In April, Trains filed a Freedom of Information Act request asking for details of their total compensation, including bonuses. three months ago) this nation significantly under-invested in rail infrastructure. In 2017, Amtrak sharply curtailed the amount of information publicly disclosed in its Monthly Performance Report (from 66 pages in August to 7 pages in September). Mr. Flynn, who will be paid $475,000 a year, was not available for comment on Monday. and long-distance bookings are down 64%. The other big men seem to have at least a basic grasp on the value of the LD network, and the new STB redos Amtraks accounting to make it less murky. Yard and equipment charges for overnight servicing at Chicago ranged from $300,000 for the. As America increasingly is sheltering in place, losing unprecedented numbers of jobs and retirement savings, fearful of COVID-19, and facing a stress level unfamiliar except to those who have endured war zones, Amtrak and its workforce face only unpleasant choices if the railroad and their jobs are to . The goal is to keep as many people employed as possible, Anderson said. The new performance management process and Short-Term Incentive Plan reward employees based on their performance as it relates to our strategic plan, former Executive Vice President and Chief Human Capital Officer Barry Melnkovic told the in-house Amtrak Ink publication in 2015. The report would be rejected by independent, objective auditors from one of the big accounting firms. Photo courtesy Amtrak. Accountability is a something that no longer exists. General chairmen need to get engaged and figure out how to do this if we are to avoid an involuntary furlough, given that we dont have any business anymore, Anderson said. In theory, choosing an independent entity like Volpe to devise an accounting system would help management keep the company solvent. Amtrak, the national railroad that is caught in a political stalemate over its pleas for help saving century-old infrastructure in New York City, has chosen its next leader. Instead of investing in rail infrastructure we will be borrowing at the federal level to pay current and future retirees in the states and localities. Projects or ideas for discretionary money Amtrak is on pace to lose $1 billion in revenue this year due to the coronavirus, Gardner wrote in the message. It is calculated by type of asset, such as a Viewliner or locomotive, and the amount shows up as an expense charged against the route to which it is assigned. Without Amtraks survival, there are no that unpaid leave, uncompensated reduced hours and early retirement be taken A comparison of the relative ridership drops (NEC vs. LD Amtrak trains) doesnt make strong case for the NEC business focus of Amtrak. Incoming CEO William Flynn will succeed Richard Anderson on April 15. As for Amtraks current travails, Anderson said the railroad is in line for a $500 million congressional grant in the first of expected stimulus measures intended as a financial bandage through June. And without that access, he as well as everyone outside of the organization, with the exception of the auditors and regulators, is just guessing. [8] On October 11, 2016, Anderson announced his retirement from the Board of Directors effective on the same day. Now with the outbreak, Anderson said, full year revenues are projected to be down $1 billion and the company projects a $840 million loss even with expense reductions of $110-$150 million. This week Amtrak, following the practice of U.S. airlines, started limiting refunds and passengers ability to make changes to most lowest-price train tickets. Of [1], Anderson entered the aviation industry after accepting a legal position at Continental Airlines and served as the airline's representative during the investigation of Continental Airlines Flight 1713 in 1987. When the Southwest Chief rumbles across New Mexicos Raton Pass, with sleeping-car passengers paying as much as $1,058 to ride in a roomette, what is the trains revenue-versus-cost effect on Amtraks bottom line? Accordingly, they dont have an basis to criticize Amtraks accounting policies, procedures, and practices. Former Amtrak CEO Moorman and current CEO Anderson both publicly stated, and Amtrak documents confirm, that they came out of retirement to work without a salary. a lame-duckpresident (mr. anderson) should not state policy; that is the job of new president, mr. flynn. His father, Hale, was an office worker for the Santa Fe in his native Texas. Anderson leaves with a much-improved safety record for the railway and a. We have reduced Our Standards: The Thomson Reuters Trust Principles. Richard H. Anderson (born May 2, 1955) is a retired American lawyer and business executive. repair. if it is deemedessential that the new policies be articulated immediately, mr. flynn should step in early to do so. Why Sign In? ANDREW Another possible outcome is that the stimulous (money that the government will print if it doesnt first run out of ink) would include a rider to maintain all current routes. There must be something he can be charged with. The key is consistency of the allocations, rumbustiousness of the methods, and strong follow-up audits. Railroad management plus government incompetence. Until the end of last year, Mr. Flynn ran Atlas Air, which is based in Purchase, N.Y., and claims to have the worlds largest fleet of large cargo planes in the world. Amtrak is not a government agency, but it isnt a private corporation either. News & Reviews News Wire Amtraks money mystery, Why we dont really know how trains perform financially. It is, however, near Amtraks Hialeah maintenance facility. It aint gonna happen. There is no point in operating empty trains. The resulting process has 60,000 allocation rules, with 1,600 responsibility centers grouped into nine similar cost families (for example, transportation operations), which are divided into 36 subfamilies (onboard service), and finally 44 subcategories (linen). The real miracle is that the railroad has survived into its 50th year. voluntarily; and an end to all overtime. Its a miracle that ANY trains run. Amtrak Contact 202 906.3860 About Amtrak Amtrak offers a more comfortable and convenient travel experience with free Wi-Fi on most trains, plenty of leg room and no middle seat. Dismiss the Board, fire the accountants and senior management, and hire people with a sense of mission and service. . In this day and age (that is, the status quo prior to coronavirus), once service is gone on a route, it is extremely difficult to get it restored. Two things we need to go away Anderson & the virus. Under current directives, which provide no incentive for revenue gains (because the companys regional marketing positions have been eliminated), what Amtrak manager would advocate for the venue change? WASHINGTON At a weekly town hall telephone meeting with employees on Friday afternoon, Amtrak President and CEO Richard Anderson painted a grim picture of the ways in which the Covid-19 coronavirus crisis has impacted demand. government restrictions are put in place, Anderson said. Now the return is deeply into the negative numbers, so much so that pensions might be forced into bankruptcy in the near future. Fare-paying passengers have vanishedalmost entirely on Northeast Corridor Acela trains; significantly on all others. Sign-up for email today! View Fire Protection Salaries List. Its been a well known fact for many years that Amtraks funny money accounting system would not stand up to GAAP rules. They allocate costs in such a way as to make their decisions look good. DOT Inspector Generals report. MIKE Really? This fails to take into account potential revenue lost from such cuts, and reduces passenger options. Dennis Newman. For sure, Anderson, a lame-duck CEO who officially retires In need of about $1 billion in supplemental funding to battle an unprecedented drop in ridership, Amtrak has now taken aggressive" steps to cut the pay of top staff and other measures, the company confirmed Saturday. Get updates and special offers via email from Trains.com brands! Top 10 Salaries. 9/11 and subsequent bankruptcy, emerged even stronger. ", due to significantly reduced demand in key markets, Gov. The average salary for Richard Cottrell employees is around $100,786 per year, or $48 per hour. Amtrak service is vital to millions of Americans across the nation and by improving the customer experience, driving safety, and strengthening our partnership with states and other stakeholders, we can do much more for the American people, Flynn said in a statement. [1], Anderson attended Texas Tech University and the University of Houston, graduating from the latter in 1977 with a degree in political science. In November, Amtrak said it had set records for ridership, revenue and financial performance for the year ended Sept. 30, 2019, including 32.5 million customer trips, a year-over-year increase of 800,000 passengers. . The American people seem to be content to just listen to the conversation, blindly accept the consequences of inaction, and then wonder why somebody didnt do something about the situation before it was too late. during his three-year tenure at Amtrak, such as reducing food service and President. Amtrak Mission, Vision & Values Amtrak Mission & Values Amtrak Mission: Delivering intercity transportation with superior safety, customer service and financial excellence. During his three years in charge, Amtrak invested in new equipment, including faster Acela trains that he said would allow for daily nonstop service between New York and Washington every weekday morning and evening. Like every major accounting system, mistakes are made, like assigning snow shoveling expenses to Miami. Much is dependent on enlightened labor leaders facing harsh reality with learned wisdom, rather than union hall polemics. Mr. Anderson said he believed that Amtrak is now seen by its customers and elected officials as a trusted agency that invests wisely and operates at a high level of customer service.. For example, Amtrak claims that the percentage of costs allocations has decreased from 80 percent to less than 50 percent. In Miami? Georgiette Morgan-Thomas heads on the platform at Penn Station in New York to board the Amtrak #89 train which leaves at 5:51 a.m. May 3, 2019. makes me hopeful for the companys future.. Amtrak, which has lost vast sums of money for decades, is expected to report its first operating profit this year. Classic Railroad Scenes: Railroads at Work. In the end, a company is only as good as its people. Does he know how Amtraks inventive compensation processes work, or is he just guessing? For example a state pension fund might be under water if its accountants based pension payments on the expectation of, say, 8% perpetual return in investments when the actual return was well under. Both white papers can be found at Amtrak.com, About Amtrak, Amtrak Facts, Stakeholder FAQs. seeking to curtail long-distance routes. Obviously, if they are posted on Amtraks website, Amtrak owns the authorship. But there will be no pink slips for MARK Good post. It was developed at the request of Congress in 2005 to definitively categorize the companys expenses, according to how and where they are incurred. What exactly is Anderson supposed to do, run a full schedule of empty trains? Mike, I dont like it when people slam my post, even so Im going to slam yours. Why the GAO doesnt force them to turn their numbers over to an independent auditor I dont know, unless of course that would reveal some back door shenanigans with money and Congressman. But be warned: exactly how Amtrak attributes expenses continues to be shrouded in mystery. All of it! anyone riding those trains. different longer term, Anderson said. Actor: Paths of Glory. Anderson, the former CEO of Delta Air Lines Inc., became co-CEO . safely and reliably, Anderson said. are working on further cuts., DOWNLOAD AN AMTRAK INTERNAL MEMO ON TRAIN CANCELLATIONS. Moreover, he performed his study for an advocacy group with a dog in the hunt, which is not likely to produce an independent outcome. Is there really anyone who knows whats going on? That system failed to provide reliable cost accounting information essential to making prudent business decisions, according to a 2013 U.S. Amazing that Andersons Golden Child the Acela is the first to fall the obviously weak link in the Amtrak chain yet he turns it around to make it sound as if the LD network is the weakest using the Amtrak voodoo accounting to try and back it up. [1] At Northwest, Anderson was initially charged with labor relations and government affairs. So are these new corridors Amtrak is touting the new food source for the NEC beast? dont have a job anymore, and thats what we are working to avoid. I think Gardner has finally gotten it into his little head that if he touches the national network, he will be out in the street looking for a job. Richard Anderson. Too bad he didn't have a "Save Amtrak, Fire Anderson" baseball cap with him. NJ Transit and New Yorks Metropolitan Transportation Authority are seeking bailout funds. These resources play a vital role in ensuring that Amtrak can develop and consistently provide competitive products and services, as well as delivering investments that will sustain, improve, and grow our business.. That deluge accelerated their deterioration, leading to more urgent demands from Amtrak officials for federal funding of a new pair of tunnels. He said he planned to stay on part-time as a consultant through the end of the year to see the completion of the Acela upgrade and the opening of Amtraks new base of operations in New York, at the Moynihan Train Hall across Eighth Avenue from Penn Station. How it accounts for revenue and expense is just a big game played on a giant game board. WASHINGTON, June 26, 2017 /PRNewswire-USNewswire/ -- Amtrak announced that it has named Richard Anderson, a 25-year veteran of the aviation industry, as its next president and chief executive officer. Other questionable allocations or indefensible errors noted in the Passenger Association report include: The Miami error was caught by the station manager there and revealed in the Government Accountability Offices 2016 report, and state operating authorities continue to comb invoices for questionable allocations. He was succeeded by former Chairman and CEO of The Home Depot, Francis Blake. He is not an accountant. As less people travel due to the coronavirus, Amtrak has "taken aggressive measures to cut costs to minimize employee and service impacts. Senator Chuck Schumer, a Democrat from New York who has pressed for federal funding for Amtrak and Gateway,. Amtrak is also suspending its 401(k) matching contribution for management employees through the end of the calendar year. We As a subscriber, you have 10 gift articles to give each month. Text. Now with the outbreak, Anderson said, full year revenues are projected to be down $1 billion and the company projects a $840 million loss even with expense reductions of $110-$150 million. If I had run my business that way, Id be in jail. [10] Anderson assumed the title of President on July 12, 2017. On behalf of the entire Board, we thank you for everything you do for the company. The Department of Transportation administers the RRIF program. and state [supported corridor] trains bearing their share of the national Flynn, 66, has been a successful leader across multiple modes of transportation, including rail, maritime and aviation. suspension of company matching contributions to 401(k) plans; encouragement No they are not. Anderson was born in Galveston, Texas, to Hale Anderson, an office worker for the Atchison, Topeka and Santa Fe Railway, and Frances Anderson, a medical receptionist. Throughout Amtrak, short- and long-term management bonus incentives are tied to slashing expenses. it is interesting to note that an outgoing executive officer with less than a month of time left in his currentposition is stating policies which could affect the organization for a year or more in the future. Join Today! . Misplaced priorities also affect growth of Amtraks existing business. We also present examples we uncovered that attempt to shine a light on a bookkeeping system that distorts a nationwide transportation mission, a mission thousands of current and former employees fought to maintain. Bob has written about all this before, many times. Performance Trackings inherent biases make the investment case hard to prove, with revenue and customer-usefulness benefits buried beneath massive overhead charges that would flow elsewhere as services are discontinued. As for Amtrak, yes, they dont use GAAP and havent ever used it, no one, with the exception of their own accounts knows the true cost of the different services. Whats a billion or two for Amtrak in a bill that will will total two trillion? Wed like to avoid it, but if we cant get the kind of funding out of Congress that we need, then we need to face that issue and will have a contingency plan to do that. Such bonuses may reach to the top of management. Last week, the company reported an operating revenue of $3.3 billion for fiscal year 2019 a 3.6% increase over the last year. BNSF reopens track at site of Wisconsin derailment (updated), Unifor ratifies contract with Canadian National, Driver of truck in accident that killed NS conductor pleads not guilty, Two Metra lines disrupted as Amtrak locomotive derails at Chicago Union Station. Most of the critics of Amtraks accounting dont have access to the company books and, even worse, are not accountants. after fulfilling his three-year commitment to the company. This, of course, aids the claim that those trains are profitable above the rail.. Section 209 of 2008s Passenger Rail Investment and Improvement Act required operating authorities of short-distance trains to pick up a greater percentage of operating costs as determined by Amtrak. That pair of single-track tunnels poses one of the greatest threats to Amtraks service and to transit in the metropolitan area and throughout the Northeast. It is unprecedented in the railroad industry. Mr. Anderson has increased ridership and revenue while doing some airline-style cost-cutting, such as reducing food service on trains and implementing penalties for ticket changes. Sign-up for email today! Flynn succeeds Richard Anderson, who joined Amtrak as CEO in July 2017. the current situation. Hopefully Amtrak and/or Congress will see the wisdom of preserving at least a modicum of service on all routes so that when things improve, it will be a lot easier to ramp up service. In November, Amtrak said it had set records for ridership, revenue and financial performance for the year ended Sept. 30, 2019, including 32.5 million customer trips, a year-over-year increase of. The conference kicked off yesterday at Kansas City Convention Center, Missouri, and will last until March 26th . Democrats who control the U.S. House of Representatives have said they will reject the proposal, which is similar to cuts that have been rebuffed in prior budgets proposed by President Donald Trumps administration. Amtrak President and CEO Richard Anderson, 63, Texas-born and son of an Atchison, Topeka & Santa Fe Railway clerk, persistently rejects interview requests, declining to reveal the origin of his strategy in light of his transportation background being entirely in airline management. Or is all their pro-Amtrak talk just that? Built in the early years of the 20th century, the tunnels had already exceeded their expected life span when Hurricane Sandy flooded them with salt water in 2012.
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