Passenger Trains > Joe Boardman: "(Amtrak's) cash position becoming a concern"

In a Feb. 9 message to Amtrak employees, CEO Joe Boardman says in part:

"...our cash position is becoming a concern."

He writes of revenue shortfalls and expense overages, and lists some
measures being taken on both sides. Things were not good in FY 2015 and
are not getting any better in FY2016; he continues with, "We are going to
have to take more aggressive actions...some of which will be painful to take."

"Revenues are continuing to decline, and we haven't successfully managed
our costs..."

Full document below, as jpg images.

UPDATE: for nonmembers, the document in PDF format is now on the website
of a passenger rail contractor.  Link:

Joe Boardman...cash position becoming a concern
 



Edited 7 time(s). Last edit at 02/11/16 11:41 by GenePoon.

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Looks as if Joe is rearranging the deck chairs.  Do I hear "Nearer My God to Thee"?
Passenger trains, as we know them, may be about to change again....

why not get rid of our "senior leadership team"?  that would save money.  oh, and don't forget to "be at peace with each other".  looks like no more cruising around in "beech grove" either

The tilt of the floor is a bit higher these days.. Do you think it would be alright if we tack down our chairs with nails? Mine keeps sliding...

"Difficult" could be a code word for LD train-offs.
As for the dollar being strong hurting international sales, the dollar is just as strong now as it was in the late Clinton and very early Bush years, and nothing bad happened. The 3 International trains are all state subsidized anyway. Why didn't he mention falling fuel proces as being ahead of budget ?



Edited 1 time(s). Last edit at 02/11/16 04:21 by joemvcnj.

joemvcnj Wrote:
-------------------------------------------------------
> "Difficult" could be a code word for LD
> train-offs.
> As for the dollar being strong hurting
> international sales, the dollar is just as strong
> now as it was in the late Clinton and very early
> Bush years, and nothing bad happened. The 3
> International trains are all state subsidized
> anyway. Why didn't he mention falling fuel proces
> as being ahead of budget ?

Hard to say what the repercussions will be. Could also mean layoffs, increased workload due to a hiring freeze while attrition continues, no raises, deferred maintenance. What upper management describes to the rank and file as "painful" should not be equated with what railfans consider "painful".

And re: dollar value: ridership and revenue forecasting take previous years' trends into account. The comment regarding the increased value of the dollar was made with regard not to international trains but to foreign tourism, which makes up a small but nonnegligible share of revenue (which is why Amtrak.com is also available German, French, and Japanese). While the exchange rate may be similar to the late 90s/early 2000s, the *recent* trend means that there are fewer tourists from abroad than in the past several years, which means the numbers will lag behind the forecast.

Also, the benefit from falling fuel prices does not outweigh the damage of lost revenue when seats go unsold on trains because driving has become measurable cheaper.

Boardman is retiring this year and E. Hunter Harrison (CP CEO) is also likely to retire this year. Mr Harrison knows how to manage a railroad and in particular knows how to manage operating costs. A second career for Mr Harrison as president of Amtrak?

Bob

Attrition has been heavy the past 3 years .. '75-'80 were real heavy hiring years ... there's nobody left i hired with, save maybe 4-5 guys out of at least 100 ... we've had quite a few guys we worked with bite the dust one, so one of the guys i worked with decided to have everyone get together for retirement luncheons every 2 months while we're all still alive and not see each other at funerals ... our retirement luncheons have grown in the past 2 years from 15-20 attendees 2 years ago to over 50 at the last luncheon last week ... they can't hire enough people to fill the vacancies fast enough ...

There was a huge exodus a year or so ago when they cut the retirement plan.
Acela ridership is down, its passengers shifted to Regional, whose ridership is flat, but they still lost who they had, displaced by Acela riders.
We' ll see if cuts come to these scared cows.
LD winter consist cuts saved them about a milllion last year, which is not much of a dent, though they probably had they budgeted this year.

to those who live in the n.e. corridor area:  have the low gas prices that have brought more people to their vehicles also made the highways more crowded?

66

GenePoon Wrote:
-------------------------------------------------------
> In a Feb. 9 message to Amtrak employees, CEO Joe
> Boardman says in part:
>
> "...our cash position is becoming a concern."
>
> He writes of revenue shortfalls and expense
> overages, and lists some
> measures being taken on both sides. Things were
> not good in FY 2015 and
> are not getting any better in FY2016; he continues
> with, "We are going to
> have to take more aggressive actions...some of
> which will be painful to take."
>
> "Revenues are continuing to decline, and we
> haven't successfully managed
> our costs..."
>
> Full document:

To my way of thinking it would make more sense to cut departures on the NEC than it would on routes where there's only one-a-day.  Maintains the mission of having a national system to the extent that it is. 

Don't know, but MN and LIRR ridership are at record highs, the LIRR the highest since 1949.

http://www.mta.info/news-lirr-metro-north/2016/02/02/metro-north-all-time-high-lirr-highest-1949-remains-busiest

This concept in the above link does not seem to carry forward much to Amtrak:
“But gas prices have sunk to low levels and the trend is continuing. We are seeing the confluence a strengthening regional economy, healthier downtowns around the region, a new generation of millennials who values public transportation, and greater productivity on board our trains through the proliferation of smartphones, tablets and laptops. "

NJT's is up too despite having the highest commuter rail fares and 2nd worst OTP of any commuter railroad in the country. None of these railroads have WiFi on their trains.

Amtrak has not been the least bit proactive in attracting new business, slashing service at Princeton Jct by 67% a few years ago with virtually no weekend service, leaves New Brunswick, home to Rutgers, with weekday token service, and refuses to stop at Secaucus at all, which would enable 1 million people in Bergen, Rockland, and Orange counties direct NJT access to Amtrak. If you ask Amtrak, and we have had Senator Booker's office and Representative Nita Lowey's office do so, they will come up with multi-page letters of bureaucratic babble and cockamamie excuses why it can't be done.

Common sense indicates when you are losing one market segment, you had better shore it up with another. It all comes down to arrogance.



Edited 5 time(s). Last edit at 02/11/16 05:54 by joemvcnj.

goneon66 Wrote:
-------------------------------------------------------
> to those who live in the n.e. corridor area: 
> have the low gas prices that have brought more
> people to their vehicles also made the highways
> more crowded?
>
> 66

​i live in south jersey 5 minutes from the bridges to Philly ... gas prices here are down to $1.45 at a few locations with most between $1.49-$1.55 ... the roads around here are crowded normally so ti be able to tell if more are using hwy would be difficult ... PATCO the 12 mile commuter line to Philly has a steady ridership moreso for convenience and crowded road avoidance ...

very interesting info about commuter train ridership.  thanks for the info.....

66

Gas prices in Missouri have dropped to as low as 1.29--got to be hurting the Missouri River Runners  (KC-STL)

Marty Harrison
Knob Noster, MO

Time to go back to "tri-weekly" on the LD trains

livesteamer Wrote:
-------------------------------------------------------
> Gas prices in Missouri have dropped to as low as
> 1.29--got to be hurting the Missouri River
> Runners  (KC-STL)

any stats on their ridership?

66

While gas prices and train ridership in Missouri may be illustrative, they are also ultimately not relevant.  By foisting off financial responsibility for the Off-Corridor short hauls to the States through legislation that it pushed, Amtrak effectively removed itself from their revenue trends, both positive and negative.  On these trains, Amtrak is a fixed-price contract operator; if there are more or fewer riders, that revenue increase or decrease stays with the State.  It does not go to/from Amtrak.  Furthermore, Amtrak is also constrained on the cost side by contract.  Substantive cuts can not be made without incurring breach of contract.

It is yet another corner into which Amtrak painted itself.



Edited 1 time(s). Last edit at 02/11/16 06:19 by GenePoon.

GenePoon Wrote:
-------------------------------------------------------
> While gas prices and train ridership in Missouri
> may be illustrative, they are also ultimately not
> relevant.  By foisting off financial
> responsibility for the Off-Corridor short hauls to
> the States through legislation that it pushed,
> Amtrak effectively removed itself from their
> revenue trends, both positive and negative.  On
> these trains, Amtrak is a fixed-price contract
> operator; if there are more or fewer riders, that
> revenue increase or decrease stays with the State.
>  It does not go to/from Amtrak.  Furthermore,
> Amtrak is also constrained on the cost side by
> contract.  Substantive cuts can not be made
> without incurring breach of contract.

Gene:

You need to explain this a little better.  Amtrak collects the ticket revenue and cafe sales from the state supported trains, not the states.  The states cut Amtrak a check based on a negotiated rate of costs and expected revenue.

The way you explain it is not how it seems to work at all.  How do you think the states are getting the revenue?

Amtrak seems to have a high percentage of overhead (law, police, management, supervisory, etc) to operating people.


Back when Acela was launched there was a lean and aggressive marketing team. Even to the extent of handing out coupons for future travel at LaGuardia during storms.

The complaints about some lackluster Acela service suggest a 180 change in some places

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