WASHINGTON, D.C. — Three weeks into the job, Amtrak’s new president is proposing steps to reorganize management and release more information to the public about the passenger railroad’s finances.
David Gunn, the new president, is also warning that the railroad will shutdown all service next month unless it gets a $200 million loan in the next three weeks. Gunn said he is optimistic the loan will come through.
Gunn presented his ideas to Amtrak’s governing board in a private meeting Thursday. Amtrak spokesman Bill Schulz said Gunn will outline the board’s response in a memo to employees on Friday.
Several board members did not return phone calls seeking comment.
Gunn wants to consolidate Amtrak’s three railroad operating divisions –Intercity, Northeast Corridor and Amtrak West, which now are distinct business units — within company headquarters in Washington.
Under the plan, Schulz said, the existing division offices in Chicago, Philadelphia and Oakland, Calif., will remain open, but only to handle local operations, not to make policy decisions.
The intent, Gunn said in a memo to employees Wednesday, is to move Amtrak ” back to a traditional railroad structure.”
Gunn also wants to reduce the number of ” vice president” titles from 84 to about 20. The move is not immediately designed to slice jobs or save money, but to focus the company on its basic role as a railroad operator.
Gunn also intends to release detailed information each month on Amtrak’s financial condition.
Gunn took over Amtrak on May 15, succeeding George Warrington. Gunn previously ran transit systems in New York City and Washington.
In a letter Wednesday to employees, Gunn said Amtrak faces a $200 million shortfall from now until Sept. 30 and plans to borrow to fill that gap.
As collateral, Amtrak can use $200 million of the federal appropriation it expects to receive when the new fiscal year begins in October. Amtrak has asked Congress for $1.2 billion.
Amtrak needed money to survive the final months of last fiscal year too. It mortgaged parts of New York’s Pennsylvania Station last summer to get $300 million.
Paul Weyrich, a critic of Amtrak management who served as vice chairman of the congressionally appointed Amtrak Reform Council, praised Gunn’s initial moves and predicted Congress will give Amtrak the money it needs to close the budget gap.
“He’s faced with a dilemma where he just came into office and if he doesn’t get the bailout money, he won’t have the time to implement the kind of reforms that everybody is hoping he’ll be able to implement, ” Weyrich said.
But another member of the reform council, Wendell Cox, said a congressional bailout ” would only perpetuate Amtrak’s bloated cost structure and put off for months or years the next reckoning, which will, of course, be worse.”