Wish he would have bought Amtrak. THEN you would really see a reduction in the need of government subsidies and a much higher ROI. Get rid of the bureaucracy and a LOT of the waste will go away.
Yes and no. Now that I've worked a bit in both private (airline) and public (transit) transportation systems, I've really come to realize that public organizations are not the inherently inefficient bureaucracies they are made out to be. Left on their own, with complete freedom, I think a public organization is similarly efficient to a private one (private orgs are probably a bit more efficient overall, but they're also taking a profit). The problem is that they're not left on their own. Any public agency is subject to an incredible array of rules, restrictions, reporting mandates and other such things that are a result of the meddling of politicians. They are also subject to their own existing inertia - things like an internal culture that resists change - but these are things that can also weigh down private companies.
Honestly, if Buffett was running Amtrak, I don't think you'd see one bit of change, unless: 1) You gave him tremendous latitude to fire/hire/restructure however we wants without any oversight or approval, 2) That all Congressionally mandated rules and restrictions that Amtrak is subject to are wiped off the books, 3) The all the existing labor agreements that Amtrak has are wiped away and subject to renegotiation.
And realistically, that will never happen. Passenger rail is always going to require capital investment from the government, and lacking sufficient capital investment, it will require operating subsidies. Those subsidies come with strings attached - once you start taking money from the government, immense amounts of bureaucracy come with it. The only practical way to get around this problem is to separate capital investment from the operating arm of the company and allow the operating arm of the company to run like a private enterprise. Except, you can't do that with Amtrak because there hasn't been a sufficient amount of investment in rail infrastructure.
Look at it this way: do you think Greyhound would make money if all they had to drive on was rutted, dirt roads? No way. No one would ride them and if we wanted intercity bus service, the government would have to subsidize it to a price that people would actually ride. Do you think trucking companies would be profitable? Not in long haul - all that would go to the railroads.
And it's the same thing with Amtrak - if the government builds and maintains dedicate high speed passenger rail infrastructure in this country, Amtrak will be able to run over those lines self-sufficiently. The reason Amtrak requires such a subsidy is that we haven't invested in the necessary infrastructure in this country to make passenger rail a success. Why do European systems run with sustainable operating margins "above the rails?" It's because the governments have built and maintained adequate infrastructure for them.
Basically, Buffett couldn't do much with Amtrak as it exists currently. No matter how good a manager he is, one man can't cut through all the things that constrain Amtrak as we know it.
He's got the money!
