|Mr.David Gunn Letter to Employees
Dear Amtrak Co-workers:
Last week, the Board of Directors and management unveiled a reform
package for Amtrak and a Grant and Legislative request. The FY
funding request is $1.820 billion, the amount necessary to operate
existing system and continue our state-of-good-repair capital program.
The increase we are seeking in FY í06 compared with the current year
for working capital and capital. The operating budget will be
The reform package is a good proposal in my opinion and, if you take
time to read it (it is on our Web site), you will find that the Board
has taken a strong position in support of intercity rail service.
you read it, keep in mind that itís important that you look at the
totality of the package, some of which you may think is good, some
However, overall it is a decent plan and the best Iíve seen
history. It was not done in haste, and not made just for the
None of us should be under any illusion that business as usual will
acceptable in the current political and economic climate ó there will
reform. Either we can attempt to shape it, or we can stand aside
let it happen without our input.
There are a number of very unwise reform proposals floating around that,
I believe, would be extremely harmful to our company and the future
intercity passenger rail. Our proposal is thoughtful and practical,
will form the basis for the coming debate, albeit some portions of
proposal are controversial.
The proposal calls for:
1. Adequate funding for Amtrak in FY í06.
2. Establishment of a federal capital grant program for state investment
in intercity passenger projects (80 percent federal, 20 percent local)
placing rail on the same basis as highways and air. Once in place,
states would be responsible for 100 percent of any operating deficit
after four years.
3. The federal government through Amtrak would be responsible for
bringing the Northeast Corridor up to a state of good repair.
4. Amtrak would remain a vertically integrated company, i.e., corridor
maintenance would not be separated from operations.
5. Organizationally, Amtrak would remain as it is today; however, we
would budget and report on five businesses Ė state corridors, long
distance trains, NEC operations, infrastructure and ancillary businesses.
6. Performance targets would be set for long-distance trains.
requiring more subsidy than these standards would also require
additional state or federal subsidy, or be discontinued. This
happen overnight, but would put pressure on us to improve.
7. It is proposed that the Railway Labor Act be changed (for Amtrak
only) to move us closer to a standard business. For example,
agreements would terminate at the end of the term; management may impose
new terms; unions may exercise self help; and presidential emergency
boards and releases would be eliminated. The reason for this
to allow us to deal with work rule issues that frankly are very
difficult to deal with under the existing law.
8. It is proposed that new employees would be placed in Social Security.
Current employees would be grandfathered in Railroad Retirement.
9. The plan envisions that there would be a growth in competition in
industry for both services and possibly operations. The states
become the purchaser and have the right to select the most efficient
10. Lastly, our debt of some $3.8 billion would be assumed by the
federal government, thereby removing the need for nearly $300 million
Under this plan it is important that we be in a competitive position,
which is why the company is seeking work-rule changes and the change
Social Security. For example, we have already lost business to
competitors who organize their maintenance activities based on
industrial vs. craft lines and are covered by Social Security.
we recently lost the opportunity to bring Acela overhaul work to the
Bear, DE, shop because of our inability to organize our forces
efficiently. The current rules are based on existing craft distinctions
and scope rules, and it is now clear to me that this has to be changed
if we are to survive and if our work force is to have a future in this
industry. If management and labor were more creative, we could
way through this problem.
In sum, while I believe this is a good plan, I know some portions of
are controversial. However, I would remind you that reform will
and we can either shape that reform or be its victim. What it
down to is unless we change, we will not survive.
Our Board has shifted the debate and I would urge all to understand
is proposed and to support responsible change. There is much
proposal for all of us to support. We should limit our disagreements
the extent possible.
Our next hearing will be this Wednesday, April 27, before the House
Appropriations Subcommittee. I will testify on behalf of the
Following that, Amtrak Board Chairman David Laney has been asked to
appear with me on a panel before a Senate Appropriations Subcommittee
hearing on May 12. We expect the House Transportation and
Infrastructure Committee will hold general oversight hearings beginning
How some of these proposals actually pan out will be the subject of
discussion over the course of this year and maybe the next. No
really knows exactly what the outcome of all of this will be.
I will keep you posted as things develop and on our public appearances
before the United States Congress.
/s/ David L. Gunn
P.S. Tomorrow I will be talking about this proposal on C-SPANís
Washington Journal television program from 9 a.m. to 9:45 a.m., ET.
in if you can.
to Home Page