Richard Anderson replacing Wick Moorman as Amtrak CEO

[mfastx]

I think Amtrak should be run more like an airline, so I like it. However he needs to surround himself with people that know a lot about railroads to advise him on issues.

 

[Devil's Advocate]

I find it funny how many folks on here seem to think that because someone worked for the airlines, that they would have no concept of the differences between air travel and rail travel, and therefore would try to run Amtrak the same as an airline.

A large part of the appeal of taking Amtrak is based on it being substantially different from taking an airline. Although we have no way of knowing what any given airline CEO might do it's a relevant concern in my view. This forum has a way with repeatedly attacking or dismissing anything that doesn't fit the hive mind, but that doesn't change the fundamental legitimacy of the concern.

I find it funny how many folks on here seem to believe that the CEO is personally involved in a lot of the decisions related to equipment configuration, frequent traveler program benefits, pricing and fees, etc.

The CEO doesn't generally make a lot of low level decisions but he does select the people who will oversee these projects and narrow the options down for his approval.

Social media is going nuts over this news because somehow they think because he was an airline CEO he'll do the exact same things at Amtrak, such as more seats, charging for checked luggage, etc. Or the same crazy conspiracy theories that Trump appointed him to shut it down.

Adding more seats and charging for checked luggage sound like perfectly reasonable concerns to me. This forum seems to have a bipolar relationship with Amtrak. First we rejoice over a man who will supposedly bring a focus on profitability to the organization and then in the next breath we dismiss the types of changes that someone focused on profitability might implement.

And why would you assume that someone from the airline industry would be thrilled with the way TSA operates?

The only continuing complaint I've heard from US airlines about the TSA is that they didn't want to pay for it. Put that burden on passengers and taxpayers and they seem to be perfectly fine with it. In fact the TSA helps create a situation from which US airlines indirectly benefit. For instance, passengers now have more delays and impediments to reaching the gate on time. As the delays get longer and the recovery window and penalties for missing a flight get harsher US airlines can charge more people higher fees. US airlines have also used premium security access to entice people to remain loyal or pay more for the privilege. Meanwhile non-US airlines are generally prevented from implementing similar schemes which creates an arbitrary imbalance. Over time the details and specifics have changed but US airlines are still looking for and finding ways to benefit from the ever increasing security state.

I think Anderson's experience will enhance the customer experience on Amtrak, which if we're honest, is inconsistent.

Every time I hear the call for consistency I always wonder just what sort of consistency the poster expects to receive. US airline services have become amazing consistent over the years and yet I don't hear many people singing their praises or clamoring for more.

 

[jis]

I think Amtrak should be run more like an airline, so I like it. However he needs to surround himself with people that know a lot about railroads to advise him on issues.

I would watch for the following signals:

1. Getting rid of the current VP Operations would raise a red flag for me

2. Getting rid of the current VP Finance would be a green flag for me.

3. Stadler (Administration) and Gardner (Planning, Technology and Public Affairs) are possibly OK where they are.

4. I will be looking for some significant changes on the Customer Services side of the equation, currently under Jason Molfetas. If that does not happen I will be disappointed.

As I said earlier (and was joshed about it), I view this as a definite mixed bag. This could go very pear shaped, but there is a significant possibility that it won't and something good might come out of it.

 

[A Voice]

Social media is going nuts over this news because somehow they think because he was an airline CEO he'll do the exact same things at Amtrak, such as more seats, charging for checked luggage, etc. Or the same crazy conspiracy theories that Trump appointed him to shut it down.

Adding more seats and charging for checked luggage sound like perfectly reasonable concerns to me. This forum seems to have a bipolar relationship with Amtrak. First we rejoice over a man who will bring a focus on profitability to the organization and then in the next breath we dismiss the very changes that might actually make Amtrak profitable.

Amtrak - including the Northeast Corridor - is not profitable nor is that an achievable goal* (remember the "glide path to self sufficiency"?). While we have no reason to believe this is the case (some of the rampant speculation in this thread would be amsuing, were the posters not serious...) or that Anderson has such a mistaken concept, it is possible for the senseless pursuit of profitability to do a lot of damage to Amtrak. Again, note both Warrington's "glide path" and Boardman's elimination of food service losses; Both were guilty of telling Congress what they wanted to hear, when neither objective was ever actually possible, and both needlessly damaged Amtrak train service.

*Obviously, this does not necessarily preclude individual trains or service(s) from reaching a break-even point, on a short-term avoidable cost basis, or (as demonstrated) posting an "on paper" above-the-rail "profit" (which is a 'polite fiction').

 

[Devil's Advocate]

Social media is going nuts over this news because somehow they think because he was an airline CEO he'll do the exact same things at Amtrak, such as more seats, charging for checked luggage, etc. Or the same crazy conspiracy theories that Trump appointed him to shut it down.

Adding more seats and charging for checked luggage sound like perfectly reasonable concerns to me. This forum seems to have a bipolar relationship with Amtrak. First we rejoice over a man who will bring a focus on profitability to the organization and then in the next breath we dismiss the very changes that might actually make Amtrak profitable.

Amtrak - including the Northeast Corridor - is not profitable nor is that an achievable goal* (remember the "glide path to self sufficiency"?). While we have no reason to believe this is the case (some of the rampant speculation in this thread would be amsuing, were the posters not serious...) or that Anderson has such a mistaken concept, it is possible for the senseless pursuit of profitability to do a lot of damage to Amtrak. Again, note both Warrington's "glide path" and Boardman's elimination of food service losses; Both were guilty of telling Congress what they wanted to hear, when neither objective was ever actually possible, and both needlessly damaged Amtrak train service. *Obviously, this does not necessarily preclude individual trains or service(s) from reaching a break-even point, on a short-term avoidable cost basis, or (as demonstrated) posting an "on paper" above-the-rail "profit" (which is a 'polite fiction').

I saw the poor wording and edited my post to remove the implication that conventional profitability was genuinely obtainable, at least in an objective and practical sense. Play with the numbers enough and you can probably make almost anything look profitable, including the notoriously unprofitable airline industry, but I agree that Amtrak is never going to reach such a status as currently constructed.

 

[Mystic River Dragon]

I read this in my newspaper this morning and cried.

Then I started to read between the lines and felt a bit better. The article I read (today's Newark Star Ledger, p. 2--can anyone find it and post it? I'm in the local library, which doesn't have it, and I can't find it online), if my short-term memory is not failing me, said that Anderson and Moorman would be co-CEOs til the end of the year, and Wick would stay on in an advisory capacity starting in January.

Mr. Moorman very graciously came out of retirement to help Amtrak out, then got NJ and NY commuters all riled up because he was there at the worst possible time, with the derailments, and actually dared to arrange to fix things that had been broken forever at Penn Station. In other words, "No good deed goes unpunished" and he was the one stuck with saying things were Amtrak's fault, when it had nothing to do with him personally.

I am hoping that he has simply had enough of being the fall guy and had input into who the next CEO would be, and that Anderson respects him enough to take his advice. A plus is that everyone seems to like and respect him, so the two hopefully will get on well.

Also, if Anderson has a focus on customer service, I've got a list I will send him the minute he takes over. I did not want to bother Wick with it, with everything else he was dealing with, but I don't mind sending it to the new guy. My list ranges from staffing stations again, to providing decent food in the cafe cars, to training every employee to have an attitude as good as the best ones (of which, to be fair, there are many).

And when he really completely retires, I hope Wick is planning to take his very patient wife on a round-the-world cruise . (I have a feeling she probably won't want a long trip on a train at that point .)

 

[jis]

when he took this job Moorman pretty much said that his wife had permitted him to take this on for a year. Well the year is almost up, and you know what happens when you displease your wife too much That is a much bigger potential disaster than pesky little things like Penn Station and two egocentric gasbag Governors.

 

[Devil's Advocate]

When he took this job Moorman pretty much said that his wife had permitted him to take this on for a year. Well the year is almost up, and you know what happens when you displease your wife too much. That is a much bigger potential disaster than pesky little things like Penn Station...

"To my wifes absolute disgust...I agreed to take the job," Moorman says, noting that "disgust" probably was not a strong enough word.

She sounds lovely. Perhaps like Amtrak was doing him a favor by giving him a place to go when he'd had enough of the special overbearing snowflake at home.

 

[jis]

Boy, did you fall out of the bed on the wrong side today? Or is that just your normal state?

 

[Devil's Advocate]

Boy, did you fall out of the bed on the wrong side today? Or is that just your normal state?

My normal state is to wonder how publicly humble-bragging that your spouse casually dominates your decision making became a thing.

 

[jis]

Boy, did you fall out of the bed on the wrong side today? Or is that just your normal state?

My normal state is to wonder how publicly humble-bragging that your spouse casually dominates your decision making became a thing.

I was under the impression that it is an integral part of American culture, and has been that way from even before I came to this country for a brief visit back in 1965, and has not changed since then..

 

[Green Maned Lion]

Running a business is hard work, but it is not rocket science.

Most public facing businesses are roughly the same, and air travel and railroading particularly so. It is very simple: you must maintain equipment such to transport people from A to B in such a manner that they wish to be transported by you again while doing so for the best possible fair and at the lowest possible expenses to reach the primary goal of the passenger wishing to be transported again.

What a CEO does is develop broad strategy and manage the people who implement it. A good CEO hires good people. A bad CEO keeps idiots around but fires anyone who disagrees with them. Most CEOs these days are frankly bad.

What Amtrak needs are two things: more money, and better people. If Anderson is good as a CEO he will do that- and a lot indicates he is pretty good, although anybody involved with UHC scares me.

When I first read the name I was scared though. I hope he won't Macgyver anything....

 

[Steve4031]

Boy, did you fall out of the bed on the wrong side today? Or is that just your normal state?

My normal state is to wonder how publicly humble-bragging that your spouse casually dominates your decision making became a thing.

I was under the impression that it is an integral part of American culture, and has been that way from even before I came to this country for a brief visit back in 1965, and has not changed since then..

Every male in this country is not p#%^^y whipped. Just some.

 

[Green Maned Lion]

I'm not sure why admitting that my wife has some say in decisions I make is anything wrong. Frankly if our decision making process and our goals and ideals were at such contretemps as to make the moderation of each other's decisione a burden, it's time to get divorced.

 

[Steve4031]

There's a difference between discussion and controlling. I'm all for a rational discussion where both people are treated with respect.

 

[neroden]

The key thing which I hope Anderson can get through his head is the economies of scale in railroading. Many of these are NOT present in the airline industry and it can lead to bad decisions.

(1) Longer trains. Huge economies of scale. No equivalent in airlines.

(2) More trains per day on the same route. Huge economies of scale. No equivalent in airlines.

If he doesn't understand these two points, he will completely and utterly screw it up. If Moorman manages to make these two economies of scale clear to Anderson he'll do fine.

 

[jis]

I'm not sure why admitting that my wife has some say in decisions I make is anything wrong. Frankly if our decision making process and our goals and ideals were at such contretemps as to make the moderation of each other's decisione a burden, it's time to get divorced.

That too. I agree. This holds true for married couples as well as others that are in a long term stable relationships. I will admit that I have made significant career decisions after consulting with my long term friend even though I am not married to her.

 

[A Voice]

What Amtrak needs are two things: more money, and better people. If Anderson is good as a CEO he will do that- and a lot indicates he is pretty good, although anybody involved with UHC scares me.

When I first read the name I was scared though. I hope he won't Macgyver anything....

He won't. But Colonel Carter will be consulting on development of replacement Amfleet trucks which float magnetically above the rails. Teal'c is in charge of new security procedures.

 

[neroden]

Sooooo I don't know if there's any way to formally communicate and stress the importance of those two economies of scale to Anderson. They are the things which non-railroaders most frequently screw up about railroads.

 

[A Voice]

The key thing which I hope Anderson can get through his head is the economies of scale in railroading. Many of these are NOT present in the airline industry and it can lead to bad decisions.

(1) Longer trains. Huge economies of scale. No equivalent in airlines.

(2) More trains per day on the same route. Huge economies of scale. No equivalent in airlines.

If he doesn't understand these two points, he will completely and utterly screw it up. If Moorman manages to make these two economies of scale clear to Anderson he'll do fine.

Airlines certainly have more than one flight per day along the same route (between the same destinations); That's not only common but typical. What they lack is a comparable intermediate point business.

 

[Chessie]

The key thing which I hope Anderson can get through his head is the economies of scale in railroading. Many of these are NOT present in the airline industry and it can lead to bad decisions.

(1) Longer trains. Huge economies of scale. No equivalent in airlines.

(2) More trains per day on the same route. Huge economies of scale. No equivalent in airlines.

If he doesn't understand these two points, he will completely and utterly screw it up. If Moorman manages to make these two economies of scale clear to Anderson he'll do fine.

1.) How about larger air craft? Does it have to do exponential fuel consumption which leads to less economy of scale in airline industry?

2.) I assume it means on the same tracks? Track usage vs maintenance cost?

 

[Chessie]

Airlines certainly have more than one flight per day along the same route (between the same destinations); That's not only common but typical. What they lack is a comparable intermediate point business.

I don't think it's common in US but I once took a flight in South America that made a few intermediate stops. The flight started out in Buenos Aires, made several short stops close by to pick additional passengers, and then a 3-hour flight to get down to the southern end of the country, Ushuaia.

Very interesting but I don't not think intermediate stop customers are their focus.

 

[Dakota 400]

For those who are understandably concerned about Mr. Anderson's lack of background in the railroad industry, I would like to offer this as food for thought.

Much concern among Carnival Corporation shareholders when Mr. Arnold Donald was named CEO of CCL. No cruise industry experience. Same angst was expressed when Mr. Orlando Ashford was appointed President of Holland America Line. He also had no cruise industry experience. CCL is thriving under Mr. Donald and HAL seems to be doing the same under Mr. Ashford. Have changes been made since the arrival of these gentlemen? Yes, some of which the "regulars" approve and some of which the "regulars" disapprove. It seems to be the newest idea in the selection of business leaders to choose those have been successful in other industry executive positions.

With Mr. Anderson's track record with Delta dealing its with financial and union issues, I am hopeful he will be able to improve Amtrak's services.

 

[seat38a]

The key thing which I hope Anderson can get through his head is the economies of scale in railroading. Many of these are NOT present in the airline industry and it can lead to bad decisions.

(1) Longer trains. Huge economies of scale. No equivalent in airlines.

(2) More trains per day on the same route. Huge economies of scale. No equivalent in airlines.

If he doesn't understand these two points, he will completely and utterly screw it up. If Moorman manages to make these two economies of scale clear to Anderson he'll do fine.

1.) How about larger air craft? Does it have to do exponential fuel consumption which leads to less economy of scale in airline industry?

2.) I assume it means on the same tracks? Track usage vs maintenance cost?

A stretched model has negligible increase in cost hence why the airlines are scrambling to buy the stretched model vs the base model.

737-700 not selling well 737-800 selling really well

A319 not selling well A320 selling really well

When you start getting into second and third stretch then you get into cost with extra FA etc. but a simple stretch does not cost much extra for burn too much more fuel but has lot more revenue opportunity. I can't find the Alaska Airline article from a while back that explained why they don't buy a 700 series anymore and buy the stretched versions only of the 737.

 

[neroden]

The key thing which I hope Anderson can get through his head is the economies of scale in railroading. Many of these are NOT present in the airline industry and it can lead to bad decisions.

(1) Longer trains. Huge economies of scale. No equivalent in airlines.

(2) More trains per day on the same route. Huge economies of scale. No equivalent in airlines.

If he doesn't understand these two points, he will completely and utterly screw it up. If Moorman manages to make these two economies of scale clear to Anderson he'll do fine.

Airlines certainly have more than one flight per day along the same route (between the same destinations); That's not only common but typical. What they lack is a comparable intermediate point business.

That's not my point. My point is that there are relatively few economies of scale in doing so. There is no "fixed cost of track maintenance" being defrayed as the airplanes go through the sky.
To put it another way, it's actually relatively effective to run a lot of flights in crisscrossing directions in a "network"; or in a "hub and spoke" mode; and that sort of thing doesn't work at all with trains. Ramping up the frequency of a single route doesn't work that great with airplanes, but works marvelously with trains.

And you're right that the ease of stopping at intermediate points is another difference between railroads and airplanes. It's also one which people sometimes fail to understand though less often than the other two.