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With a new administration in D.C., it's time to think outside of the box because passenger rail's survival just may depend on it

Tuesday, August 23, 2016

Tackling the Headlines 84: New Amtrak CEO

Last Friday, the Amtrak Board surprised everybody by announcing that former Norfolk Southern CEO Wick Moorman will succeed Joe Boardman on September 1--a month early.

The People Who Were Passed Over

Various magazine issues speculated as to who could replace Boardman presented various names earlier this year. In the May issue of Trains, AAF's Gene Skoropowski gave Don Phillips a list of four railroad leaders who were in their 30s or 40s. In the following issue, Phillips looked at former Amtrak veterans Al Engel and Richard Phelps--both of whom left Amtrak in 2011 (it is worth noting that in that same June issue, the Amtrak Board ignored Boardman's handpicked search firm/successor).

In the Second Quarter issue of Passenger Train Journal, NARP CEO Jim Mathews warned about the dangers of an NEC-centric board could have on the next president's agenda. The magazine reported that the Amtrak Board also ignored suggestions from the States for Passenger Rail Coalition.

As Jim Wrinn said, Amtrak was on time for once. When Tom Downs was replaced, the Board named George Warrington as the interim president and didn't remove his name when challengers stepped up. The result? Amtrak almost went bankrupt due to his all-in focus on the Acelas. It took the Board a year to transition from David Gunn to Andrew Kummant. Then, after Kummant left, Boardman, fresh off of his FRA duties, was appointed as the interim boss for over a year before the Board removed the interim tag. Until last Friday, it looked as though the Board would appoint yet another temporary person who would become the permanent head.

My Prediction vs Actual Outcome

I thought for sure that the Board would pick someone who would continue along the same path of taking the states for granted and still be in reactionary mode in the wake of competition. As far as Moorman goes, he falls outside of the names listed by magazines and rail experts only because he initially told everyone that he was going to just enjoy his retirement.

Amtrak's Path Forward

The operator is in need of fresh blood. The last railroader to run Amtrak--Andrew Kummant--was a low-level Union Pacific leader and had a very uneventful two-year tenure. Amtrak is staring at a future where: 

  1. All Aboard Florida's Brightline is about to resume the era of private passenger service. A successful run may mean that Florida's leaders implent their version of a California-like system without even talking to Amtrak
  2. Regional and shortline railroads are either providing intercity services or are planning to
  3. A trade group representing Amtrak's commuter competitors is chomping at the feet of "America's Railroad" to grab intercity contracts of state-supported corridors and overnight routes courtesy of the FAST Act (and PRIIA before it)
  4. Congressional pull alone may not be enough for Amtrak to maintain its near monopoly on passenger routes. Ironically, the tipping point may have been the Senate's failed attempt to drive private competitors out of the business in the spring of 2012
  5. The states themselves may be tired of paying high prices to keep Amtrak as the contractor of their routes when they have budgets to balance and expansion is met by the national operator by endless studies to nowhere. Indiana may have gotten the ball rolling by contracting the Hoosier State to Iowa Pacific, but there will be a state or group of states that will completely break away from Amtrak


What It Means for Competitors

With a former Class I executive running Amtrak, it may or may not be a bit more difficult for AIPRO members and others to get existing routes away from the national operator but time will tell. However, I will say this: It's very unlikely that Mr. Moorman will be as combative towards other operators. If anything, the new Amtrak CEO may decide on his own just which routes are worth keeping in the Amtrak system and which ones would be better off in the hands of someone else.

1 comment:

  1. As someone who knows what's going on, I can say that Fred and Don and you have no idea what's going on.

    ReplyDelete