- The Washington Times - Friday, December 1, 2000

15 minutes with … George D. Warrington

The first high-speed Acela train with fare-paying passengers could not have pulled out of Union Station this morning without the support of George D. Warrington, president and chief executive officer of Amtrak.

Amtrak's board of directors appointed Mr. Warrington, a 25-year transportation industry veteran, to the top post hoping he would be the visionary who would finally make the national passenger railroad profitable.

Before Mr. Warrington's appointment two years ago, most of Amtrak's efforts to save money involved cutting costs. Mr. Warrington wanted Amtrak to make money by investing more money.

None of those investments has been as expensive, as bold and as full of financial risks as the 150-mile-per-hour Acela train. Mr. Warrington sold his board of directors and Congress on Acela by saying it could help pull Amtrak out of the insolvency that has plagued it since its inception in 1972. As the air shuttles and highways along the Northeast Corridor became more crowded, Acela could provide a transportation alternative, he said. He is predicting a $180 million a year profit from Acela Express. All 20 train sets, which cost $800 million when maintenance is included, are scheduled to be running along the Northeast Corridor by late summer 2001.

With the optimism of a public relations man, the strategies of a marketer and the financially keen eye of a loan officer, Mr. Warrington does not believe he is risking anything.

"It's no gamble," he said during an interview in his office at Union Station. "The only risk would have been not to do this program. The market response has been great."

More than betting a few hundred million dollars on Acela, Mr. Warrington and Amtrak might be betting the future of America's long-haul passenger rail service. Unless Amtrak can become operationally self-sufficient by the end of fiscal year 2002, Congress has threatened to sell off parts of the rail system to regional commuter railroads and private investors. Acela is the cornerstone of Amtrak's plan for financial self-sufficiency.

Mr. Warrington, 48, came to Amtrak in July 1994 from the Delaware River Port Authority and Port Authority Transit Corporation (PATCO), where he served as executive director and president from July 1992 to January 1994.

He tells a story about an incident that occurred shortly after he took over leadership of PATCO. A stray dog was wandering in lanes of Philadelphia's Ben Franklin Bridge, stopping traffic and creating delays. A PATCO security officer was called to the scene to remedy the problem. The officer picked up the dog and threw it off the bridge.

"I got a sense that something wasn't right," Mr. Warrington said.

In the investigation that followed, Mr. Warrington discovered that the PATCO officers were poorly trained and lacked internal discipline. He restructured their force in a way he believed would make it more responsive to concerns of the public.

"It's about understanding what your mission is," Mr. Warrington said. "Underlying your mission is customer service and being helpful. I've often heard there is a thin blue line between good guys and bad guys, and I saw it there."

In much the same way, Mr. Warrington has aggressively sought to make Amtrak more responsive to customers. His vision for the railroad includes connecting major rail corridors nationwide with high-speed trains like Acela. Los Angeles to San Francisco would be one, Houston to Dallas another and Orlando to Miami a third.

"The long-range plan is to execute a vision of a very healthy and very well-connected network of intercity and high-speed trains all around this land," Mr. Warrington said. "We clearly have opportunities for higher speeds, more frequencies and successful economics relating to corridors in the Southeast, the Midwest, the Pacific Northwest and the West Coast. The Northeast Corridor is a successful phenomenon. In fact, it's a treasure. It's a national asset. Those kinds of opportunities exist in 250 to 350-mile corridors all across this land."

In addition to moving passengers, Amtrak is earning revenue from carrying express cargo and time-sensitive mail. Some of the cargo includes perishables, such as fruits and vegetables.

Whether other high-speed routes begin operating depends on the one issue Mr. Warrington believes could ensnare Amtrak's future. "Capital," he said. "This is all about, and has been for 30 years, a matter of national public policy. Will the United States Congress and the administration make the commitment to invest in America's railroad?

"With the right level of public policy commitment and public capital investment in the American railroad system, there's virtually nothing we can't do," he said.

Mr. Warrington's optimism for investing in railroads is not always shared by members of Congress, most notably Sen. John McCain, who advocates ending the half-billion-dollar-a- year subsidies and turning the railroad over to private investors if it cannot operate profitably.

A spokesman for the Senate Commerce Committee, which is chaired by Mr. McCain, said the Arizona Republican's "primary criticism is that Amtrak continually makes these grand promises, but they never deliver. I'm sure Mr. Warrington told you about record ridership and record revenue, but I'll bet he didn't tell you they have record losses right now."

Mr. Warrington, however, believes any animosity in Congress toward Amtrak is fading.

"I think Amtrak's relationship with Congress has improved materially over the last number of years," Mr. Warrington said. "It's about establishing credibility, about being honest, about being straight and it's about clearly articulating a vision."

Support in Congress for recent railroad legislation "speaks volumes to the growing confidence and credibility that has been established between Amtrak, its board of directors, its management and the Congress," Mr. Warrington said.

When he's not thinking about railroads, Mr. Warrington said he most often thinks about his family and ice hockey. He is married, has a 17-year-old son and two stepdaughters, ages 8 and 13. In addition to attending professional ice hockey games, Mr. Warrington likes to watch his son play on his high school ice hockey team.

However, any vision he has for his career involves Amtrak.

"In this life, my future is entirely wrapped around Amtrak," he said. "I don't have a vision beyond Amtrak. I thoroughly enjoy driving change, both a business change as well as cultural change in this organization."

Most of the changes he's made so far have resulted in higher revenue.

Before his appointment to the top job, Mr. Warrington served as Amtrak's acting president and chief executive officer. During his tenure, the company recorded increases in ridership for four consecutive years for the first time in Amtrak history. Revenue increased to more than $2.1 billion, again the highest level in Amtrak's 28-year history. The railroad also achieved its best on-time record since 1986.

Mr. Warrington and the board of directors developed a Strategic Business Plan designed to achieve operational self-sufficiency by the end of fiscal year 2002, which included high-stake investments like Acela.

As they enter the home stretch on their goals, they still must wipe out the need for federal subsidies for operations expenses that this fiscal year total $242 million. The bulk of operations consist of salaries, fuel, ticketing and cleaning.

"The challenge, rather than ratcheting back incremental services, is to generate more revenue and more income to cover what is a large fixed cost operation," Mr. Warrington said. "That's a strategy that's not unique to Amtrak. It's a strategy that's been successfully employed by freight railroads as well as by airlines."

He continued: "If you've got a fundamental basic fixed cost, your challenge isn't to eliminate individual services. Your challenge is to find ways to provide more service to generate more revenue to cover your fixed costs and to make a contribution to your fixed costs."

The high-speed rail program was planned and built under Mr. Warrington's leadership when he served as president of Amtrak's Northeast Corridor, a business unit that he developed and started in 1994 when he joined the company.

During Mr. Warrington's three-year tenure, revenue from the railroad's Northeast operation improved by $200 million, on-time performance improved by 80 percent and ridership grew 8 percent to more than 11 million annual passenger trips.

With a renewed customer focus, the Washington-to-New York Metroliner also became profitable. Mr. Warrington started joint capital investment programs totaling nearly a half-billion dollars with the states of New Jersey, Delaware, New York and Maryland, as well as an aggressive commercial development program.

Any hopes Mr. Warrington might have to continue his impressive record with Amtrak lay aboard the sleek blue streamlined train that pulled out of Union Station at 5 a.m. this morning.

Self-portrait

Name: George D. Warrington

Title: Amtrak president and chief executive officer since July 1994

Age: 48

Home: Ellicott City, Md.

Family: Wife, Hope, one son, two stepdaughters

Education: Syracuse University, B.A. 1974 cum laude, Masters in Public Administration, 1975.

Favorite transportation mode: railroads

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