Penn Central Post, June 1971 (Thanks to Canada Southern!)
http://www.canadasouthern.com/caso/post/images/post-0671.pdf
A new era for the passenger train began on May 1.
Most of America's intercity service became the responsibility of the National Railroad Passenger Corporation.
Penn Central and 19 other railroads signed contracts with the corporation.
From here on, the Corporation is prescribing the number of trains, the routes, the schedules, the fares, and all other details of the service.
The Corporation will tell each railroad what it wants. The railroad will provide the service under contract.
Railroad personnel assigned to this service continue to be employes of the railroad.
The National Railroad Passenger Corporation has adopted the code name, Amtrak. (Am for America; tr for travel; ak for track.)
It has issued a single timetable covering all the intercity trains in its nationwide network.
Penn Central people have the major role in this service.
Of Amtrak's 22 routes, 13 use Penn Central lines entirely or part way.
Of Amtrak's 184 daily trains, PC people operate 141, or approximately 75 percent.
Of Amtrak's total rail mileage, PC people operate 40 percent (because western and southern trains, though fewer in number, generally have longer routes).
Congress, in establishing the National Railroad Passenger corporation, specified that its goal is to operate at a profit. For that reason, the corporation dropped trains that were poorly patronized and retained only 184 of the 365 intercity trains operating in the country.
Of the Penn Central service, Amtrak has retained approximately 65 percent on a train-mile basis. The remainder has been discontinued.
This has eliminated approximately 1200 positions on the Railroad. But many of the employes have already bid into other PC jobs made available through vacant positions, attrition, etc.
Employes affected by the train eliminations under Amtrak are entitled to protection. Those who are covered by the Merger Protective Agreement will continue to have that protection. Others will be covered by protective provisions issued by James B. Hodgson, U. S. Secretary of Labor.
The details of Secretary Hodgson's rulings are contained in a 20-page statement. Copies are available for interested employes to review at all Penn Central's Labor Relations offices.
The takeover by Amtrak will not mean a profit for Penn Central. But it will mean a substantial drop in the severe financial losses on intercity passenger service. (Commuter service is not included in Amtrak operations.)
The Railroad had hoped that Amtrak would reimburse it for its full costs of passenger operations, including a return on the huge investment in passenger facilities.
Instead, Amtrak will pay the Railroad just enough to let it break even on its direct costs incurred exclusively for Amtrak operations (crew wages, maintenance of equipment, fuel, and so on) and certain costs of passenger stations and other facilities used only for passenger service.
Each month, the Railroad will send Amtrak a statement of what was spent on passenger service and what was collected in fares. Amtrak will then make up the difference (or collect the profit, if any).
To become part of Amtrak, each railroad must pay a "membership fee." For Penn Central the fee will be approximately $52 million, which the Railroad will pay in monthly installments over a period of three years.
Before signing the agreement with Amtrak, the Trustees of Penn Central Transportation Company had to obtain the approval of U. S. District Court Judge John P. Fullam.
The judge granted permission after two days of hearings, in which testimony was given by Trustee Willard Wirtz and by Paul Funkhouser, vice president-public affairs.
Mr. Funkhouser testified that the reduction in passenger service losses under Amtrak will mean an improvement in the Railroad's cash flow of an estimated $9½ million during 1972. The amount thereafter is expected to increase, making an average of $38 million annually during the next seven years. (Note: The Railroad's payroll costs are approximately $100 million per month.)
David W. Kendall, formerly chairman of the Amtrak incorporators and now a director, said:
"We believe the new service can succeed because, for the first time, it unifies all the operations of the nation's railroad passenger service.
"It means centralized and efficient reservations, ticketing, food and other on-train facilities.
"The new corporation will utilize the creative ingenuity of modern marketing, promotion and merchandising."
The Corporation will select the best equipment—about 1500 of the 3300 existing passenger cars belonging to 20 railroads. The cars will be refurbished and upgraded as quickly as possible.
Mr. Kendall looked forward to steady growth for Amtrak. He said:
"This system will, we hope, attract hundreds of thousands of people who have not recently—or ever—relied on railroad transportation."
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