- The Washington Times - Saturday, July 28, 2001

Amtrak will offer early retirement and voluntary separation programs to all 2,900 managers, or 13 percent of its work force, starting next week to try to cut costs and help avoid possible liquidation next year.
All management employees those not covered by union contracts are eligible for the offers. Amtrak President George Warrington did not say yesterday how many managers would have to accept in order to meet staff-reduction goals.
The incentive packages will be presented to employees next week as part of a corporate restructuring that could save the company as much as $85 million in 2002.
Under orders from Congress to wean itself from federal operating subsidies, the national passenger railway will spend four to six months seeking ways "to eliminate overlapping operations, tighten cost controls and improve revenue opportunities," Mr. Warrington said in a statement.
Amtrak's four business units Intercity, Amtrak West, Northeast Corridor and Mail and Express will be consolidated under the direction of E.S. Bagley Jr., a 27-year Amtrak veteran.
Mr. Warrington made no mention of service cuts in yesterday's announcement. Ross Capon, executive director of the National Association of Railroad Passengers, said he is hopeful Amtrak will trim personnel without affecting train riders.
"The creation of four separate business units is not something that we suggested and raises obvious questions of duplication of various functions," Mr. Capon said. "It is essential that they squeeze every dollar they can out of management efficiencies in the hopes that they can avoid service cuts, which we would find extremely unfortunate and upsetting."
Mr. Warrington had long expressed the hope of avoiding cuts in personnel or services. He said Amtrak found in the mid-1990s that cuts brought numerous complaints and fewer financial savings than expected.
Last year, Amtrak announced a plan to add passenger routes and expand into package delivery. Amtrak's revenue was up nearly 12 percent, and ridership 7 percent, during the first six months of the current fiscal year.
But Mr. Warrington said the slowing economy has hurt, and Amtrak's expenses have been rising with revenue.
So tight are the finances that Amtrak recently offered parts of New York's Pennsylvania Station as collateral for a $300 million loan to keep its trains running through September.
The Transportation Department's inspector general, Kenneth Mead, told Congress Wednesday that Amtrak registered a cash loss of $405 million in the first eight months of fiscal 2001 $21 million more than projected.
He and JayEtta Hecker, who monitors Amtrak for the General Accounting Office, testified that they do not believe Amtrak will meet the December 2002 deadline set by Congress to become operationally self-sufficient.
At that hearing, Mr. Warrington said the railway will make needed changes to meet the deadline.
The 1997 Amtrak Reform and Accountability Act gave the national railway until 2003 to end its 30-year reliance on federal operating subsidies. Under the law, Amtrak would have to submit a plan for its own liquidation if it failed to meet the deadline.
More likely, a failure would reopen the debate about whether taxpayers should support a railroad that loses money but provides alternatives to crowded highways and airports.
Mr. Warrington has encouraged such a debate. He has said that Amtrak, since its creation in 1971, has struggled under conflicting missions: running a national rail network, including some long-distance routes that lose money, while breaking even financially.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide