Turnover at the top hits Amtrak at a critical time

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Amtrak President and CEO Joseph Boardman defends Amtrak's management reshuffle, saying that many of the railroad's management changes are significant improvements, the result of the strategic plan he created in 2011 to reorganize Amtrak into four "business lines."

As it recovers from one of its worst accidents on the Northeast Corridor, Amtrak faces frequent management turnover and structural change,in addition tochronic financial and political challenges.

Former Amtrak executives say the turmoil at the top in recent years has disrupted railroad management and distracted employees from their daily duties.

Steven Ditmeyer, a former Federal Railroad Administration (FRA) executive and now an adjunct professor in railway management at Michigan State University, said: "Rapid changes in management are never good, unless they're aimed at getting rid of nonfunctioning people. Management turmoil is of concern."

With upper management in flux, former Amtrak executives say, Amtrak may not have worked aggressively enough after deadly train wrecks on other passenger railroads - on Dec. 1, 2013, in New York and on July 24, 2013, in Spain - to identify fixes on its rail network that could have prevented the May 12 derailment in Philadelphia that killed eight passengers and injured 200.

Both 2013 accidents involved speeding trains that derailed going too fast into a curve. That's also what happened in the Philadelphia crash, at the sharpest curve between Washington and New York.

"After that kind of accident, everybody is put on notice," said a former Amtrak executive, who requested anonymity, of the wrecks in New York and Spain. "You would think you would take a look at your sensitive points and say, 'We don't want that to happen here.'

"But people are more concerned with keeping their jobs than doing their jobs."

Only after the Philadelphia derailment - at the order of the Federal Railroad Administration - did Amtrak quickly install automatic-braking circuitry on the northbound side of the Frankford Junction curve, which would have prevented the fatal derailment.

Amtrak had installed that braking system 24 years earlier on the southbound side of the curve and at several other tight curves on the Northeast Corridor, to automatically slow speeding trains if the engineer doesn't.

"Certainly one of the reactions to the Metro-North derailment [in 2013] could have been, 'Let me take a look at all my sharp curves and make sure I have protection for all my sharp curves,' " said rail expert Allan Zarembski of the University of Delaware. "With the benefit of 20/20 hindsight, it would have been a good idea."

Amtrak president and CEO Joseph Boardman rejected the argument that Amtrak missed a chance to prevent the deadly Philadelphia derailment.

He said the lack of automatic-braking circuitry on the northbound side of the Frankford curve was based on Amtrak's assumption that trains wouldn't enter the curve at more than the 80 m.p.h. maximum speed allowed on the preceding straightaway.

"The notion that an engineer might actually accelerate into the northbound curve was not a circumstance we anticipated, and thus we didn't mitigate for it," Boardman told a congressional hearing last month. "It was a reasonable decision reached by reasonable experts under reasonable circumstances."

An Amtrak spokeswoman said that after the deadly Metro-North derailmenton Dec. 1, 2013, in the Bronx, N.Y., Amtrak followed safety recommendations from the FRA: reminding employees of rules against speeding; producing a video focused on safety and teamwork; and having supervisors hold face-to-face meetings with employees to discuss the rules reminder and share the video.

Amtrak also increased operational tests to verify that its trains were following the speed rules, said the spokeswoman, Christina Leeds.

Boardman, meanwhile, defended Amtrak's management reshuffle, the latest in a series of reorganizations in the railroad's 45-year history to try to improve finances and operations and placate Congress.

The recent turnover has affected senior executives and key operational positions.

For example, Amtrak's chief engineer, Rodrigo Bitar, started his job on May 11, one day before the deadly derailment of Train 188 in Philadelphia's Port Richmond neighborhood.

He is based in Philadelphia to manage 4,000 people who maintain Amtrak's tracks, communications, signals, stations, and bridges, and he is the third person in the critical post in two years.

Amtrak also has had three deputy chief engineers of maintenance in two years, in charge of maintaining track, signals, and traction power.

In addition, in the last 21/2 years, Amtrak has installed a new chief financial officer, chief transportation officer, controller, treasurer, chief of research and strategy, general manager for long-distance services, chief of customer services, general manager of state-supported services, and police chief.

"Knowledgeable people are leaving, and no one really wants to work there, just at a time when great things are needed to expand the infrastructure," another former Amtrak executive, who also requested anonymity,said.

Boardman disagreed, saying that many of the railroad's management changes are significant improvements, the result of the strategic plan he created in 2011 to reorganize Amtrak into four "business lines."

"Change is constant," the Amtrak CEO said. "But these aren't turnovers, these are additions to try to continue to try to move forward in improving on our strategic plan . . . to improve safety, customer service, and financial excellence.

"And we're making progress in all of those areas."

Boardman cited ridership and revenue growth, new train orders, and declining debt the last four years as evidence of that progress.

Amtrak carried 31 million passengers last year, its 11th increase in 12 years, while it collected revenue of $3.2 billion, also a record.

The railroad's operating subsidy from the federal government declined from $565 million in fiscal 2010 to $250 million this year.

Amtrak has never been able to meet its congressional mandate to turn a profit. It received $1.4 billion from Congress this year to cover the operating deficit, as well as capital costs for construction, new vehicles, and debt payments.

Federal aid may be less next year: On June 9, the U.S. House approved a proposed budget that would cut Amtrak's funding by about 17 percent, or $242 million.

U.S. Sen. Tom Carper (D., Del.), a former Amtrak board member, said: "There are some people where I work who would just as soon kill Amtrak."

"Amtrak needs investment. It needs certainty. It needs dedicated funding," said Carper, a frequent passenger. He was on Train 188 on May 12, but got off in Wilmington shortly before thewreck in Philadelphia.

Because Amtrak relies on unpredictable annual federal appropriations, the railroad lurches from year to year in a constant state of near-crisis.

"It looks like a company, but it is really a government agency," said Jim Mathews, president of the National Association of Railroad Passengers. "People complain that a 'real' company could be more responsive to markets and its customers.

"That's like getting angry when frogs can't fly."

Amtrak inherited decrepit bridges, tunnels, and equipment when it took over passenger service from the private freight railroads in 1971. Since then, its backlog of worn-out infrastructure has been growing.

Now it would require an estimated $21 billion to restore just the457-mile Northeast Corridor to a state of good repair.Amtrak and eight regional commuter railroads carry 750,000 passengers a day on 2,000 trains on the corridor.

Boardman, Amtrak's chief executive since 2008, has repeatedly pleaded with Congressfor more money to prevent what he warned last year could be "a bigger, costlier, and far more damaging failure than anything we have seen."

Boardman, 66, a former New York state transportation commissioner with a master's degree in management science, has responded to Amtrak's financial straits and congressional demands by redrawing Amtrak's organizational charts and shifting managers' responsibilities.

Amtrak board Chairman Anthony Coscia, a New Jersey lawyer who formerly chaired the Port Authority of New York and New Jersey and the New Jersey Economic Development Authority, said the changes have made Amtrak more efficient, though "it's a work in progress."

"I think we can run the company better than we do," Coscia said. "I think we run it better now than we did last year, and we ran it better last year than the year before. But we're definitely not out of the woods yet."

Others, including the union that represents 2,000 Amtrak workers who maintain the tracks, electric lines, and other equipment, are much more critical.

"Our senior managers have little or no experience in operating or building a railroad," said officials of the Brotherhood of Maintenance of Way Employees, which is in negotiations for a new labor contract.

"The union's struggle to maintain safe working conditions is hampered by Amtrak senior management's lust for complete control and railroad inexperience," they said in a recent union newsletter.

The union also cited the problems with Amtrak's "Safe-2-Safer" program identified in a report this year by Amtrak inspector general Tom Howard.

Howard found that reported employee injuries at Amtrak increased from 695 in 2009, when the program began, to 1,301 in 2013, while employee injury claims increased by about 80 percent from 2009 through 2013, with a cost of $80 million.

Boardman dismissed the union leadership's complaints as self-serving.

He said the union's "concern has to do with negotiating the next contract and finding an enemy ... and there's no enemy here," he said. "... We have very excellent relations with the unions."

About 85 percent of Amtrak's 20,000 employees are represented by 14 unions.

Leeds, the Amtrak spokeswoman, said the employees' reportable injury rate has dropped by 7 percent since October 2014, and the injury severity rate of employee injuries is down by 26 percent since then.

A Republican appointee who headed the FRA before being named Amtrak president, Boardman reduced management in late 2011 with 150 buyouts. That was the year he drafted the five-year strategic plan with a stronger focus on the bottom line and customer services.

Those moves prompted his major overhaul of the management ranks at Amtrak, which through the decades has seen many such restructurings.

Boardman's supporters say he is under constant pressure from Congress and the Amtrak board to cut costs and increase revenue.

"He's got a board of directors of 535 people," said Mathews, the passenger advocate, referring to Congress. "When you have a congressman deciding the price of a hamburger in a dining car, how can you possibly make the best decisions for the customer?

"When you're in a reactive mode, you've lost control of your destiny. I think that's where they are."

Boardman, the second-longest-serving president in Amtrak's history, said he waited longer than his predecessors to reorganize the railroad "because I wanted to understand the problems."

He acknowledged that he has encountered resistance from certain managers and employees, but said most have embraced his changes.

Howard, the Amtrak inspector general, reported last year that Amtrak had made "significant progress implementing its 2011 strategic plan and accomplishing positive results," while noting that "a number of challenges remain to be addressed."

Those challenges include attracting and keeping key employees, "and this challenge will intensify as experienced employees in key positions retire or migrate to other business opportunities," according to the inspector general's report.

In another report, Louis Thompson, a former Federal Railroad Administration official and a railways adviser to the World Bank, said last year:

"Over its lifetime, Amtrak has had just enough political support to survive but never enough to invest properly or to prosper in any single market, and there is no convincing reason to think this will change significantly with the existing organizational structure."

Correction: An earlier version of this article incorrectly characterized the May 12 accident as Amtrak's worst on the Northeast Corridor.


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