The No-Nonsense CEO Has Revived a Railroad and Won Respect From Politicians and Employees
(The Washington Post published the following article by Don Phillips on April 21.)
WASHINGTON — The conventional wisdom on David L. Gunn used to be that he was skilled at fixing broken rail systems but lousy as a politician, a man who could wipe the graffiti off New York’s subways but in time would always shoot himself in the foot.
But now, as he approaches the end of his first full year as president and chief executive of Amtrak, Gunn’s speed and decisiveness in getting the ailing national passenger railroad back on track have at least slowed the Bush administration’s determination to restructure it into far smaller form. He has won over some longtime Amtrak foes in Congress and especially among beaten-down Amtrak employees, some of whom have printed up “Proud to Be Working Under the Gunn” T-shirts.
Gunn’s warning last summer that Amtrak would shut down, and take some commuter services with it, unless it got more money left hard feelings in the administration and some commuter agencies. But he has also given Amtrak’s many critics what they wanted. The blunt talk, independence and quick action that got him pushed out of at least three other jobs earlier in his career may, at least so far, be the biggest things working for him at Amtrak.
And if people do not like what he says or does this time, he has said, he can “just go back to Nova Scotia” and re-retire.
When Gunn has had it with the battling and begging necessary to keep Amtrak alive, he wanders down from Amtrak headquarters into the netherworld of Union Station. When he did it for the first time, employees in the crew rooms and the tunnels were stunned — some said they had never even seen the previous president, George D. Warrington, let alone shot the breeze with him.
“Sometimes,” Gunn says, ” I just need to go down and see a train.”
Or, put another way, sometimes Gunn just is not terribly comfortable acting like a boss even though he has been one so many times.
Gunn, 66, was born in Boston, the grandson of a ship captain, but his heart is in Nova Scotia. His family moved to Cape Breton when Gunn was a small child, and he keeps a home there to which he returns whenever possible. His Nova Scotia roots instilled an ethic that says hard labor is one of life’s callings.
“Physical work is an honorable thing to do,” he said. “There’s no honest job that’s beneath you. If you want me to clean toilets, I’ll clean toilets.”
In Nova Scotia, “stuffed shirts and big shots, they’re not respected,” he said. “People are judged on their willingness to break a sweat.”
Gunn has had a few opportunities to break a sweat at Amtrak.
At least twice, he has been aboard trains that broke down and taken it upon himself to move passengers’ luggage to other trains. He said his employees were perfectly capable of making the bigger decisions, and he could help best by doing some heavy lifting.
In January, on a trip up the Northeast Corridor, Gunn took his first trip aboard Amtrak’s private railroad car. Normally, Gunn insists on riding with the passengers. But on this trip, he and several officials used the private car to meet and entertain rail officials in New York state and Toronto.
As the train roared up the corridor, snow swirled around his railcar’s rear platform and coated the huge picture windows. At the BWI station stop, Gunn hopped up to look for a squeegee and shovel, only car attendant Lou Drummeter found them first.
“I’ll take care of that, Mr. Gunn,” Drummeter said.
“Oh, I can do that,” Gunn replied. Drummeter ignored him.
At each succeeding stop, it was more of the same. Drummeter came back earlier and earlier to take control of the implements, eventually hiding them so Gunn could not find them.
As Gunn protested even more strongly at a New Jersey stop, the 6-foot-plus Drummeter looked down at him and said, “Mr. Gunn, this is my job security.” Gunn plopped back into his chair as others in the car howled with laughter.
“I feel so useless,” Gunn said.
Early in his tenure at Amtrak, Gunn did away with most of the perks of his office, selling the executive limousine and SUVs and reassigning the drivers to the Amtrak police department. He refuses to work on a computer and will not wear a cell phone. He goes to work by public transportation.
Despite an affinity for the working man and woman, Gunn can be a no-nonsense disciplinarian. He listens to subordinates, but when he reaches a decision, there is only one way: his. Last year, Executive Vice President Stan Bagley resigned over disagreements on cost cutting, a blow Gunn took personally because the two had initially hit it off well. Gunn later said he did not sleep the night after Bagley left.
In mid-March, he caught a conductor smoking on board a train, a clear violation of the rules. After thinking about it overnight, he sent a letter to all employees reminding them of the policy and giving them an unmistakable warning: “In retrospect, I should have acted more forcefully and I will in the future.”
A Life in Transit
A lifelong bachelor, Gunn has, figuratively at least, been married to railroading and transit. Early in his career, he was effectively fired from the Santa Fe freight railroad after arguing with superiors over the pricing strategy for a Chicago-California train, the Super C, that was his creation. “They told me, you either shut up or go away,” he said.
His first transit job was operations director of commuter rail for the Massachusetts Bay Transportation Authority, which he chose to leave after a new governor took office and he felt political pressure to depart. He went on to manage commuter systems in Philadelphia, New York and Washington before “retiring” in 1999 as general manager of the Toronto Transit Commission. He was at home in Nova Scotia when a headhunter called about the Amtrak job.
Gunn had once turned down the Amtrak presidency. But with a full career behind him, and after two years sitting at home, he had little to risk and could not resist one more challenge.
“I miss work,” he said. Gunn’s method of operation is always the same: Quickly determine how many people it takes to efficiently operate whatever he has just taken over, then get rid of the rest. Get a handle on the finances and then start cutting costs. Look for rule breakers and crooks, and make examples of them. Take symbolic steps such as getting rid of limousines. Talk straight and be open, even when it hurts.
A comparison of his first years at Washington Metro and Amtrak is striking.
Four days after taking over at Metro in March 1991, Gunn announced plans to cut 320 employees, 29 of them immediately. Three weeks after he took over at Amtrak last May 15, he announced a reorganization that would cut 300 management positions and reduce the number of vice presidents to 20 from 86. At last count, he had eliminated 988 employee positions, about 4.5 percent of the workforce.
Four months after taking over at Metro, he announced that an investigation had uncovered mismanagement, impropriety, drug abuse, favoritism and waste among maintenance employees. At Amtrak, Gunn’s lieutenants paid a surprise visit one night to a repair shop in Indiana and found some employees sleeping, goofing off and otherwise not doing their jobs.
His passion for cleanliness won him national attention in the 1980s when he was president of the New York Transit Authority, where he largely succeeded in an initially ridiculed campaign to wipe graffiti off the subways. At Metro, he became popular with passengers partly by cleaning up buses and trains, and repairing and replacing aging rail cars. At Amtrak, he ordered a general cleanup that included selling or scrapping derelict locomotives and passenger cars.
But at Metro, Gunn was considered a loose cannon. He revealed unpleasantries such as the maintenance investigation and insisted on complete management independence. Within weeks of taking over, he announced a reorganization of the staff without telling the board in advance. Worse, he followed the popular Carmen E. Turner, who knew how to work within the system. Gunn submitted his resignation in 1993 amid increasingly public criticism from board members.
Still, even those at Metro who disagreed with his style leave little doubt that they respect him.
“If Amtrak can be saved, I think David Gunn has the skills to do it,” said Washington consultant Beverly R. Silverberg, who resigned as Metro’s chief spokeswoman in 1992 because she thought Gunn was too negative about Metro’s problems.
‘This Isn’t Rocket Science’
At Amtrak, Gunn enjoyed the advantage of having no positive image to defend. Despite insisting for years that Amtrak was on the “glide path” to self-sufficiency, Warrington had been forced to mortgage New York’s Penn Station just to keep trains running.
Auditors for the General Accounting Office and the Transportation Department’s inspector general often shook their heads trying to make sense of Amtrak’s books. In the last year before Gunn arrived, Amtrak’s auditors refused to certify the financial results.
Gunn spent months pushing his financial managers to produce meaningful, understandable numbers. He now releases a monthly financial report as voluminous as the Montgomery County phone book.
Those books show that Amtrak, under Gunn, has weathered relatively well a general downturn in travel that cut deeply into revenue. For the fiscal year through the end of February, revenue was $62.9 million below budget. But operating expenses were $58.8 million below budget. For the first quarter, the figures had been even more dramatic — revenue $29.4 million below budget but expenses $40.8 million below budget.
Some of the savings can be attributed to job cuts, but much came one increment at a time. Many of those increments came straight from Gunn’s observations and his tendency to act immediately when he sees something he does not like.
On one short trip to Florida, for example, Gunn discovered that in Miami — the terminating point for three Amtrak trains — the railroad was paying hundreds of thousands of dollars a year to have a switch engine and crews from CSX Transportation available 24 hours a day. The engine’s main duty was to deliver those trains to a servicing facility and turn the southbound trains around for the trip back north.
“Why don’t we just use the road locomotives to do that?” Gunn snapped, referring to the engines that pulled the train down. “This isn’t rocket science.”
But he has not cut blindly. In fact, Gunn has even rescinded some cuts.
During a 10-day cross-country train trip, Gunn was bored seeing the same food every day and ordered that different menus be introduced each day in a repeating cycle. On another trip, a chef told him that spices had been axed from the supply lists in Amtrak’s dining car kitchens as a cost-cutting measure. Chefs were generally buying their own spices. They do not have to anymore.
“It was stupid,” Gunn said. “You can’t let service collapse. A dining car obviously spends a lot of money, but you’ve got to have it.”
It is a “myth,” he said, that sweeping programs make an organization successful.
“Life is not like that,” he said. “You take a lot of little actions.”
Playing Tough
Gunn has long claimed that he does not “do politics,” and his job history seems to bear that out. But that does not mean he cannot be political when he wants to be.
On June 5, just three weeks after taking his job, Gunn announced that Amtrak’s financial condition was so bad that the system would have to shut down in July unless it received a $200 million loan within three weeks.
The Senate Committee on Commerce, Science & Transportation, headed by longtime Amtrak critic John McCain (R-Ariz.), sent along a series of questions.
The next morning, Gunn handed Joe McHugh, his governmental affairs vice president, a yellow legal pad with a handwritten letter to include with the answers to McCain. The letter said that just about every McCain criticism of Amtrak over the years was true.
After outlining a laundry list of problems he found, he wrote: “This is not a way to run a railroad and not the way I will run the railroad. Too many happy words have hidden some very dismal financial results.”
McCain called Gunn’s letter “surprisingly refreshing.” With McCain’s support, Congress quickly appropriated $200 million to keep the wheels turning.
During that same period, Amtrak was negotiating with the Bush administration for a temporary loan. Deputy Transportation Secretary Michael P. Jackson demanded that Amtrak adopt a list of “reforms” as a condition of getting the loan. Gunn found some of the conditions unacceptable.
On June 21, as the decision on a shutdown loomed, Gunn let drop almost matter-of-factly that any commuter trains run by Amtrak or that use Amtrak tracks or facilities would also have to shut down because there would be no dispatchers, train crews, maintenance crews or even liability insurance to keep them running. Suddenly the whole political climate changed. It was not just an Amtrak story anymore.
Cities and states demanded action.
Caught off guard, the administration granted the loan and dropped the conditions that Gunn did not like.
Jackson calls Gunn’s tactic “a source of friction” that “frankly, has rebounded against him and has not been a positive thing for Amtrak.” He said he had told Gunn that the administration would find a way to keep Amtrak running, and “no way was it fair to threaten a shutdown.”
Nonetheless, Jackson has praised Gunn more in public forums such as congressional hearings. “He’s tough and stubborn,” Jackson says, “but then so am I.”
The shutdown crisis made many in Congress more aware that some politically popular but money-losing routes were in danger of being discontinued, prompting it to pass a fiscal 2003 Amtrak budget with subsidies of a little more than $1 billion, virtually everything Gunn said it needed. Administration rhetoric has toned down, and President Bush has proposed $900 million for Amtrak in fiscal 2004. That is much less than the $1.8 billion Gunn says it needs but far more than any administration has ever proposed.
On the other hand, Gunn’s tactics at least temporarily poisoned Amtrak’s relationships with commuter agencies, some of whom have threatened to look for a company other than Amtrak to run their trains. Among those agencies was Virginia Railway Express.
However, Pete Sklannik Jr., VRE’s operations manager, said that Gunn has made up a lot of lost ground since then, and that VRE is now negotiating with Amtrak alone on a new contract.
“The [shutdown] tactic, in a strange way, brought us together,” Sklannik said. Even as he has been so outspoken on other issues, Gunn has avoided being dragged into the perennial debate over what to do about long-distance trains, by simply refusing to say whether he thinks any of them are needed.
He says it was a “political decision” to run them, and only Congress, through a political process, can decide whether to eliminate them. He will only say that they account for only a small part of Amtrak’s financial problem, using only $300 million in yearly subsidies while the Northeast Corridor requires far more money.
The administration sharply criticized continued operation of long-distance trains in its fiscal 2004 budget proposal, but that attitude seems to have been modified somewhat. In a House hearing in early April, where Gunn and Jackson sat together, Jackson adopted Gunn’s approach, saying he believes the future of long-distance trains is a political decision.
‘Cleaning Up a Big Mess’
The administration has said it wants to place the Amtrak-owned Northeast Corridor under a “public partnership” and turn Amtrak into a pure railroad operator that would be subject to competition. States would be expected to pay an increasing share of passenger-train costs. The administration principles are generally in line with recommendations made last year by the Amtrak Reform Council.
Gunn scoffs at the ideas other than greater participation by the states, which lays the groundwork for another battle with the administration.
“He has a vision of the railroad that is not the vision of the Bush administration,” Jackson said.
Jackson said that no matter how well Gunn runs Amtrak, “I think Amtrak is still in a crisis,” and something must be done.
Thomas A. Till, former staff director of the reform council, said he thinks Gunn has “done a very good job of cleaning up a big mess.” But Till said Gunn’s skills will not be enough to save the passenger train, and he is afraid Gunn’s actions may persuade Congress to simply keep the status quo for a while.
“It would be unfortunate, but it’s conceivable, given other priorities, that we could limp along with a patched-up Amtrak — what some people call kicking the can” down the road.
Gunn now talks less of going home to Nova Scotia. At a 60th birthday party last year for Amtrak’s media relations director, Cliff Black, Gunn told Black he could not retire for another five years because “I’ll be here five years.”
“God willing and the creeks don’t rise,” he says, “I’m not doing this to be a short-timer.”