By M.E. Singer
Who can forget how ecstatic the rail advocacy community was with this announcement by Amtrak’s Chairman of the Board of Directors, Anthony Coscia, on 19 August 2016: “We are very pleased that someone with Wick’s experience and vision will lead Amtrak during this critical period as the company charts a course for future growth and improvement. Under CEO Joe Boardman, and with the support of the Administration and Congress, Amtrak has achieved record levels of performance and investment. The Board believes Wick can build upon this success in the coming year by launching initiatives to further enhance safety and customer service, modernize our operations, and guide our implementation of the “FAST Act.” Rail advocates who knew better were even willing to overlook the overt Pravda-esque puff piece inserted in this press release on the soon to be departed CEO, Joe Boardman. Nothing could dampen our enthusiasm for a “real railroader” coming to Washington to meet our fullest expectations of dis-assembling the Praetorian Guard Boardman had created during his eight year regime, at the expense of good, competent managers. Indeed, Wick Moorman was to be for Amtrak as Patton was when taking command of the defeated American Army after its rout at Kasserine Pass, 1943.
Although not really taking over until 1 October 2016, we were simply dumbfounded to learn that by November, 2016, Wick had already announced his intention of being just a “short-timer” before returning to Charlottesville to enjoy his retirement from the Norfolk Southern. How could we not be justified in feeling we had merely stepped in front of those mirrors at the old amusement park that made everything look so much bigger in life–on a temporal basis, until we stepped back? By June, 2017, Amtrak had already announced its next CEO, Richard Anderson, newly retired as CEO from Delta Airlines, who would share the CEO title with Wick from 12 July-31 December 2017. From my experience in turnaround operations management at the corporate level, there is always a cadre of politically connected “lifers” who persist in continuing their destructive mannerisms for their own self-interest; they do not slink away until they are directly challenged by those now in an observable and sustainable power of command position. As the power of these negative disruptors permeates the organization, everybody at all levels observes to see if change is to really happen, or, is it just more talking point; enabling all to hold on and wait out the successive new leadership until it too evaporates, as predicted.
Juxtaposition this known point of management to appreciate its validity with the military and how poorly the Federal Army of the Potomac performed with repeated, short-term changes in command leadership. After McClellan failed to follow-up his success at Antietam in 1862, Burnside commanded just between November, 1862-January, 1863, but long enough to lose the Battle of Fredericksburg. Hooker was than in command between January, 1863-June, 1863, only to disastrously lose the Battle of Chancellorsville. In reality, the repetition in command failure of the Federals laid the groundwork for Gettysburg, over a watchful eye of England and France to determine if they would support the Confederacy. But for the steady hand of long term command by Meade and Grant, later joined by Sherman and Sheridan, the Confederacy would have achieved its goals.
Given the extensive, grandiose objectives established in the initial press release by Amtrak Chairman Coscia, I am quite curious what was the actual intent of where Wick would focus his extremely limited time to achieve the careful paring of the many hot issues demanding more than a desultory approach? A compendium of such known issues included:
From my perspective, I do not believe Moorman went far enough to in-depth reorganize Amtrak beyond the executive level, where their was still some initial setback with appointments in IT and Marketing. What Amtrak continues to beg for is a thorough revamping at the senior and middle management layers, which can only be resolved by bringing in experienced outside blood with open, unbiased eyes and a willingness to question; and not simply accept the status quo. “Disruptors” are necessary to challenge the complacent environment of a “friends and family” atmosphere, subservient to the sycophant management “lifers” still in place from protecting former CEO Boardman; as well as those genuflecting to the Board and at its behest exclusively focusing on their NEC. Amtrak’s levels of management must be inculcated with the salient observation of Harry S. Truman, that “some people are so afraid of rocking the boat they forget how to row!”
Moorman inherited a long-term failed safety culture that permeated the workplace, with the inevitable end result creating Frankfort Jct. and Chester (Pennsylvania). Prior to Wick’s arrival, safety culture was a non-sequitor; any reference by Boardman to safety was reminiscent of 1945 with orders from the bunker in Berlin for General von Paulus to maneuver the German Sixth Army (which had been destroyed at Stalingrad,1943. ) Important to identify, to what extent were the desperately requisite changes actually made by Wick to introduce credible management and collegial union supervisors with the mutual goal of absolutely no toleration for drug and alcohol abuse; a mutual respect for continuous improvement in safety for the benefit of customers, employees, property, and public relations?
Certainly, without Moorman, Penn Station would not have achieved the desired results as expediently and efficiently, as under his direction. However, as the fiasco of Penn Station so quickly unfolded, how astute was Wick not to roll on the management level of the station, but rather, to focus on the politicized senior and executive levels of management making decisions in deference to Amtrak’s Board and their political patrons of New York and New Jersey, at the risk of safety and operations? To what extent was the fate of those in leadership positions who so obsequiously served Amtrak’s Board and the politicians responsible for Penn Station, persistently ignoring the warnings from those employees actually on site at Penn Station?
Amtrak has persistently evidenced an inherent incapacity to plan and manage its capital projects to budget and on a timely basis (e.g., the latest being Connecticut’s CTrail New Haven-Hartford-Springfield line). Given this issue was perpetuated by the same Board and executive/senior management currently in place, beyond Penn Station, what did Wick accomplish to introduce a sense of accountability and discipline to get the job done? It was this similar mañana, slow go, over-priced mentality that cost Amtrak numerous revenue-producing contracts for commuter rail operations and maintenance.
Coming from a public company (Norfolk Southern), I was surprised Moorman did not challenge and correct the willful manipulation of financial data in defiance of GAAP (Generally Acceptable Accounting Principles) that tilts this data in favor of the NEC; at the expense of the long distance national system and state-supported corridors. Indeed, I believe Wick even validated the current cost methodology, despite how corporate and NEC overhead, and especially NEC infrastructure costs, are co-mingled (i.e., “dumped”) against the cost accounting of the other sectors. Of course, declaring “the emperor has no clothes” and objecting to the distortion of finances would have required Wick to directly confront the motives of Amtrak’s Board of Directors, who have consistently blessed the skewering of such data to support their NEC at the expense of the national system. Perhaps that reality check will default to Richard Anderson who fully comprehends from Northwest and Delta Airlines how traffic is measured by revenue per passenger mile (which obviously favors the long distance routes).
As this persistent issue over GAAP also cascaded into the cost methodology to impact the state-supported services, what, if anything, did Wick do to follow-up on his declaration to create a more straight forward cost basis charge for states to encourage increased frequencies and expanded routes; a recognized key towards increasing revenues? On that note, as the state-supported services are costed out by Amtrak not to operate as a deficit, did Wick intervene to prevent these state-supported service payments from being co-mingled and directed towards supporting the NEC?
Did Wick also examine lost opportunities to increase revenues, e.g., to bring commissary functions in-house to cut costs; to charge sleeper class for meals in order to offer a more diversified, higher quality menu; to train LSAs in diners and cafes in mixology to perform as bartenders crafting cocktails?
Class 1 Relationships
In respect to the direct correlation of increased costs and decreased revenues due to failed OTP (On-Time Performance), how did Wick utilize his cordial relationships with the Class 1s to work through this economic issue that also inhibits states from increasing frequencies and expanded routes? How did Wick mix together: the clear intent of the 1970 Railpax legislation offloading passenger services was commensurate with the understanding of prioritizing the dispatching of passenger schedules; the concept of P3 (Public Private Partnerships) to fund the necessary infrastructure improvements to operate more passenger services at higher speeds without interfering with the freight operations; the return to federal court by the FRA over the OTP issues that cause excruciatingly needless revenue loss and PR issues to Amtrak by all the costs and delays associated with mis-connects?
Despite initialing failing during re-organization to inject a seasoned, hands-on marketing leader, what did Wick accomplish to ensure a focused marketing organization to position a brand that differentiates in the marketplace? The NEC-focused ad campaign introduced late summer 2017 appears to serve the business traveler market; yet, recent media announcements of Amtrak eliminating student and reducing elderly discounts is injurious to major travel segments of Amtrak. Such bifurcation of that market, without any meaningful approach to the growing inroads by curbside bus traffic, only serves to push this traffic off the train and onto the bus. Indeed, how does Amtrak even rationalize increasing costs without concomitant benefit of any increase in service, schedule, or amenities?
What review, if any, did Wick request to identify the future of First Class on the long distance routes; a Business Class beyond the Acela more than just another coach; if sleeping cars are to continue, how to address the obvious missed market needed for Slumbercoach-type accommodations, as well as more deluxe accommodations, food and beverage services?
As American Airlines and Coca-Cola enjoy the benefits of joint venture marketing just in cocktail napkins aboard flights, when will Marketing discover this revenue-producing opportunity?
Although Moorman allegedly put his foot into the backside of CAF to complete their much delayed order, I am surprised he did not question why no coaches or lounges were included in the order. (Ironically, I had learned that when the order was placed, and somebody questioned the lack of lounge cars, Boardman inquired what they were and why they were needed). Even more concerning was Moorman’s silence over the fiasco of Nippon Sharyo’s failure to meet its contract to build intercity corridor bi-level cars. Precious time was lost; the acquiescence of Amtrak’s management and Board now leaves us with single level cars for the same cost. As we now witness the refurbishment of Amfleet on the NEC, were plans finalized for the rehabilitation of the P42 motive power; what about the disposition of the original Acela consists? Did Wick appreciate the viability of the long distance routes enough to turn Marketing towards supporting the national system to promote and build demand, which would translate into viable proformas to Congress to fund new Superliner equipment acquisition and refurbishment?
How soon did it take for Wick to realize his issue with what was before Human Capital (HC), and thanks to him now again, Human Resources (HR), was best explained by Woody Allen, who said, “Those who can’t do, teach. And those who can’t teach, teach gym;” by extension from gym, Amtrak HR? From HR should have emanated industry proven criteria for recruitment, judging skills and knowledge for hiring, training, and performance. However, HR’s castle with the surrounding moat mentality explains the perpetuation of the friends and family hiring priorities, the incredible resistance to recrutiing outside blood; the inexcusable foibles of ineffective training programs, particularly OBS (On-Board Services). Did Wick evaluate these problems emanating from HR; how did he correct them?
To what extent did Wick investigate and stop how the beginning of the annual budget year was historically used by executive management to park their intended bonus for year-end, (i.e., “putting a plug in the budget”)? How did Wick stop the connivance of Finance and HR, even the Board, to the fraudulent ascertaining of meeting budgetary and operational goals of bonus levels? Did Wick require any clawback of those funds? How will we be assured that gaming the bonus structure is to be no more? Also of concern in this area has been the on-going acts of timecard and overtime fraud. What was Wick’s role to control this situation going forward?
What did Wick identify as the cause and explanation for the serious inconsistencies identified in OBS? As all cruise ships depend upon a Director of Hotel Services, all international flights rely on a Purser, and even VIA Rail Canada staffs “The Canadian” with a Director of Passenger Services, did Wick conclude it is time to re-introduce the position of Chief of Train Services so their is a central command and control position en route throughout the entire trip? If not, given the issue cannot continue to be ignored, was their a decision made at all?
Amtrak’s management leadership and Board seemed to be historically nonplussed by the annual reports issued by the Office of the Inspector General (OIG) that persistently identifies the same financial, operational, HR, and other problems perpetually repeating each year. Given this scenario, how did Wick digest these facts; what changes, if any, did Wick implement to control costs, waste, and fraud?
Board of Directors
We are already so much aware of the intentional opaque nature of this Board; its deliberate, willful slant to serve its native/power bloc NEC while ignoring the national system; relying upon its pet members of executive management with the promise of being rising stars by doing the Board’s bidding favoring the NEC; the lack of any Board stewardship to resist Congressional or Administration budget cuts; lack of action by the Board to embrace an effective GR (Government Relations) campaign to secure from Congress a dedicated ticket tax, participation in dedicated trust funds, as well as to bring to light the unfairness of airport facility fees used to market airlines.
With these issues and many more that hinder Amtrak’s political position, exactly what was the agenda this board provided Wick Moorman when he was retained as its CEO? Was Wick involved, or even his opinion solicited, by the Board, USDOT, or the Administration before Leon Westmoreland was nominated to recently become a member of this Board of Directors? So, now as they say, we have put the fox in with the hens, giving Amtrak’s Board a clearer definition of what its purpose is to be. Indeed, the meaning of Westmoreland’s appointment perhaps could be best understood by the incoming Amtrak CEO, Anderson, if Qatar Airlines secured a position on Delta’s Board.
Transparency of Leadership
Going forward, Amtrak must have the benefit of consistent experienced leadership on a sustainable, long-term basis evidencing the correct vision for making Amtrak competitive in order to achieve increased revenues, as well as controlling costs. Concomitantly, it would also highly benefit Amtrak to have a Board of Directors whose stewardship actually serves the needs of Amtrak, rather than stacking it with merely real estate developers and financiers serving their Northeast political patrons.