Amtrak moves to save $100 million annually

Posted by Fred Frailey
on Tuesday, November 1, 2011


Updated 11/3/2011

When I wrote last Friday that a purge of Amtrak’s non-union workforce was “a no-brainer,” I guess I was prescient. Today letters began going into the mailboxes of all non-agreement employees, offering them buyouts. If Amtrak’s force-reduction goal isn’t met, the buyouts will be followed by dismissals in January on less-generous terms. Any non-union employee with more than one year of seniority is eligible to request a buyout. The package being offered includes monetary payments, up to an undisclosed maximum, and continued medical benefits for lengths of time based on years employed by Amtrak.

Spokesman Steve Kulm won’t divulge the targeted number of jobs, but does say that Amtrak aims to save $100 million in fiscal 2012, which began Oct. 1, through this job reduction, by not filling vacant positions, and by other, unspecified economies. The word I get is that Amtrak will cut through buyouts or force reductions 250 to 300 of its 2,290 management positions, or between 10 and 15 percent.

A cut of this magnitude tells you two things. One, how bloated Amtrak’s management had become in recent years under a string of in-and-quickly-out chief executives. And two, how serious the current president, Joe Boardman, is in desiring to accomplish his strategic goals in the face of a Congress that loves it one moment and hates it the next. On that first point, I count 19 vice presidents or equivalents, so there are plenty of opportunities to trim at the top.

Where will be savings be applied? Three places, replies Kulm: On development of e-tickets that passengers can print at home and bring to be scanned by conductors, on new equipment, and on accessibility to trains by handicapped customers, that last item being required by law.

More than a month into fiscal 2012, Amtrak is relying for funding on a "continuing resolution" from Congress, which means the fiscal 2011 level of subsidy. Amtrak’s request is for roughly $600 million in operating subsidy and $1.5 billion for capital improvements and debt service. On November 1, the U.S. Senate voted to appropriate $544 million in operating subsidies and $937 million for capital spending and debt service.  These numbers are close to fiscal 2011 funding levels. The U.S. House has not passed a fiscal 2012 appropriation for Amtrak. Once it does, differences will be resolved by a conference committee representing both houses.

But back to this being a no-brainer: My sense of things is that Boardman can’t lose here. Force reduction or not, the same trains will run tomorrow that ran yesterday, and the politicians who control the purse strings are on notice that Amtrak is willing to act to put its own house in better fiscal order. — Fred W. Frailey

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