Rail is real
D:F interviews David Gunn

Beech Grove goes back to work

$1.2 billion should be enough, CEO says

 

This is a lightly edited transcript of an interview with David Gunn, Amtrak’s president and CEO. D:F’s Wes Vernon interviewed Gunn in his Union Station office on July 31. – Ed.

 

By Wes Vernon
Washington correspondent

VERNON: Joe McHugh [Amtrak Director of Government Affairs] told me Monday night prior to the accident in Kensington (where the Capital Limited derailed) you had 92 cars out of service, sitting idle in those yards.

GUNN: Yes, at Beech Grove, but we lost eight more.

VERNON: So you have 100 cars.

GUNN: Well, it’s 105 cars, actually...

VERNON: Wow, 105 cars, that’s a lot of equipment.

GUNN: It’s a disaster.

VERNON: You have a bill in Congress while you’re waiting for repairs, but I understand you’re not waiting for that.

GUNN: First of all, we’ve got a loan from DOT for $100 million, then the Congress put in a supplemental appropriations $205 million which is not restricted, it’s just operating cash. It’s not for any specific purpose. This will keep us alive in the fall. We requested $1.2 billion next year in prior appropriation, which is the money that actually the previous management put in. I didn’t change it. It’s tight, but I think it’s doable.

What I had planned to do, to the extent I could, was to make significant reductions in non-essential stuff here at Amtrak and put the money into car rebuilding, track and so forth. That was going to happen. We were going to do that in the 2003 budget, which starts in October.

VERNON: So you do have money to start doing that?

GUNN: Well, whether we have the money or not, we’re going to start doing it.

VERNON: How can you do it without it the money?

GUNN: Well, what I’m doing is... I have enough money to begin cranking up, and I’ve ordered the operating department to begin mobilizing and rebuilding cars, and also restore some level of overhaul on these Amfleet cars. We don’t know what our appropriations will be next year, but it doesn’t matter, because if they’re not going to give us more money to run Amtrak we’ll just go out of business with our shops up and running. If they give us enough money we’ll have rebuilt cars. In other words, we’re at a point where it doesn’t matter. We have to do this; we have to do it if we’re going to run the railroad.

VERNON: So you’re saying...

GUNN: I’m betting on the come, is what I’m doing. [He expects to get the cash-Ed.]

I can fund a lot of it internally, assuming that Amtrak is funded. We have an operation and within that operation I can take resources and redirect them to overhaul, that’s what I intend to do. The big question is, ‘is the operation going to be funded?’

I don’t know. I think so; I think we have a fair amount support over there for the $1.2 billion.

VERNON: If I understand you correctly, you’re saying it’s $1.2 billion or nothing.

GUNN: No, I’m saying $1.2 billion is the amount we have asked for, they can give us $1.4 and we’ll...

VERNON: What if they give you just...

GUNN: $500 million?

VERNON: $900 million?

GUNN: It gets real chancy; we’ll have another cash crisis.

VERNON: Okay.

GUNN: Obviously you can play the ‘salami’ game, you say, “Well, what if they give you $1.1 billion, $999 million.... What’s one dollar? Can you live without one dollar? Then we can go down and play that game.

I’m not sure at this point. The number we’re focusing on is $1.2 billion. That is going to be very tight.

VERNON: “There’s also something that was slipped into the Homeland Security bill for $55 million to help you repair those cars. Now, don’t you need that too?”

GUNN: Well, look, ultimately we need more than $1.2 billion but – and if – we get an added block of funding that’s fine but money is money. What you have to do is, you have to look at Amtrak’s operation, what does it cost to run it on a day-to-day basis. What do you need in the way of capital and heavy maintenance for the existing operation? Forget all this expansionary stuff.

Basically what we’ve said is, the $1.2 billion is probably doable for the next year, what I just said; but it would be very tight because we have a lot of obligations and prior deals that they (previous Amtrak management) made, like New York State on the Turbotrain and Pennsylvania on the Harrisburg Line. Things that chip away at the $1.2 million. I think that within the $1.2, even after taking out some of these other deals and taking out the debt repayment, which has to come out of it, the $100 million has to be paid back. On top of that, we now have to pay some of the $100 million a year in servicing our debt. That comes out of that. So you know it keeps chipping away at that number. If it’s $1.2 million, I think we can survive, and there will be enough money to do the car overhauls, get them back up and running, and get the track, do the essential stuff on the infrastructure. Would another $50 million make it easier? You bet. Are there good ways to spend that? You bet. But I’m not...

VERNON: You’re not counting on it.

GUNN: Well, you must deal with the totals. This business of saying, you know, look it’s like a human being if you need a 1,000 calories a day or 2,000 calories a day to survive, all right? And somebody says we’re not going to give you that but we’re going to give you 500 calories a day so you can run a marathon. Well, I mean, it doesn’t make any sense.

You see, you have to view this thing in totality. Do we need the money for wrecked and damaged cars?

Yep! – But what we really need is to have an appropriation that is not tied down with a lot of specifics that allows us to fund the operating deficit which is going to be a half billion dollars, give or take, probably $550 (million) and fund the heavy repair program which should probably should be classified as capital, but also might be put in the operating budget. That’s an accounting decision. But we know we need to spend a couple hundred million dollars in cars, we know that, next year; but we think we can spend it.

VERNON: well, a diner and a lounge were totaled at Kensington, also a coach, but, I mean, there are plenty of coaches, I hear, but there aren’t too many of the diners and lounges.

GUNN: we’re short, very short

VERNON: now you’re going to have to cut back on service because of that. I’m riding the Capitol Limited and the California Zephyr in a couple of weeks and I’m beginning to wonder if my train is going to be fully equipped in either direction.

GUNN: It won’t be. The Zephyr should be all right, but the Capital... we’re in trouble. They’re just trying to put together a plan for the Capital now. We’ve run out of cars, and the only way they’re going to be able to do it is speed up some of the turns in Chicago, it’s the only way. At this point I’m not going to make any predictions.

VERNON: So we may get a bucket of chicken instead of a dining car?

GUNN: It’s a very serious situation.

VERNON: You had to terminate the “Cap” in Pittsburgh? (for one day)?

GUNN: Yes, but that wasn’t due to equipment. That was due to tracks. As we said after the last derailment, one more derailment and we would have trouble meeting our service – that’s where we are. I haven’t had a chance to go downstairs and find where they are, but as of last night they were still scrambling to try and figure out how to put together a Capital Limited. There are a number of things we could do in the long run. I mean, we’ve got this; we really hurt ourselves on our transcontinental train. This express business and all the switching consume enormous amounts of time.

VERNON: And does it make enough money to really make it worth it?

GUNN: No, I do not think so.

VERNON: In other words, you want to eliminate the express service.

GUNN: Well, we’re taking a hard look at it. There’s no question on some of these issues.

VERNON: This morning, Tom Ramstack in the Washington Times says “the track segment where the Amtrak train derailed would have withstood the heat without buckling if it had been properly maintained, railroad track engineers say. The temperature was 97 degrees, the temperature on the track reached 118 degrees, and an engineer with the FRA says that good track should be able to withstand those force levels with no problem.” Now, that raises issues between Amtrak and CSX doesn’t it?

GUNN: I’m not going to argue with the engineer (chuckle).

VERNON: So what are you going to do? What can you do?

GUNN: I don’t want to discuss our relationship with CSX. Those statements stand on their own. If CSX disagrees with them, CSX can say it on their own, but I’m certainly not going to argue.

VERNON: Anything you have to say would be with them behind closed doors, I guess in negotiating sessions?

GUNN: It’s their railroad. It was their track. That statement goes to their maintenance practices and how they manage their railroad, and they should respond to them.

VERNON: Well, the freight railroads and the AAR have contended for a long time that they are not reimbursed for the use of their trackage by AMTRAK at market levels.

GUNN: That’s a red herring. I mean, I’m sorry, but first of all, there’s no market level for passenger trains riding over their tracks; and secondly, I’ve never seen a railroad say, “For this, you get 90 mph track.” We are a very small part of the tonnage going over their railroad and, as you know, in most cases it’s one train a day out of maybe 30, 40 trains, so I really think that the problem is that the railroads cannot say their track problems are caused by Amtrak. They cannot say that. They can say they wish they had more money, that’s fair. If they want more money, that’s fine, they can say that; but they can’t say that Amtrak causes the track problems.

VERNON: No, no I wasn’t linking it to that.

GUNN: How much money – I mean, what do they mean by “market based?” All they’re trying to do is squeeze a little more money, which I understand. I’d like to squeeze a little less, but the question there is: what do they need to maintain a proper track structure? What do they need? One train a day is not going to be enough money coming from Amtrak. They don’t have enough money to maintain their track if that’s what they’re saying, but I guess I don’t know if that’s what they’re saying. But if they are...

VERNON: Senator Hollings has a bill out there, his committee approved it 20-3, very comprehensive, provides not only for upgrading the current Amtrak system, but also for serious first step towards building a high-speed rail network. If that bill dies, will that also doom Amtrak?

GUNN: My sense is there’s a lot of support, there is a lot of support for rail. I think the public is way ahead of the politicians, that most people know that our continued reliance on roads and airlines for short hops is a failed strategy. You can’t build more roads in urban areas. I was at Montgomery County, Maryland last night. The Highway Department wants to build a connector to relieve congestion and you know, everybody knows, that’s a crock. If they build a connector to relieve congestion within a year that connector will be congested. It’s a self-fulfilling prophecy. You build a road, they will come, and they will fill it up – and the public understands that. The public has figured it out: that the highway engineers and the construction people and the oil industry have led us down a garden path. We are now to the point that we’re choking on our air, we’re physically choking on the space that we require, that the highways take up. We’re not going to build a lot more interstates where we need them to try and resolve congestion by highway, so I think there’s a general feeling that rail has an answer. If the rail industry – and we’re in that, obviously; we’re the spokespersons for that, if we can actually act together and provide some realistic cost-effective solutions for some of these corridors. So I think the Hollings bill is a great bill. I’m not criticizing the bill, but I think there’s a lot more pressure to deal with the transportation problems in this country moving people, so you can’t say that the whole thing is contingent upon one thread. That’s not going to be the case.

I think the Hollings bill has a lot to be said for it, I’m not criticizing it; I’m just saying that you don’t bet the whole ranch on that one thing. He represents an attitude that is becoming much more prevalent.

VERNON: Well you said in the past “I don’t do politics,” yet you knew when you took this job you have to deal with 535 politicians plus some people downtown...

GUNN: I’m not sure I ever said I don’t do politics I probably said...

VERNON: I saw that quote somewhere.

GUNN: I know, but I think that what I’ve always said is I much prefer running the railroad as opposed to politicking. It doesn’t mean I don’t deal with the political side. I’ve obviously been at this business within the public sector for since 1974, so that’s almost 30 years, and obviously I’ve had to do my share of convincing politicians; but I am not a politician.

VERNON: Well, have you had a discussion with Mitch Daniels the White House Budget Director?

GUNN: Yes

VERNON: Okay. Tell me how some of that goes.

GUNN: I think that when you deal with the government... well, take the Administration [for example]. There is no consensus within the Administration on what to do with Amtrak. It’s very clear Mitch Daniels would like to see us go bankrupt and get rid of us. We are just a nuisance to him and a source of expenses. On the other hand, I think there are people at DOT, and I’m sure that there are people in the White House, who think that there may be a need for a little more proactive transportation policy.

VERNON: Well you have (Health and Human Services Secretary) Tommy Thompson in your corner. But the trouble is, he’s in the wrong job.

GUNN: Look what’s going on. I think you’re never going to convince everybody that what we’re saying or proposing is the right thing to do, or what rail proponents say is the right thing to do. What I’m saying here is that you pick up enough support so that you carry the day. I mean, this is not a case where everybody has to agree to one solution. I can be, in one sense, sympathetic to Mitch Daniels because he has an enormous budget problem, enormous problem; but I think that what they’re doing, the attempt to put us under, and it’s ludicrous. It means they don’t understand the economics of Amtrak. If Amtrak made the decision tomorrow to go out of the long-haul business, we’d save the first full year of being out of the long haul business. We might save $18 –20 million – might! What that means is that if they really want to get rid of Amtrak and do it legally, they’ve got to fund us at least for a couple of years.

VERNON: Severance pay?

GUNN: Yes. I mean, do they want to fund us and run trains or fund us and not run trains? It’s going to cost them the same either way.

VERNON: Yes.

GUNN: So, I think that what I would say is that if someone is serious about doing us in, they better at least study the situation and have a plan that is real, although I’m not going to help them do that. You have a total divergence of views on this subject. I’ve met with a lot of the Senate and the House and even there, you have tremendous divergence of views, although you have a lot of support. That’s why I’m saying I really think that if Amtrak can get its own house in order in terms of its finances, and be absolutely clear about what is going on here, and prove that we are an efficient custodian of public money, I think you got a lot of support over there. I think Amtrak will have a better time of it – and the other thing is, I think we’ve reached [the end of] this ‘glidepath’ notion. If that isn’t dead now, it never will be because we have been really, really straightforward with what the economic reality of Amtrak is.

VERNON: Well, you know that there are some questions about bookkeeping under the previous management. The Amtrak Reform Council (was) mystified by what they called the “smoke and mirrors” they got. Were you surprised when you took over and found the books in – I guess –you would describe it as “a mess?”

GUNN: Well, I knew that Amtrak was in big trouble. I understood that when I took the job, but what I didn’t understand was the fact that they literally were having difficulty closing their books. I did not understand that. There were hundreds of millions of dollars for adjustments that had to be made to 2001 and prior years income statements. It was like $200 million worth of adjustments. I didn’t understand that; but that’s being straightened out. We’ve got our books in compliance with Generally Accepted Accounting Principles (GAAP), and the chief financial officer that we have now is a very straightforward financial type person.

I’m talking about Deno Bokas, The acting CFO. I’m going to tell the board I’m going to appoint him at the board meeting next month. He’s the new CFO, he’s a CPA, and he’s a very straight-forward, no-nonsense financial controller type person. The books will reflect reality.

VERNON: I know you don’t like the blame game, but somebody is responsible for the way the books were kept prior to you coming here. You have to say somebody is responsible The politicians on the Hill, especially the skeptical ones and even some of those who support Amtrak, want answers to that, want to know who’s responsible – accountability?

GUNN: What I’ll do is, I can commit to what we will have from this point forward. These people were all here during the last two to three years. This whole business of the glidepath, I have said, was a situation where the Congress created an absolutely impossible goal with the corporation, and the management pretended they could accomplish it. Now, who’s at fault – Congress, the management, or both of them? If you create crazy incentives through law and then people respond to the incentives and try to accomplish the law, who’s at fault? Is it the Congress? Is it the people? Look, if it had been me, I would have blown the whistle a long time ago and I would have just said, “It’s over.” I would have been much blunter about the nature of the problem. It’s like what I’m doing with the overhaul program. I’m not going to fool around. I have to rebuild cars. You asked, do I have the money, and I’m telling you no, not yet, but I think I’m going to get it, but if I wait until I get it, it’s too late. I won’t be able to spend it. I won’t know until December whether I get $1.2 billion. So what am I going to do? Sit on my thumbs until December? When I don’t have enough cars?

VERNON: (chuckle) In the middle of the night, 2 a.m. December 24th something happens.

GUNN: Yeah, if we waited until December, what would happen to us is we wouldn’t be rebuilding cars until next spring.

VERNON: Getting on another subject here, your relationship with the unions. You’ve had a reputation as being a tough cookie at the bargaining table. You’re talking about cutting back, or at least running a lean operation. United Transportation Union’s lobbyist, Jim “Broken Rail” Brunkenhoefer said a day or two before you took office, “don’t look to labor rolling over and playing dead to any ideas of reviving Amtrak on the backs of its labor force.” You see room for reductions in labor costs?

GUNN: Well, wait a minute; you’re mixing up two things. I agree with him that labor is not the problem per se with Amtrak; we have no disagreement on that. Our wage rates our competitive, in fact they’re better than the freight railroads, so I mean...

VERNON: You mean conductors on Amtrak get more than the freight?

GUNN: No, no, no – we get less. We’re more productive.

VERNON: I see. That’s one of their other complaints, by the way, the fact that their wages are less than the freight.

GUNN: No, no, no; their take-home is competitive. What I’m saying is, our workforce is fairly compensated, that’s really what I’m telling you. I’m not going to argue that they’re the problem. We have some productivity problems internally based upon work rules. That’s a little piece of the problem. We have a management structure which was bloated and out of control. These experiments they had around here with strategic business units and all of that stuff? All that did was confuse authority and responsibility, accountability, and add people you didn’t need to run the railroads. Having said that, we also have some organizational structures.

VERNON: These VPs that you cut back on, what is it, 60 –80, something like that?

GUNN: We had 84 people, I believe, with the title of vice president, assistant vice president, executive vice president, senior vice president, etc. When I’m done, we’ll be down to less than 20 people – 12 or 14 who actually have “vice-president” in their title, and there will be three or four other people of that rank like chief operating officer, chief financial officer, and general counsel.

VERNON: Okay, well, how many of those people actually got pink slips – in the past some of them were just shuffled around a little bit.

GUNN: It’s gone in terms of the number of people who are actually going to lose their jobs – some have left and we are in the process of notifying people whose jobs have been abolished and so forth. I don’t want to get too specific until that gets out, but there’s no question that on the issue of productivity we have got to be tough on all levels of this company. You can’t solve the problem just by canning a few VPs. We will be tough on the management and other levels, supervision and hourly. For example, we’re in the process of downsizing our telephone reservations system because the number of tickets sold by human with a telephone call is dropping as we shift to the internet.

VERNON: Automated machines?

GUNN: “Automated machines, so if the call volume drops, I need to reduce my coverage.

VERNON: Now you were saying a minute ago that labor was not part of the problem, obviously it isn’t because...

GUNN: No, what I said was labor is – you have to be careful of sweeping statements – I’m not solving my problem on the back of labor, that’s true, but there are areas we want to improve productivity, and that’s between our unions and us, but it’s not a sweeping thing. We have some issues of work rules and manning issues that we think we could make changes that would make sense and would save us some money.

VERNON: Let me say this. I use your long-distance service something like three, four times a year. I’ve seen dining cars filled to the brim with hungry people – and two dining car attendants to handle that whole crowd. Obviously you can only go so far. That raises the question maybe you’re going to cut back on the service, maybe not having dining cars on these trains?

GUNN: No, no, no. The last people you want to impact are the people who are actually serving the public and doing useful work, but we have areas where you can look at the way they were (structured). With this strategic business unit, you had a lot of duplication in terms of overhead function. That can be eliminated. I think we’ve had areas where we had too much supervision, we’ve had areas where we’ve had too little supervision, so it’s hard and I shouldn’t make a sweeping statement.

You had over a 100 people doing planning, and I’ve never seen such a mess in my life. I mean, everybody is running off in every direction. When you have a meeting, there were 10 people in the meeting, nobody ever made any decisions, nobody was in charge, and everybody had an opinion. We’re dropping that back to less than 40 actual planning people. It will be a tight function; there will be people who have a responsibility for specific areas – that’s it!

VERNON: Are any routes going to go?

GUNN: No, I’ve said no, unless we totally run out of equipment.

VERNON: Of course, that’s a possibility too.

GUNN: Nah, we’ll get some equipment. Once we get the shops going, we’ll be able to begin to get the stuff back.

VERNON: There are some people, including some politicians on the Hill, mainly those who are critical of Amtrak, and some who live in crowded corridors who want their service but say that the long distance trains are losing too much money, their too much of a drag.

GUNN: Now wait – the long distance trains are a red herring. If you look at Amtrak as a whole, commuter services are supposed to be self-sufficient. In other words, we get paid what we cost. Then you have the intercity, the long distance trains. Then you have the corridor, shorter haul type trains – they all lose money! Not the commuter, but the long distance and the short haul.

The Northeast corridor does not make money. It’s an absolute fantasy and in some sense it was perpetuated by this glidepath, where people were “Oh, we’re going to be making money and we’ll get the Acelas and we’ll make...” It’s not true. The Northeast Corridor barely breaks even on above the rail costs, and it requires enormous amounts of capital. I mean, hundreds of millions of dollars just to keep running. The idea that getting rid of the long-haul trains leaves you with a profitable core is not true. The long-distance trains probably lose about $300 million a year incrementally. Okay, you get rid of them, [but] you’ve still got an enormous deficit – plus you need hundreds of millions of dollars of capital. Use the $1.2 billion – these are all rough numbers – but if I say I need $1.2 billion and everyone says get rid of the long haul trains, okay, now I need $900 million.

VERNON: Okay. Well, let’s look at it.

GUNN: That’s the way the numbers work.

VERNON: Let’s look at it from the other end of the telescope. Sen. Patty Murray, who heads the Transportation Appropriation Subcommittee, thinks the Northeast Corridor gets too much at the expense of (others); her state has to pay out to have the kind of service... (for service the Northeast Corridor gets for nothing).

GUNN: She is absolutely correct, there is a great inequity in terms of the funding of services. New York State gets a free ride, relatively speaking. Her state pays the incremental deficit plus contributes to the capital – she’s right, but I’ll go back to my analogy of the human being needing 2,000 calories and is only getting 1,500 but you don’t solve the problem by moving the 1,500 calories around. You’ve got to get the funding up to the point where you have enough money to deal with all of your problems.

Now I don’t really care, I mean I care, but it’s not a priority whether it’s federal money or state money. What I need is enough money to run the services and maintain the plant and equipment. In the reauthorization process, I believe that a lot of people are coming to the conclusion that we need a transit-type solution. I don’t know if you’re familiar with how transit is funded, but it works. There is a set match for capital, 20 percent local, and 80 percent federal. That’s it. You want to build a bus garage in Keokuk, Iowa you come in with your 20 percent, and they’ll match it, and give you the money to build the bus garage.

VERNON: So you think that the future of Amtrak is there’s going to be more state input, in other words.

GUNN: Absolutely, absolutely.

VERNON: Okay...Pennsylvania, New York, Maryland are going to have to kick in money, they’re not used to that.

GUNN: Whoa, whoa, wait a minute. The problem you got here is that if everything is federally funded, there’s no basis for allocating the resources. Every politician wants to get his or her share of the barrel, you know? What’s in the barrel? There’s no way of allocating it. You have the money (but) nothing gets produced that is a real victory for rail. If you want to see rail service survive and see high-speed corridors begin to grow around the country, you must focus your attention on the real ones.

You know somebody who wants a high-speed corridor between Telluride and Durango for example. The way this works is, if it’s all federal money, then it comes down to the clout of the politician over here whether they control the appropriations. It isn’t based upon transportation need and so forth. What you’ve got to do is, you’ve got to have a system where, if somebody wants a corridor, they’ve got to put up earnest money – and states are willing to do this

I would submit for example, if New York State wants to really beef up the Empire Service, then in the future, we’re going to be in a situation where you say fine, this is the deficit. (This business) where you have federal money running a deficit operation in Maine or wherever with no state input, you’ll never have enough money to meet the demand because this is an expensive business, and if you don’t allocate your capital and your operating subsidies to markets where you have a real shot at winning the hearts and minds of the passengers and running a good service that really makes a difference like the Northeast Corridor, or the San Diegans, like the trains in California. If you don’t have the locals having to put in some money, it’s never going to work because you’ll have the powerful political structure over here. You know, all politics is local... Try to force and beat the money into local projects.

VERNON: That’s the philosophy behind (House Transportation Chairman) Don Young’s bill, more or less; get more state input in to this.

GUNN: But I think everybody is sort of coming to this conclusion that it should be a fair process. Now, in the case of the Northeast Corridor, and the states that get served by the Northeast Corridor, their operating subsidy will be less than a high-speed corridor in the Midwest because that’s the way the numbers come out.

VERNON: There’s a more density of ridership.

GUNN: That’s right, that’s right, but (as to) the capital, we’re going through this in the state of New York. They built this new station in Rensselaer and now they’re trying to fund it, which they should have thought of before they built it, and now they’re trying to put pressure on us to fund it. How can I fund that? How can I put federal money into funding a local thing there when I’m asking Patty Murray or her state to kick in top dollar? It doesn’t work.

VERNON: The Acela. You’ve got these sleek trains capable of doing 150 mph, but they only do it for 18 miles (on the whole trip) from Boston to Washington. You think that’s putting the cart before the horse? They should have re-electrified the NEC south of New York first?

GUNN: We need new equipment. (With) the Acela you’ve got to separate the concept of a high-speed train from what we did, unfortunately. We’re having a lot of trouble with the Acelas, I don’t know if you’re aware of that.

VERNON: In what respect?

GUNN: Reliability and availability.

VERNON: I know about availability...

GUNN: ...and reliability, they’re much less reliable than an AEM-7 [4,000HP electric locomotive].

VERNON: Of course, you’ve already sued Bombardier.

GUNN: No, forget the lawsuits. I don’t even want to talk about lawsuits. Look, Bombardier built the cars, they engineered the cars and they maintain the cars, and we’re having a lot of trouble with those cars and they’re very expensive; but should we have bought high-speed? We need more equipment. Did we do the right thing there? Time will tell, but I think that clearly this company, if you read the press clips from about a year ago... They were acting as if this were going to be the salvation of Amtrak. It won’t – it’s only a hundred cars in a corridor.

I don’t understand why people didn’t challenge them on that a long time ago. But we need equipment we’re short of equipment. We need high-speed trains. Clearly, the only way you’re going to get to really high-speed service is the way we’re funded and the way we’re proceeding incrementally. For example, the catenary on the south side (of Baltimore).

You don’t have to go rush out and do constant tension everywhere. You don’t have to do that because if the catenary is the constraint in some areas, well then, you only need constant tension where you can run fast. You don’t need constant tension in the Baltimore tunnels because you’re not going to run fast in the Baltimore tunnels. You don’t need it coming into Baltimore, you don’t – and the reason I’m saying this is that it’s probably more expensive to maintain the constant tension than to maintain what we’ve got. So, you have to be smart where you spend your money.

The first thing is to get the existing system back to where it’s in good shape, and then you start making incremental improvements to pick up five minutes here, 10 minutes there. People tend to view this thing like we made a big mistake, and if we had put the money here instead of there everything would be okay. Life isn’t that simple.

VERNON: All right, let’s say, just for the moment, hypothetically David Gunn is not just CEO of Amtrak, he’s dictator of it. He has a vision for what he wants the system to look like. What would it look like?

GUNN: Well, I mean, obviously in the case of the Northeast Corridor, you want to get to the point where you have the ability to run from here (Washington) to Boston in less time than you do now because that’s a real market. Between New York and Washington, we’re pretty dominant, but my view of Amtrak is incremental. My first view is that we have the existing plant and equipment, long distance trains, and everything. The trains are well maintained, they’re clean, they function, the toilets flush, the air conditioning works and we have enough so that we’re not screwing around like we are now with the Capital Limited.

In the case of the Northeast Corridor, the track is in good condition, the interlockings have all been rebuilt, maybe the “cat” poles have all been repainted and the wire is in good working order. That’s the first goal, which is going to take some time.

The next thing I would like to see happen is I’d like to see a corridor success outside of California or the Northeast. I mean, I would really like to see some corridor, whether it’s Midwest around Chicago, you pick...

VERNON: High speed?

GUNN: Yeah, 100 – 110 mph. You have to approach this thing in a realistic incremental fashion. I’d like to see some corridors - This idea that you’re going to have Tokaido (Japanese bullet trains) lines all over the United States isn’t going to happen. We must have some victories out there where we prove what we can do in terms of well thought-out and reliable. Do you remember the way they did the Lindenwold line? (A New Jersey Transit commuter line between Philadelphia and South Jersey).

VERNON: Oh yeah, that was a local effort.

GUNN: Yeah, and they did everything in a very workmanlike, logical fashion. They went to automatic train operation real early, they did automatic fare collection, but it was all done very methodically and it wasn’t one of these great leaps forward where they bring in all the consultants and they run around and promise everybody, well, like the Acela.

You over-commit and the whole thing just sort of flops.

You need a situation where you take a corridor and it is planned on an engineering basis, both for the cars and the track. It’s done based upon the available, proven technology, and one of the things that’s missing in this country is the railroad supply industry has collapsed. There is no railroad supply industry.

VERNON: You have to go to Alstom and Bombardier.

GUNN: Well Bombardier is North American. You have to go to Europe or the Orient...

VERNON: The Budd Company went out of the railroad business a long time ago.

GUNN: What’s happened is like they race around and they’re going to build a corridor, and then what happens is if you don’t have strong operating management on the part of Amtrak or whoever is going to do this, the big thing ends up, “Where are you going to build the cars?” (Some Congressman says) “Build it in my District,” and then suddenly you find yourself setting up car building – which is a very chancy business to start with in the U.S., and they’re setting it up in these abandoned factories with a put-together work force. It’s like rebuilding the Turboliners in New York.

VERNON: When you ran the Metro system here in Washington, you got to the point where the Metro board, appointed by area politicians, tried to micromanage what you were doing – at least you certainly indicated as much. Now you don’t need this job, you don’t need the money you’re getting from Amtrak. What would it take for you to say, “That’s it guys, I’m out of here, I don’t need this.” What will it take to tick you off and send you back to the serenity of Nova Scotia?”

GUNN: I never look at a job that way. Not this job, this job is one where I’m going to be like Sewell Avery. You remember that story?

They carried him out in his chair. So I’m going to do the right thing so if they don’t like it they’re going to act, not me.

VERNON: You’re happy in your job, you like it?

GUNN: Well, yeah.

VERNON: It’s a challenge for you

GUNN: There are days when I get a little depressed, but basically I like it. Yeah. Yeah.

We are also indebted to Roseanne Marini who worked long and hard to transcribe the text for her dad. – Ed.


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