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NARP President's Letter to Amtrak Board on Search for New CEO

April 15, 2016

NARP to Amtrak Board on CEO Search

[PDF version of original letter]

April 15, 2016

Mr. Anthony M. Coscia
Chairman of the Board of Directors
60 Massachusetts Ave, NE
Washington, DC 20002

Dear Mr. Coscia:

With the retirement of Joe Boardman as Amtrak’s President and CEO, each of you as Board members has a unique opportunity to consider who might be best suited to build on the progress of the past few years to move passenger rail forward in this country in a positive and responsible way. On behalf of Amtrak’s 31 million fare-paying stakeholders, we’re writing to each Board member to share our views – not on the individuals whose names have been floated in the public press, but about the kind of inspiring, visionary leader we believe Amtrak now needs for the next phase of its evolution.

NARP agrees with Senators Roger Wicker (R-Miss.) and Dick Durbin (D-Ill.), who wrote in February to all of you that the new CEO must have “deep understanding of and support for all three of Amtrak’s lines of service – state-supported, long-distance, and the Northeast Corridor.”

Someone outside railroading, with little or no working knowledge of the vastness and complexity of running more than 300 trains every day, carrying millions of passengers to more than 500 destinations, is likely to stumble quickly. Further, it’s clear that such a CEO would not enjoy sufficient congressional support to be effective, and many lawmakers have said as much. By the same token, someone so steeped in prevailing railroad culture with an inability to see beyond the old ways of operating railroads will be ill-equipped to meet the challenges of this next century head on.

The next CEO needs to believe fervently in a vision for Amtrak worthy of a 21st Century America, should have the enthusiasm to convert others to that vision and should have a demonstrated track record of translating ambitious vision into tangible results. That doesn’t happen when one person tries to micromanage every function. It happens when a knowledgeable, forthright, decisive and optimistic CEO inspires the entire team – from the boardroom to the coach-cleaners – to believe in the possibilities of success.

Our Association’s long-term goal is something we call A Connected America, putting 80% of Americans within 25 miles of a rail station within 25 years using a combination of high-speed/high-performance, long-distance intercity rail, commuter trains, light-rail and transit. A Connected America is not only good for passengers but good for business, an economic engine in the communities it serves. We believe passengers should be able to drive, bike, walk or take transit to those stations as they choose, whether traveling for work, school or leisure.

While not all of these matters are Amtrak’s responsibility, the national network is the lynchpin of this vision, the mode tying all other modes together. And thus it’s crucial in our view that the next CEO – whoever he or she might be – be animated by the following qualities and objectives:

1. The next Amtrak CEO should want to create a truly 21st Century network, with enough capital funding for safe operations and growth.

Decades of neglect have created serious obstacles to unlocking the economic power of a truly national intercity network, and our members believe special, immediate attention needs to be paid to addressing critical needs such as the Manhattan Gateway, the Baltimore & Potomac tunnel, CrossRail Chicago, and crossing the Tehachapi Mountains.

Amtrak needs to be an effective partner with states and MPOs in efforts at the national level to expand intercity bus routes and direct intercity passenger train service to airports, especially international hubs, in order to unleash pent-up economic growth. We also believe airports should be able to use AIP funds, passenger-facility charges or other revenue streams to plan, build and operate shared stations serving trains and buses.

The Northeast Corridor and the National Network are interdependent. The NE Corridor’s apparent profitability has only been possible through continued federal capital investment, of the sort that is also needed for the rest of the country and that should produce similar results. Abandoned routes with the correct demographic characteristics need to be restored, and at least one new long-distance route should be added to address obvious gaps that have emerged in recent decades.

2. The next CEO needs to develop strong partnerships with freight railroads who, ever since making their deal with the federal government to take passenger service off their hands, have been required to provide their best service at their lowest prices to support passenger routes.

We support policies at all government levels that create the right conditions for mutually beneficial partnerships among freight railroads, Amtrak and other operators. That’s because a 21st Century network will depend on faster transit times, better reliability and more frequent service. We support creation of a fund that lets freight railroads or states make investments in track and positive train control that decrease trip times and increase on-time performance on all national network routes.

3. For the good of the enterprise, the next CEO needs the skill and patience to broker a “peace agreement” among Amtrak’s many internally warring tribes – not just labor-management, but internecine and interdepartmental sparring.

We hear too often of internal turf battles stifling good ideas, or about inefficiencies that come from individual departmental “fiefdoms” operating independently of the overall goals and objectives of the corporation. And too often the fare-paying passenger bears the brunt of the result, whether it’s poor customer service, wholesale efforts at closing stations and reducing customer service, or well-meaning customer-centric policies developed at executive levels that fail to materialize out on the working railroad because they’re slow-rolled through the intervening layers.

4. The next CEO needs the tenacity and creativity to fight relentlessly for service operated with modern locomotives and passenger cars, outfitted with modern amenities on a first-world transportation infrastructure.

It is appalling that the greatest nation in the world operates trains with aging, unreliable rolling stock which, in some cases, requires hand-machined parts for support. This is not only embarrassing but untenable and poor business practice. But Amtrak has had its hands tied on making the kinds of capital investments that any other company would be able to make. Creative financing vehicles are needed that can break the logjam while retaining careful stewardship of taxpayer dollars.

The new CEO should be driven by the desire to find new ways for Amtrak to gain access to the modern, efficient and cost-saving locomotives and passenger coaches it needs to offer modern conveniences and respectable service. Replacing the existing fleet will cut operating costs and boost revenues, and new rolling stock will increase revenue capacity, adding seat inventory on existing routes and adding cars needed to restore additional routes to close gaps in the national network. U.S. regulators can help, by promoting new federal rolling-stock specifications that open the door to modern higher-performing designs that are dramatically safer and more operationally efficient.

5. The next CEO should be an evangelist for truly customer-focused service, with modern amenities on-board, safe and reliable accommodation and nourishing and pleasing food and beverages.

Companies that survive and thrive in today’s highly competitive and choice-saturated market are those that can keep their promises to customers, day in and day out. There is more to running a national passenger-rail network than simply operating 300 trains safely each day. The right Amtrak CEO will be able to make this case clearly to those inside government and outside who criticize Amtrak for not behaving like a “real company” while simultaneously handcuffing management with strictures and requirements that no private-sector executive would ever face.

The next CEO needs to want to run a railroad reliable enough, pleasant enough, fast enough and exciting enough to attract new fare-paying passengers. Every new dollar brought in can reduce the amount of federal investment required.

Our members believe that from a practical, day-to-day point of view, Amtrak’s CEO does not manage the railroad but leads a small group of senior executives who, in turn, manage staffs that run core functions. Amtrak’s CEO has no need to be able to run every function alone, like a naval ship captain. What Amtrak needs now is an inspirational leader with a strong vision for the future, a commitment to customers and staff alike, and the personality and character to bring the entire Amtrak team of employees and stakeholders together to turn the vision into reality.

Jim Mathews
President & CEO