtrak said on Monday that one of its vice presidents will become its president on Dec. 1.

Stephen Gardner

Stephen Gardner, currently Amtrak’s executive vice president and chief operating and commercial officer, will replace William Flynn.

Flynn, who became Amtrak’s president and CEO in April, will remain with the passenger carrier as CEO and a member of its board of directors.

The promotion of Gardner to president had been widely expected by many rail industry observers.

Railway Age reported that Gardner has been making most of the major decisions and setting policy during his time as an Amtrak senior vice president.

His elevation to the president’s chair coincides with the election of Joseph Biden as president. Gardner, like Biden, is a Democrat.

Earlier in his career, Gardner served in staff positions for Congressional Democrats on Capitol Hill, including Delaware Senator Tom Carper.

He joined Amtrak in 2009 after having helped develop railroad and transportation policy for the U.S. Senate Committee on Commerce, Science and Transportation.

Before coming to Washington, Gardner worked for Guilford Rail System (now Pan Am Railways) and the Buckingham Branch Railroad.

Railway Age said Gardner is widely recognized as one of the principal authors of the Passenger Rail Investment and Improvement Act of 2008.

The magazine said Gardner was unlikely to become Amtrak’s president so long as Republicans controlled the White House and the Department of Transportation.

In a prepared statement, Amtrak said the change in leadership was “part of a broader set of actions taken . . . to ensure that Amtrak is well positioned for success in fiscal year 2021 and beyond.”

The statement said Gardner will lead day-to-day operations and oversee marketing, operations, planning, government affairs, and corporate communication.

Historically, Amtrak’s president has been its top executive, but during the tenure of the late Joseph Boardman the company added the CEO title to his duties.

Amtrak’s statement said the carrier faces “two urgent challenges in 2021” including weathering the COVID-19 pandemic and bolstering Amtrak’s future.

Amtrak’s presidency has been a revolving door in recent years with no one person holding the position for more than a few years.

Charles “Wick” Moorman, a former CEO of Norfolk Southern, came out of retirement in 2016 to serve as Amtrak president and CEO in what at the time was described as a transitional appointment.

Moorman became co-CEO of Amtrak with Richard Anderson in June 2017, an arrangement that continued through the end of 2017.

Anderson, a former CEO of Delta Air Lines, served as Amtrak’s top executive until being replaced in April 2020 by William Flynn, a former CEO of Atlas Air.

Amtrak Lost $801M in FY2020

November 24, 2020

Amtrak warned yet again on Monday that further service cuts are possible unless Congress increases its federal funding for the passenger carrier in fiscal year 2021.

Funding for Amtrak and other federally-funded programs is currently being provided under a continuing resolution approved by Congress in late September that expires on Dec. 11.

That resolution calls for interim funding in FY2021 to be at the same levels as FY2020, which ended on Sept. 30.

“If the current level of funding is extended in a continuing resolution beyond Dec. 11 . . . and supplemental funding isn’t provided we’re going to be unable to avoid taking fairly difficult actions that could have long-lasting effects on our Northeast Corridor infrastructure and the national rail system,” said Amtrak CEO William Flynn.

Flynn said the carrier needs additional emergency funding for the remainder of the fiscal year.

If Amtrak funding continues at its current levels, Flynn said as many as 1,600 workers operating state-supported trains could be furloughed.

Amtrak Senior Executive Vice President Stephen Gardner said decisions on job and service cuts will be made based on how long the uncertainty remains.

In a news release, Amtrak said during FY2020 its operating revenue, including payments from state-supported routes, decreased 31.9 percent to $2.3 billion when compared with FY 2019.

Ticket revenue was down $1.24 billion or 47.3 percent.

During FY2020 Amtrak posted an unaudited operating loss of $801.1 million, which it attributed largely to lost ridership during the pandemic.

The carrier also reported advancing $1.9 billion in infrastructure and fleet work.

Amtrak Board Chairman Anthony Coscia said the passenger carrier projects that under current trends and future projections, ridership and revenue are expected to be down 63 percent by the end of fiscal 2021.

That would be worse than the 50 percent decline Amtrak management had predicted earlier when it announced its plans to reduce the operating frequency of most long-distance trains to tri-weekly.

Coscia said Amtrak intends to move forward on $2 billion in critical infrastructure work “that includes safety and reliability measures that we believe will permit the company to come through the pandemic with a railroad that was playing and will play in the nation’s economic recovery.”

He said Amtrak has more than $5 billion of additional investments that could contribute to recovery following the pandemic.

Amtrak said it provided 16.8 million customer trips in FY 2020, down 47.4 percent with a year-over-year decline of 15.2 million riders.

In recent months, ridership has dipped by 20 to 25 percent of pre-COVID levels.

Amtrak Execs Defend Move to Tri-Weekly Trains

August 18, 2020

Amtrak management is not counting on Congress to direct it to continue operating its long-distance trains on daily schedules this fall and winter but will maintain the status quo if so directed by lawmakers.

In an interview with Trains magazine, Amtrak President William Flynn and Senior Executive Vice President Stephen Gardner said the carrier has not developed contingency plans to operate its long-distance trains daily after October when it will be implementing tri-weekly service on all routes except the Auto Train.

“I don’t envision a situation where Congress is giving us something above the $3.5 billion,” Gardner said, “And they are not being fairly clear about what they expect in terms of operating levels.”

He was referring in part to Amtrak’s request for $1.475 billion in supplemental funding on top of the carrier’s $2.04 billion budget request for federal fiscal year 2021, which begins Oct. 1.

The House has approved $10 billion in funding for Amtrak in FY2021 along with a mandate to continue daily service on all routes that have it now.

However, the Senate has yet to act on the FY2021 appropriations bills. The Rail Passengers Association reported last week that Congressional hearings on Amtrak funding may be held in September.

“If Congress directs us to operate a seven-day service we will,” Flynn said.

But he warned that if Congress doesn’t provide suitable funding Amtrak will “have to make additional cuts to the workforce, and it would certainly affect our capital plans and suggest reductions on the Northeast Corridor and perhaps elsewhere on the national network.”

Flynn said Amtrak has not developed contingency plans for operating a daily long-distance network past October.

During the interview, both Amtrak executives defended the move to tri-weekly service with Gardner saying the situation this year is quite different than it was in 1995 when Amtrak reduced the operation of several, but not all, long-distance trains to tri- and quad-weekly after a consulting firm recommended that as a way to save money during a budget crunch.

A Government Accounting Office report later noted that the projected savings largely failed to materialize as expected because some costs did not fall as much as expected.

“We feel good about being able to save significant dollars for a limited period, and that makes sense because demand is so low,” Gardner said.

Amtrak has projected that operating long-distance trains at tri-weekly levels will yield a savings of $150 million.

Gardner, who serves as Amtrak’s chief operating and commercial officer, acknowledged that tri-weekly operation of trains is not ideal.

“Three days per week is not a good solution in a normal revenue environment [but] we’ve done our homework,” he said.

Trains also reported on Monday that earlier versions of the metrics Amtrak said it will use to determine when to return long-distance trains to daily operation were rejected by Capitol Hill staffers.

The staffers apparently proposed using metrics including airport bookings along long-distance routes and system-wide percentage drops in ridership since April.

Those suggestions also sought to chart long-distance ridership from October to May, something the Trains report said would overlook the strength of holiday-period travel.

Amtrak revenue in July was down 82 percent when compared with July 2019.

The 15 long-distance trains contributed 54 percent of the ticket revenue and long-distance trains income was down 61 percent when compared to July 2019.

Northeast Corridor revenue was down 93 percent and state-supported revenue was off 83 percent.

In the meantime, Amtrak has ceased selling sleeping car space starting Oct. 5 on the days that long-distance trains will not operate.

A statement issued by Amtrak on Monday said the carrier hopes to restore some or all long-distance service to daily operation in 2021, but that will hinge on adequate federal funding in FY2021 and at this point it is unclear how much money Amtrak will receive.

Amtrak Looking to Beyond Pandemic

April 6, 2020

Amtrak executives expect to return service to normal levels gradually once the worst of the COVID-19 pandemic is over.

Senior Vice President Stephen Gardner told employees during a town hall meeting late last week that restoring service after the pandemic will be a challenge because the railroad doesn’t know how quickly demand will recover.

Some services might see strong demand once the public begins to travel again.

Also addressing the town hall was incoming Amtrak President William Flynn, who will replace Richard Anderson on April 15.

“We’re planning for several scenarios where the recovery pattern might be different in specific regions — gradual or a big jump,” Flynn said.

Trains magazine obtained a copy of the town hall meeting and reported some of its contents on its website on Monday.

Gardner said Amtrak will work with states that fund corridor service to determine “how much service we have on routes they help support.”

Flynn was introduced during the town hall by Anderson.

The next Amtrak CEO lauded Amtrak employees for their diligence during the pandemic, particularly those who handled the derailment of the northbound Auto Train on March 26.

Flynn pledged to avoid furloughing Amtrak workers during the pandemic.

Anderson said Amtrak’s overall bookings have plunged by 95 percent with ridership in the Northeast Corridor down 98 percent, state-supported service down 93 percent and long-distance ridership declining 87 percent.

Amtrak’s daily train frequencies have been slashed from 309 to 156, with 77 percent of the Northeast Corridor service suspended.

There are just 10 trains boarding and discharging passengers from New York to Washington and four from New York to Boston.

Gardner said Amtrak has no plans to screen passengers for COVID-19.

“We are not qualified to undertake mass testing (and) we don’t have the ability to control who is coming on board once they purchase a ticket, but we can reinforce the good guidance that’s out there and we will work with   . . . officials to help them implement health checks should they be required,” said.

With ridership on long-distance trains down Amtrak is no longer practicing communal dining in its dining cars. Gardner said there is no need to seat passengers not traveling together at the same table.

Top Amtrak Executives to Take Pay Cuts

March 23, 2020

Amtrak said over the weekend that it is taking what it termed aggressive steps in the wake of the COVID-19 pandemic, including reducing the salaries of its top executives.

For now Amtrak CEO Richard Anderson said Amtrak will not lay off employees.

An internal memo sent by Amtrak Senior Vice President Stephen Gardner said incoming President William Flynn will not draw his Amtrak salary during the crisis.

Gardner said Amtrak faces a loss of $1 billion due to plunging bookings and widespread cancellations of existing reservations.

The intercity passenger carrier has asked the federal government for a supplemental appropriation to cover lost revenue.

The pay cuts will take effect April 1. Flynn is scheduled to replace Anderson in the CEO chair on April 15.

Amtrak will suspend its its 401(k) matching contribution for management employees through the end of the calendar year.

“We recognize these actions have a serious impact on our employees and their families,” Gardner said in the memo. “But we are taking this action to help protect everyone. We appreciate your support as we work our way through this crisis together.”

Other measures being taken by Amtrak include ending all non-safety-critical hiring; cutting discretionary travel, professional fees, and advertising spending; and deferring non-priority capital expenses.

In a dial-in town hall meeting for Amtrak workers held on Friday, Anderson said the carrier is seeking to avoid involuntary furloughs.

The carrier will meet a commitment in current labor agreements granting employees a 3.5 percent pay increase on July 1, but Anderson called for union leaders to consider delaying but not cancelling the increase until Amtrak ridership recovers.

Anderson hinted that if the unions balk at delaying the pay raise the carrier might revoke its non-layoff stance.

“General chairmen need to get engaged and figure out how to do this if we are to avoid an involuntary furlough, given that we don’t have any business anymore,” Anderson said.

“We have been through a lot of tough times with Amtrak—from host railroads that want to put us out of business, to presidents who don’t want to fund us, to [a] Congress that doesn’t always want to properly fund us, and to states and private companies that would like to take over our services,” Anderson said.

He said Acela ridership in the Northeast Corridor has fallen by 92 percent, Acela reservations are down by 99 percent and bookings for long-distance trains have declined by 64 percent.

Anderson expects those numbers to worsen as additional government imposed restrictions are placed on personal mobility.

“On 9/11, we knew specifically what the root cause of the problem was at the time, [and] the transportation system recovered fairly quickly,” Anderson said. “In this instance, we don’t have clear direction of what the end point of the coronavirus is.”

Amtrak has more than $3 billion of cash on hand but Anderson said the carrier must continue to pay operating expenses and pay interest on its existing loans.

It has halted spending on capital projects except those needed to keeping trains moving.

“By any measure, the economy is in recession,” Anderson said. “We can’t just count on Congress to close our gap.”

Saying there is no reason to operate empty trains, Anderson said Northeast Corridor service has been cut by 40 percent and 10 routes have reduced service with more service cuts coming.

Although the long-distance network will remain intact, Anderson said 40 percent of its seat capacity has been removed in the form of operating fewer rail cars.

“We need to be aggressive in preserving our cash,” Anderson said.

“I’m certain that the long-distance network will be very different longer term,” he said. “Over the past three or four years, it has taken more than $2.5 billion of federal money to keep the long-distance network operating, and if we don’t have the subsidy from the Northeast Corridor and state [supported corridor] trains bearing their share of the national network, the loss gets that much bigger.”

Anderson acknowledged that the steps Amtrak has taken are “demoralizing,” but said it would be be more demoralizing to tell people they don’t have a job anymore.

“That’s what we are working to avoid. If we just stood here and didn’t do anything, and one day in July or August we told everybody that the company was near liquidation and that we were going to lay off 10,000 or 15,000 people, that would be far more demoralizing. That would be irresponsible,” Anderson said.

In the meantime, Amtrak announced it will suspend all Acela Express service in the Northeast Corridor on Monday.

Northeast Corridor service will be covered by a schedule of Northeast Regional trains operating at 40 percent of the regular weekday schedule.

Until now Amtrak had suspended only a small number of Acela Express trains.

Acela service carried 3.5 million in 2019 of the 12.5 million ridership in the Northeast Corridor.

Other service cuts today are set to be implemented in California and North Carolina.

Pennsylvania Congressman Challenges Amtrak’s Depiction of How Well it is Doing Financially

March 6, 2020

An Amtrak vice president found himself under fire Wednesday by a skeptical congressman who expressed doubt that Amtrak’s finances are as strong as the carrier says they are.

Rep. Scott Perry (R-Pennsylvania) told Amtrak’s Stephen Gardner that he took issue with Amtrak’s description of its finances.

Perry said $235 million that states provide to Amtrak to operate corridor services are subsidies and not passenger revenue.

He also expressed doubt about Amtrak’s claim that it is close to breaking even on an operating basis.

In particular, Perry said Amtrak’s net revenue figures fail to account for $870 million in depreciation in 2019. “This represents a loss of over a billion dollars,” Perry said.

In response, Gardner, who is a senior vice president and chief operating and commercial officer, said the payments are “very transparent.”

He said depreciation is “a cost primarily associated with our vast Northeast Corridor infrastructure funded by the federal government.”

A analysis posted on the website of Trains magazine said Gardner was in effect admitting that the full costs of operating trains in the Northeast Corridor don’t enter into the profit-loss equation that Amtrak presents.

The exchange occurred during a meeting of the House Railroads, Pipelines, and Hazardous Materials Subcommittee.

The committee heard from six witnesses as it continues to work toward approval of surface transportation renewal legislation. The current surface transportation law expires on Sept. 30.

Rep Steve Cohen (D-Tennessee) continued to complain about Amtrak’s onboard dining services, saying he still hasn’t received any survey data from Amtrak that justified food service downgrades on eastern trains.

That comment was in reference to Amtrak’s replacement of full-service dining cars on overnight trains in the East, Midwest and South with a service now known as flexible dining.

Sleeping car passengers are served food prepared off the train in lieu of meals freshly prepared aboard the train.

Cohen said all he has heard from Amtrak passengers is that they don’t like the food, which is heated in a microwave oven.

“Millennials may like to look at their phones, but they don’t like bad food either,” Cohen said. “You need to put that back and attract more customers.”

In response Gardner said Cohen should receive the survey information by the end of the week.

“We have a variety of different services, and that requires us to experiment and try new ways to meet the requirements and needs of our traveling public,” Gardner said.

“We will continue to experiment to find the right mix, the right balance. For sure we know passengers expect a much broader set of food options — healthier choices than the historic railroad menu that had been offered. We also know people prefer a variety of different environments to eat in; it’s become quite clear that many people prefer to be served in their own rooms or to be able to use the dining car in a more flexible way.”

During his testimony Gardner appeared to contradict the feasibility of a plan put forth recently by U.S. Secretary of Transportation Elaine Chao that Amtrak should repair the tunnels leading into New York City from New Jersey beneath the Hudson River before building a new tunnel.

Amtrak and various public agencies in the two states have been seeking federal funding for a massive multibillion project to upgrade infrastructure in the Northeast Corridor.

The Gateway project includes building new Hudson River tunnels.

But federal officials have been resisting giving the project federal grants and have suggested the states need to greatly increase their financial contribution to the project.

Gardner initially tried to duck being critical of Chao’s proposal before finally acknowledging during questioning that he didn’t think rebuilding the existing tunnel before building a new one was a viable idea.

“We have to be able to excavate the current track structure, repair the drainage underneath, and inspect the tunnel lining — which hasn’t been looked at, frankly, in 109 years,” Gardner said.

“To do that during a four-hour slot in the evening or on a 55-hour weekend outage scenario could present incredible difficulty … which is why we have always proposed to do a full rehabilitation of the tunnels once new tunnels are in place, allowing us to maintain all of New Jersey Transit and Amtrak service.”

Rep. Stephen Lynch (D-Massachusetts) ripped Amtrak for using non-union contractors at a Chicago worksite.

“It shakes my confidence in Amtrak … With all the challenges we have,” Lynch asked, “do you really want to pick that fight to try to save a couple of bucks by bringing in workers who don’t have ongoing regular training on rail systems? As an iron worker, it’s a very different environment when you’re working on a live transportation system.”

Lynch is a former iron worker and organized labor official.

Anderson Might be Leaving Amtrak in 2020

January 3, 2020

Buried in a recent Wall Street Journal article about the challenges that Amtrak faces in 2020 was for some a potential bit of good news.

The president and CEO that many rail passenger advocates love to hate, Richard Anderson, may be leaving the company this year.

The article said Anderson’s potential departure is among the challenges Amtrak is facing this year.

Although no details were provided in the Journal article, Anderson is reported to have a three-year contract that expires this year.

Anderson, 64, a former Delta Air Lines CEO, came to Amtrak in June 2017 and for several months served as co-CEO along with the now retired Charles “Wick” Moorman.

Amtrak Chairman Anthony Coscia would not comment to the Journal about Anderson’s potential departure other than to say the passengers carrier “takes succession planning very seriously, and its ability to attract world-class CEOs also brings with it the responsibility to assure there’s continued leadership at that level.”

Whether Anderson continues to lead Amtrak through and past 2020 may not matter if the carrier continues on its current path of emphasizing the pursuit of profitability or at least break-even operation.

Amtrak has touted its fiscal year 2019 operating loss of $29.8 million as the best financial performance in Amtrak’s nearly 50-year history.

Anderson has repeatedly spoke of breaking even in 2020, although it should be noted Amtrak counts its federal funding as revenue.

The Journal article noted that some members of Congress have been critical of Amtrak’s financial strategies, saying the carrier’s overall service has suffered.

Although Anderson doesn’t give many interviews, in those that he has, including with the Journal, he has spoken about shoring up Amtrak finances as a way to gain credibility in Congress so it can ask for and receive millions if not billions of new money for capital projects, including replacement of aging tunnels and other infrastructure in the Northeast Corridor.

Amtrak’s future will be a major topic of conversation in Washington this year because Congress may act on a new multiyear highway bill that is expected to include reauthorization of the federal grant programs that fund Amtrak.

The reauthorization, which would replace the current FAST Act, may contain policy directives that govern Amtrak’s operations.

The FAST Act expires in 2020. It is a five-year surface transportation law that funds road, rail and transit programs.

The Journal article noted that some Capitol Hill observes are skeptical that Congress will be able to agree on a new transportation bill during a presidential election year.

They base that on the reality that raising the gasoline tax will be part of that discussion and many lawmakers are loath to do that.

The federal gasoline tax funds most highway construction and has not increased since 1993.

Anderson and senior vice president Stephen Gardner, who may be Anderson’s replacement if he steps down, have articulated a vision in which Amtrak downgrades long-distance routes in favor of shorter corridor services between major population centers.

Although Anderson has spoken about retaining some long-distance routes as experiential services, he has also indicated that the passenger carrier may seek congressional approval this year to experiment with restructuring at least one long-distance route.

In an interview with the Journal, Amtrak Chairman Coscia sought to frame the changes Amtrak is eyeing as a way to provide better service to underserved regions.

“What we’re after here is the person who lives in Atlanta or Charlotte, who doesn’t have train service,” Mr. Coscia said. “The person who has to wake up at 3 in the morning in Cleveland to take a train.”

Amtrak management has yet to formally release a plan for doing that although Anderson has hinted that in advance of congressional action on a new Amtrak authorization the passenger carrier will release more specific details about its plans.

Amtrak Holding Firm on PTC View

April 12, 2018

Amtrak is doubling down on an assertion made earlier this year to Congress by its CEO Richard Anderson that it will not operate on routes that are required to have positive train control but which fail to make the deadline to installing it.

Amtrak’s executive vice president and chief commercial officer, Stephen Gardner, told a House Appropriations Committee hearing that Amtrak still has not decided if it will use routes that are not required to have PTC.

Gardner said the passenger carrier continues to study whether it can safely operate on PTC-exempt routes, which tend to be on regional railroads.

He acknowledged during the hearing that Amtrak’s Chicago-Los Angeles Southwest Chief might be adversely affected by the PTC issue.

However, Gardner qualified his testimony by suggesting that Amtrak might use routes that receive an extension from the Federal Railroad Administration of the Dec. 31, 2018, PTC deadline that is mandated by federal law.

As did Anderson, Gardner said there will be segments of routes used by Amtrak over which the carrier won’t operate if a PTC waiver has not been obtained by the host railroad.

“ . . . We believe PTC is part of a modern passenger rail system and we want to see PTC levels of safety across our network. We’re going to be analyzing those areas where safety improvements can be made,” Gardner said.

When pressed by Rep. Pete Aguilar (D-California) about the Southwest Chief, Gardner said Amtrak “will provide service on the portions of the route that have PTC, but there may be parts of our network where we believe PTC is required – if that route has high operating speeds – and we want to make sure we have a single level of safety across our network.”

Gardner said Amtrak route safety assessment will conclude this summer.

The Southwest Chief route is required to have PTC between Albuquerque and Lamy, New Mexico, where Amtrak shares tracks with Rail Runner commuter trains.

However, the route between Lamy and Trinidad, Colorado, is exempted. The former Santa Fe route used by the Chief across Kansas, Colorado and New Mexico has an automatic train stop system that dates from the 1920s.

It requires a locomotive engineer to acknowledge any restrictive signal indication or suffer a penalty brake application.

Gardner also took a shot at Amtrak’s host railroads for creating an “existential crisis” by delaying its trains through freight train interference.

He called for legislation allowing Amtrak to sue host railroads over failure to give passenger trains dispatching priority.

Asked why Amtrak is giving up special trains and restricting its carriage of private passenger cars, Gardner said the carrier is restricting the number of places that it operates to its core network.

He noted that some specials and charters have used routes not covered by scheduled Amtrak trains and that any additional revenue it made from those moves caused “a minimum amount of disruption and distraction away from our core business.”

He said going off network exposed Amtrak to new operating challenges and safety risks.

Gardner said Amtrak’s goal is to offer services on its current routes “where we can use equipment that we are confident in and the requirements on our end are manageable, not a distraction, and do not divert our core staff from the job of becoming fully PTC implemented, focusing on improving on-time performance, and providing great customer service.”