Date: Mon, 21 Dec 1998 08:45:26 -0600
From: "Andrew Selden"
To: all-aboard@railspot.com
Subject: {A-A} Amtrak CEO
This morning's edition of The Wall Street Journal reports that acting President George Warrington will be announced today as the new President and CEO of the National Railroad Passenger Cororation. Amtrak has scheduled an announcement of an unstated message for 2 pm EST today at Washington Union Station at a hastily constructed temporary stage, to be followed by a private reception at 3 pm in the company's offices.
Sources have reported to us that today's announcement may also include the replacement of the "Amtrak" brand name and the headless arrow logo that have represented the company's services since 1971.
Everyone on this list knows that I had interviewed with the Board for this position and was one of the four finalists for the job. I want to thank the great majority of you who had supported that effort, and say to the few who offered constructive criticism and did not support the effort, my appreciation for sharing their views and concerns. This was an interesting and educational experience.
Like all supporters of passenger rail service, I wish Mr. Warrington well, despite the bitter and personally vituperative letter he sent me midway through his own campaign for the presidency. But I think it would be wise for all rail advocates, including especially those who opposed my own candidacy, to ponder the implications of the fact that Mr. Warrington's strategic plan to save Amtrak from oblivion (which I have read) bets the survival of the company on a plan that (1) has never worked anywhere in the world; (2) has failed repeatedly in the United States; and, (3) treats the national network of interegional long distance trains as a costly burden and obstacle to the achievement of financial self-sufficiency. In the entire strategic plan, except for a single passing reference to the potential importance of the growth of express business in the context of dismissing the long hauls as hopeless losers, there is not one sentence about the long haul trains or their role in the future of Amtrak. When I interviewed with the Board, I made clear my view that the Warrington plan was doomed to failure, and that if what the Board was seeking was simply a CEO to carry out that plan, I would not be interested in the job. The long delay in offering Mr. Warrington this position on a full-time basis suggests that the Board may have had some second thoughts itself. Certainly the parallel conclusion expressed by the DOT Inspector General cannot give much comfort.
In my analysis and that of my colleagues, Amtrak cannot achieve financial breakeven, including the infrastructure costs of the NEC, until it achieves a level of output measured by revenue passenger miles of approximately three times its current level. Increases of that scale cannot be achieved in the NEC or in any combination of short corridors anywhere in North America. Even in the wildly improbable event that the semi-high speed effort in the NEC achieves exactly what its advocates predict for it, it will still leave Amtrak with more than $100 million a year in unrecovered infrastructure and administrative costs in the northeast. Any of us is free to predict what Congress will do three years hence when and if that is the position in which Amtrak finds itself. I am not sanguine about the prospects.
Andrew Selden
Minneapolis
December 21,1998