Wednesday, November 09, 2005

Schumer: fired Amtrak CEO is "brilliant"

Previous: Let Amtrak die

Amtrak fires yet another incompetent top executive, but Chuck Schumer lauds him as "a brilliant manager." That reminds me of Carly Fiorina, who had so distinguished a career at HP that Don Luskin said, "Yeah, so well proven she was just fired for it."
Amtrak president Gunn fired

WASHINGTON (AP) -- Amtrak's board of directors on Wednesday fired President David Gunn, saying the debt-laden rail carrier needs "a leader with vision and experience."

Gunn has struggled to maintain Amtrak service amid a sinking financial picture and a push by the White House and some in Congress to recraft it as a group of regional inter-city companies....

Rep. John Mica said Gunn was fired because of a clash over the board's vote in September to authorize splitting off the Northeast Corridor, an idea backed by the Bush administration. The corridor accounts for the largest share of the railroad's ridership.

"David Gunn bucked that idea, so that was the straw that broke the camel's back," said Mica, R-Florida. "He's a very capable operational manager, but he wasn't willing to go along with the dramatic changes that need to be made."

Gunn, who assumed the post in 2002 after having headed transit systems in New York City, Washington and Toronto, could not be reached for comment.

Sen. Charles Schumer, D-New York, who has fought against a Bush administration effort to end subsidies for the struggling passenger rail service, praised Gunn as "a brilliant manager."

The senator called Gunn's removal "a crushing blow to Amtrak's hopes for success and reform."

Other lawmakers said Gunn had become a roadblock to overhauling national rail service.

"I am hopeful that new leadership can open the door for Amtrak to work closely with Congress to achieve meaningful reforms," said Rep. John Sweeney, R-New York.

Amtrak has never made money in its 34-year history and an operating loss of more than $550 million was expected for the fiscal year that ended September 30. The railroad has a debt of more than $3.5 billion.

The White House has called for an end to subsidies for Amtrak, but the House has approved an appropriation of nearly $1.2 billion for this budget year.


In recent months, Amtrak has been besieged by problems up and down the line, from equipment breakdowns to big-ticket budget woes....

A report issued last week by the Government Accountability Office, the auditing arm of Congress, said the company needs to improve the way it monitors performance and oversees its finances in order to reach firm financial footing.

"The company is likely to need outside help in developing a comprehensive approach to address internal control weaknesses and improve the financial information for management and external stakeholders," the report found.

The GAO recommended that the transportation secretary direct the Federal Railroad administrator to: require Amtrak to submit a plan laying out specifically how it will improve its financial operations; provide Amtrak with direction on how to do so; and monitor the railroad's performance and report to Congress on Amtrak's progress.

Transportation Secretary Norman Y. Mineta, who also sits on Amtrak's board, called the report "unusual, if not unprecedented, in the scope of its review and the severity of its indictment." He urged the board to "stop and take a fresh look on how to proceed in the face of this nonpartisan, objective report of systemic failure."
Amtrak has always been besieged by a problem far worse than any failed Acela brakes: it's never made a profit.

Yet why should Amtrak bother to reform when it can continually return to Washington with its hand out, asking for more money? Until the strings are cut, Amtrak has every incentive to continue operating inefficiently, while charging fares too low to realize a profit. And Democrats and Republicans alike are willing to sustain the funding.

The only reform should be to eliminate Amtrak's subsidies completely. Let Amtrak learn to run as a real business, or die.

And does anyone besides me find it "unusual" that Norm Mineta is allowed such an affiliation with Amtrak?

4 Comments:

Blogger Joseph Vranich said...

I agree wholeheartedly with Amtrak's Board that David Gunn's tenure at the agency should be over. On my blog Replacing Amtrak I express similar sentiments to your own in my posting this evening on the subject by stating "The next Amtrak CEO should be turn-around expert, a true reformer, someone who will bring badly needed innovation and imagination to the job while respecting the taxpayers of this country. (Failing that, a liquidation expert would be a good idea.)"

For more thoughts on this visit Replacing Amtrak.

Thursday, November 10, 2005 12:19:00 AM  
Blogger Perry Eidelbus said...

Wow, thank you for the comment, and the visit! Wonderful blog.

Thursday, November 10, 2005 1:38:00 AM  
Anonymous Anonymous said...

The Gunn shot heard around the country yesterday!!!

Gunns reorg of Amtrak was a joke. I am sure Vranich saw that. Gunn shuffled the jobs around (VP's), gave the raises, and changed the titles.

Amtrak managemnet, simply put, has no accoutability. The basic philosophy of the management structe is to build kingdoms, more if better. They do not worry about finances, customer service, opt, or running the railroad like a business, the only care about protecting their kingdoms!!!

State partners have seen for a long time that the structure/accoutabilty is a joke.

Long live the GAO for at last seeing the forest for the trees!!!

Thursday, November 10, 2005 11:13:00 AM  
Anonymous Anonymous said...

David Gunn was a joke to begin with and he needed to go. All he ever was, was a hachet man sent to break up Amtrak. If Amtrak is to survivewhat it needs is a railroader, someone who understands railroading and how to work with other railroads, labor and the state agencies that fund most of the commute systems outside the Northeast Corridor. All of the CEO's since Clater have been failure's, and true, Congress has been throwing good money after bad.

What is needed is a good house cleaning, starting with Division management down. Most of these managers are inexperienced narrow minded micro managers that are trying to build their own little kingdom's within the company. And,if they were not working for Amtrak could not hold a job at cleaning toilets.

This is where the real waste is. Yes, our country needs Amtrak, and yes it needs reform. Hopefully, who ever the next sacrifice is, will start the reform by looking at his/her middle management and start the house cleaning ASAP.

Thursday, November 10, 2005 11:16:00 AM  

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