House Committee Hearing on Gunn's Firing

[oltmannd]

They are talking about an NEC asset company with Amtrak & commuter agencies paying for use. I think this includes scrapping the current agreements with the commuter agencies to get to more "realistic" payments.

To suck out money in this scenario, you lay off 2/3 of the maintenance workers, stop doing 3/4 of the program track ,signal and catenary work. The cash payments coming from Amtrak and the Commuter agencies go striaight out at dividends.

The NEC is in pretty good shape, for the most part right now, so you can coast for a few years without anyone really noticing. Then, once the failures and slow orders start to become more noticable, you start making plausible excuses that this is only a temporary situation - workforce turnover, labor issues, weather, vendor problems - whatever - all of which you have been working on and will have things fixed up in "no time". Meanwhile the cash continues to flow through to the investors.

You might even be able to borrow some money - or beg for some from the gov't like the airlines did on 9/11 - and flow that through as dividends, too.

Since there isn't anyone in an oversight position (other than the FRA) who knows beans about maintaining a RR, you can get away with this for quite a while.

Finally, things will get so bad that it will be obvious to everyone what's been going on, you declare bankruptcy and sell the whole thing back to the Fed or state gov'ts and walk away with several billion sitting in your investor's pockets.

If you did all this as a private company, you may not even have to show your books to anyone. (is this true? I'm no accountant)

[PNWRMNM]

Don,

I doubt that there is much "excess maintenance" to liquidate. The NEC has three big problems.

Amtrak's own business is break even at best.

Massive investment demands such as fire escape for Hudson Tunnels, for one. Track and wire for another.

Have to carry the local comuter operators at avoidable cost, losing hundreds of million per year as compared to getting average cost from them.

Getting involved in the "profitable" NEC is a sure route to no money. I doubt that anyone in the private sector would be so brave.

Mac

[oltmannd]

QUOTE: Originally posted by daveklepper

What about money to be made in picking pieces of a carcass?

Lot's of "there" there, for sure. Laney has alleged conversations with people interested in buying the NEC. There's a ton of money to be made there by deferring maintenance and sucking cash out.

[samfp1943]

QUOTE: Originally posted by Big_Boy_4005

QUOTE: Originally posted by oltmannd

Hmmm. Let's see.... A turnaround artist.... With a railroad/passenger background..... Hmm. Who's available who would take a $250,000 year job?

I hear there's a guy in Nova Scotia who fits this profile. Has a house in N. VA already, too!

Now what was his name again?[:D]

I think I saw that guy on C-SPAN the other morning, but I'm not sure he wants the job (again).[:(][B)][;)]

Maybe if they offered him more money (still doubtful). The man has integrity and principles in the face of stupidity. The president with his plan can stick it.

Don, I think you and I smell the same rat behind the Bush plan. I didn't see any other railroads doing special commemorative loco paint jobs for Bush Sr. The big business connection is too much, and it is becomming obvious.

As a matter of fact the UP ran a "President's Special " train through here yesterday morning..Headed for the Houston Area according to the "Parsons Sun" ..You guys may have something cooking.. they were supposed to meet Bush 41 in HOuston..[?][?][?]

[Jack_S]

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by Jack_S

oltmannd >> GWB. I've always thought that "puppet master" portrayal was a bit unfair

Jack > on the other hand I have always wondered where Cheny gets his shoulder length rubber gloves.

Jack, you should REALLY reconsider that screen name.

Rather than reconsider it I flaunt it with pride.

[TomDiehl]

QUOTE: Originally posted by Jack_S

oltmannd >> GWB. I've always thought that "puppet master" portrayal was a bit unfair

Jack > on the other hand I have always wondered where Cheny gets his shoulder length rubber gloves.

Jack, you should REALLY reconsider that screen name.

[Jack_S]

oltmannd >> GWB. I've always thought that "puppet master" portrayal was a bit unfair

Jack > on the other hand I have always wondered where Cheny gets his shoulder length rubber gloves.

[jeaton]

... with futuremodal as the Fox News commentator giving the fair and balanced coverage of the story.

[Anonymous]

Well, the inmates are definitely running this asylum of a topic.

Lock them up and throw away the keys. Somebody. Anybody!

[Big_Boy_4005]

Don, the really scary part is it probably doesn't cross their minds.

Jay, that is also a good theory, and between the two probably lies the truth behind the plan. Let's rob every possible domestic program, and pour it all into the "WAR ON TERROR", where we have a lot of friendly contractors, and are heavily invested.

Bottom line, screw the people, lets make some real money.

If we work on the plot long enough it might make a good TV movie.[;)]

[jeaton]

Don

Let me know when you need backers for producing your version. I'll be there, but I would still want to get Karl Rove in the story. Maybe the romance angle?

Jay

[oltmannd]

QUOTE: Originally posted by jeaton

Reference to Don's connecting the dots. One piece of speculation is as good as another.

I think the genesis of "Get Amtrak" is the White House Office of Management and Budget, with help from the Office of the Chief of Staff Andrew Card and Karl Rove as the enforcer. OMB looks for programs to eliminate so the domestic budget can be cut. Obviously Amtrak pops up. The idea to do something to get rid of the Amtrak grant goes to some assistant at DOT who is ready, willing and able to lead the charge and feed the necessary story line to Mineta. If told it was a problem, Mineta would say that nobody rides the train from San Francisco to Honolulu and it is a big waste of taxpayers' dollars. Karl Rove marks up DOT assistant for a big future in the coming millenia of Republicans in power. Board Chairman Laney and Mineta designee to the Board Jeff Rosen are bright guys who know it is not wise to make Karl Rove unhappy.

By the way, I am not going to try to say that I am right and anybody else is wrong describing the power play. I doubt that anyone who can will try to get to the bottom of the Amtrak deal. As much as those of us have a big interest in railroads wish it were different, there are just to many other issues that get way more attention.

So let the theories come forth. (Except for evolution theory. That's politics AND religion.)

Jay

I like it! I just think mine would make a better TV movie.[:)]

Your "just another domestic program" theory isn't very sexy. There's just way too much heat in this for that to be all there was to it. Amtrak is really just small potatoes and a nice piece of "other white meat" for Conrgress

[jeaton]

Reference to Don's connecting the dots. One piece of speculation is as good as another.

I think the genesis of "Get Amtrak" is the White House Office of Management and Budget, with help from the Office of the Chief of Staff Andrew Card and Karl Rove as the enforcer. OMB looks for programs to eliminate so the domestic budget can be cut. Obviously Amtrak pops up. The idea to do something to get rid of the Amtrak grant goes to some assistant at DOT who is ready, willing and able to lead the charge and feed the necessary story line to Mineta. If told it was a problem, Mineta would say that nobody rides the train from San Francisco to Honolulu and it is a big waste of taxpayers' dollars. Karl Rove marks up DOT assistant for a big future in the coming millenia of Republicans in power. Board Chairman Laney and Mineta designee to the Board Jeff Rosen are bright guys who know it is not wise to make Karl Rove unhappy.

By the way, I am not going to try to say that I am right and anybody else is wrong describing the power play. I doubt that anyone who can will try to get to the bottom of the Amtrak deal. As much as those of us have a big interest in railroads wish it were different, there are just to many other issues that get way more attention.

So let the theories come forth. (Except for evolution theory. That's politics AND religion.)

Jay

[daveklepper]

What about money to be made in picking pieces of a carcass?

[oltmannd]

QUOTE: Originally posted by Big_Boy_4005

QUOTE: Originally posted by oltmannd

Hmmm. Let's see.... A turnaround artist.... With a railroad/passenger background..... Hmm. Who's available who would take a $250,000 year job?

I hear there's a guy in Nova Scotia who fits this profile. Has a house in N. VA already, too!

Now what was his name again?[:D]

I think I saw that guy on C-SPAN the other morning, but I'm not sure he wants the job (again).[:(][B)][;)]

Maybe if they offered him more money (still doubtful). The man has integrity and principles in the face of stupidity. The president with his plan can stick it.

Don, I think you and I smell the same rat behind the Bush plan. I didn't see any other railroads doing special commemorative loco paint jobs for Bush Sr. The big business connection is too much, and it is becomming obvious.

Yeah, but I really believe they think they are doing the "right thing". I don't think they look at it as cronyism - it doesn't even cross their minds.

The paint job is really cool, though!

[oltmannd]

QUOTE: Originally posted by edbenton

Which one Cheney or W Bush. Considering Cheney is the puppetmaster and Bush is nothing but the puppet. Just look at who got the nobids for Iraq Hallibertan anyone.

GWB. I've always thought that "puppet master" portrayal was a bit unfair. It is pretty obvious the GWB values the input of DC highly, though.

As for Haliburton. What a dissapointment! If there was any lesson to learn from the Clinton years, it was that "appearance of conflict of interest" = "conflict of interest". Bids or no, Haliburton should not have been a player in any contracts.

[Big_Boy_4005]

QUOTE: Originally posted by oltmannd

Hmmm. Let's see.... A turnaround artist.... With a railroad/passenger background..... Hmm. Who's available who would take a $250,000 year job?

I hear there's a guy in Nova Scotia who fits this profile. Has a house in N. VA already, too!

Now what was his name again?[:D]

I think I saw that guy on C-SPAN the other morning, but I'm not sure he wants the job (again).[:(][B)][;)]

Maybe if they offered him more money (still doubtful). The man has integrity and principles in the face of stupidity. The president with his plan can stick it.

Don, I think you and I smell the same rat behind the Bush plan. I didn't see any other railroads doing special commemorative loco paint jobs for Bush Sr. The big business connection is too much, and it is becomming obvious.

[edbenton]

Which one Cheney or W Bush. Considering Cheney is the puppetmaster and Bush is nothing but the puppet. Just look at who got the nobids for Iraq Hallibertan anyone.

[oltmannd]

This is all very entertaining. All the pieces don't fit together, the words don't match the actions. For example, Laney makes no sense, as Gunn points out. Mineta doesn't seem to have a clue, but he does have an agenda. There are gaps in what we know that would probably explain a lot.

I'm gonna play "connect the dots" and speculate.

I'll start with the fact that *** Davidson of UP does not think the LD trains on his RR are worth the effort and he'd like them to go away. Well, that's almost a fact.

*** Cheney was on the UP board, so he know DD. Let's say DD wants to use this connection as leverage to get those trains killed. He has a quick 15 minute conversation with DC about it something like this: "You know, we run a couple of Amtrak trains over our RR that lose more money than it would cost to fly everyone from A to B. On top of that, they really get in the way of our money making freights. It really makes no sense to keep running them, particularly with the current budget deficits, etc, etc." DD isn't doing persuasive arguement so much as delivering what he hopes DC will accept as a reliable conclusion.

So lets assume DC and DD have a relationship where they trust each other's conclusions. So, CD goes into a cabinet meeting, gets Amtrak on the agenda for 5 minutes and delivers what is basically DD's conclusion.

GWB tells Mineta to go to work on it - stop the bleeding and see what kind of "market based reforms" can be applied. Sort of high level, guiding principles being applied. You really don't want at prez who's too mired in details. He has to have a good cabinet that he can trust. ....he really trusts DC to tell him the truth.

Now, Mineta has only the tiniest clue what Amtrak is about and has to cobble together something that fits what his staff at the FRA tell him (those guys actually do know a bit about railroading) and his directive from the cabinet meeting.

Meanwhile, GWB has rewarded politico Laney with an Amtrak board position and a couple more buddies with recess appointments to help support what Mineta proposes.

So, we get Mineta's "Amtrak tour" last spring - which started quite a bit of debate - and led Amtrak to develop their own reform plan.

Laney's not tuned into Mineta's directive from GWB, so he buys into what Gunn is telling him and the Amtrak reform plan. After all, Gunn seems to know what he's talking about and it makes sense. So, he's all for it.

But the Amtrak plan doesn't fit well with what Mineta's cobbled together. It's the "wrong answer" - and the hammer is handed to Laney to go pound on Gunn. Which he does. Gunn won't bend and gets fired.

Now we are in "now what?" land. Amtrak is still a mess without a mission. There is no reform plan being advanced. Congress is going to give Amtrak enough money to keep the whole shebang going. And, nobody is happy.

Mineta has spent every bit of political capital and credibilty he had on this issue. Now, he just looks foolish (as does Laney). The hearing pretty much pounded this point home. Notice Mineta didn't show up himself. He has almost no power at all to advance any agenda on Amtrak. The moderate Republicans - who, except for McCain, are generally pro-Amtrak, are no longer marching lockstep with the conservatives and have turned themselves into a very powerful swing boting block in the house and senate.

Mineta can't backtrack and start backing the Gunn reform plan. He can't go forward with any of his "split the NEC" proposals because he'll runs smack dab into those moderate R's. He's made a big mess. I'll bet his boss isn't too happy.

[jeaton]

Don't forget that along with the wonderful $250K per annum and all the grief, you do get your own private railroad car.

[oltmannd]

Hmmm. Let's see.... A turnaround artist.... With a railroad/passenger background..... Hmm. Who's available who would take a $250,000 year job?

I hear there's a guy in Nova Scotia who fits this profile. Has a house in N. VA already, too!

Now what was his name again?[:D]

[jeaton]

Here is a report on Mineta's talk up in New York. I am not sure if this is his "big announcement" refered in the Railway Age item above, but he said that it is not the intent of the board to dismantle Amtrak. Of course, he is silent on the issue as to whether the Board is actually capable of keeping it going.

He did say the Board is looking for someone for the CEO slot that can turnaround the ailing railroad.

Good luck, Normy.

http://www.nynewsday.com/news/local/wire/newyork/ny-bc-ny--mineta-amtrak1117nov17,0,4045001.story?coll=ny-region-apnewyork

[daveklepper]

Thanks for the news and the links. I want to keep informed and this forum is by far the best way. Thanks.

[jeaton]

The following is from the Railway Age web site.

http://www.railwayage.com/breaking_news.shtml

Late Breaking Rail Industry News
--------------------------------------------------------------------------------

"November 15, 2005
“I don't trust you, and I don’t think this Congress can trust you.”

Members of the House Transportation and Infrastructure Railroads Subcommittee held a hearing today on Amtrak governance in which Amtrak Board Chairman David Laney and U.S. DOT General Counsel Jeffrey Rosen were questioned about the dismissal of Amtrak President and CEO David Gunn and on the legality of Amtrak’s board, which will consist of only two members once Congress recesses for the winter.

Subcommittee members were largely supportive of Gunn, who testified that his dismissal was unexpected, “despite the disclaimers of Laney and Rosen.” “Only one person was hostile to me,” Gunn told Railway Age. That was John Mica (R-Fla.), who Gunn said “gave one of his classic performances: Privatize the Northeast Corridor and make millions. What baloney.”

Gunn, who is fairly thick-skinned, said he took umbrage that Laney and Rosen characterized his job performance as “lackluster.” “Amtrak performed pretty well this year,” he said, citing, among other improvements, a $120 million cash carryover from FY 2005.

Laney testified Gunn was fired because his “refusal to go in several new directions meant that Amtrak would continue on its present course—flat operating losses, unsustainable labor costs, and money-losing long distance [trains], food services, and more.” Gunn said all of those concerns were being addressed in Amtrak’s long-term strategic plan released earlier this year—a document in which he had a major role creating and which Laney endorsed and praised. It was only a short while ago that Laney was praising Gunn on his performance.

That’s why “none of this makes any sense,” said Gunn. “Why would Laney create a managerial problem for himself by firing me? The operation was running well.” Gunn contends that the DOT’s real motives are to break up Amtrak, not reform it. “I think the DOT was counting on us to go belly-up,” he said. “That didn’t happen, so they needed to get rid of me.” Would he return to his post, if asked? “If a legal authority asked me to return, I would,” he said. “We’re doing too well. I would want to see things through.”

At the hearing, Rep. Robert Menendez (D-N.J.) was particularly critical of Laney and Rosen. “Mr. Laney, Mr. Rosen, I'll be very blunt here: I don’t trust you, and I don’t think this Congress can trust you,” he said. “My worst fear is that you are trying to sell off the Northeast Corridor to a group of investors who will use it to get huge tax breaks from the depreciation.” Laney denied the charge.

Rep. Jerrold Nadler (D-N.Y.), a staunch Amtrak supporter, testified, “It is obvious what is going on here. The Amtrak Board of Directors has become a front for the Bush Administration and people who want to destroy Amtrak. Their goal is to dismantle the railroad. When Gunn refused to go along with the ‘Bush Board’ on actions that would cripple the railroad, most notably the spin-off of the Northeast Corridor, he was fired. The ‘Bush Board’ had to resort to these tactics because the Administration cannot get Congress to do its bidding and break up Amtrak. . . . [Gunn’s] firing is a sign of the lengths Amtrak opponents will go to in order to eliminate passenger rail service in this country. It must be stopped.”

What happens next? Sources told Railway Age that Transportation Secretary Norman Mineta may make “a major announcement” in New York City on Thursday regarding Amtrak and, in particular, the Northeast Corridor. "

Note that Gunn said he would return if the job was offered by "legal authority"

This has not completely played out yet.

Jay

[jeaton]

QUOTE: Originally posted by Big_Boy_4005

QUOTE: Originally posted by oltmannd

"TV news" is an oxymoron, be it FOX, CNN, the networks or local news. One or two sentences written at the third grade level and a clip with a sound bite or two cannot be called "reporting".

Forget the media - get it straight right here - no "balance" necessary!
http://www.house.gov/transportation/rail/11-15-05/11-15-05memo.html

I'll second that part about the mainstream media Don. The thing about C-Span is, it's coming straight out of the horse. The question is which end? That is left open to viewer interpertation.

The hearing wrapped up just before 7 AM CST, what a dog and pony show. I don't think any questions were really answered, just more raised. I watched with the opinion that Mr Gunn had been "railroaded", and by the end, nothing had been said to change that.[|)][B)][;)]

Elliot

One of the things that I see about Congressional hearings is that they are often done as more of an oppurtunity the committee members to show their viewpoints rather than get the facts and opinions of the witnesses. I think it is fair to say that most of the real stuff is staffwork done in the back offices.

Same with this dog and pony show, except that it does indicate a fairly broad based congressional unhappiness with the action of the Board of Directors. Interesting to me that the full committee Chairman Oberstar, Republican from your state told Railroad Sub-Committee La Tourette, Republican from Ohio to call the Hearing. I think it was clear that LaTourette was not being a door mat for the Amtrak Board.

Jay

[UPTRAIN]

From Don Phillip's Article: "In the United States, it's the opposite. Freight is king. Outside the Washington-New York-Boston corridor, freight is actually more than king. Passenger trains out in the heartland of America survive only because freight railroads do not want the bad publicity that would come with the death of the passenger train. Freight railroads therefore have a policy of containment for passengers."

...Ouch...

I'm glad Gunn showed up yesterday, but if I were him and he were me...I wouldn't go near the place.

[oltmannd]

QUOTE: Originally posted by BaltACD

QUOTE: Originally posted by daveklepper

Again, Mineta did not show the leadership the USA should expect of a Transportation Secretary during the two Gulf Coast hurricanes.

Mineta has shown NO leadership in any situation that has presented itselt. He has demonstrated the worst of 'cronyism political appointment'. Transportation in the US deserves much better leadership than Mineta has provided.....and any efforts at leading transportation in any direction, even a wrongheaded one, would be an improvement.

Amen! What a difference there would have been if Tommy Thompson had been appointed to DOT instead of HHS in the first term!

[Modelcar]

...It simply looked to me like Mineta was under the gun...{not Gunn}, as Trans. Sec. to not promote any railroad passenger service and he gave lip service only. That is what it looked like to me.

[BaltACD]

QUOTE: Originally posted by daveklepper

Again, Mineta did not show the leadership the USA should expect of a Transportation Secretary during the two Gulf Coast hurricanes.

Mineta has shown NO leadership in any situation that has presented itselt. He has demonstrated the worst of 'cronyism political appointment'. Transportation in the US deserves much better leadership than Mineta has provided.....and any efforts at leading transportation in any direction, even a wrongheaded one, would be an improvement.