Tom Downs: did he jump, or was he pushed - Amtrak's options after the resignment of CEO Thomas Downs - Brief Article - Column

Railway Age, Jan, 1998 by Gus Welty

The Honorable Rodney Slater is an optimist. As the ink was still drying on President Clinton's signature on the Amtrak Reform and Accountability Act of 1997, the U.S. Secretary of Transportation was proclaiming the legislation as the salvation of the National Railroad Passenger Corp.

How so? There are three legs to this particular Amtrak prop:

* The freedom to operate like a business. No longer, Slater said, would Amtrak labor under outdated statutory mandates, like Congressionally-mandated routes. Now Amtrak will be able to make business decisions based on its customers' needs.

* Financial resources necessary to rebuild. Slater said that "the $2.3 billion in capital funds freed up by this legislation will allow Amtrak to replace its aging car fleet, tracks, and equipment, with real benefits for service."

* Partnerships with employees. Here, Slater's eloquence flew really high and wide: "The legislation gives Amtrak the ability, to negotiate benefits and work conditions in a way that will help the railroad and its employees to forge a partnership for shared success and reward."

Slater should have finished that sentence with " -- without Tom Downs." Never mind what the press release said. Amtrak's beleagured chief didn't leave on his own. He was most likely done in by a Washington cabal consisting of rail labor, White House forces dedicated to Al Gore 2000, and the Amtrak board, some of whose members would rather spend their political capital on maintaining favor with high level Democrats than on behalf of Amtrak. A board that plays "in your face" with Congress by dumping Downs to satisfy the BMWE and the White House.

Downs had no power base except perhaps for Amtrak's own management. And so he was ready for a fall when labor and the politicians chose to swing the BMWE's spike maul.

The question now is, mill labor -- itself weakened by loss of numbers -- try for more, i.e., try to get a new Amtrak president installed before a Republican-controlled Congress goes before the voters again? This might seem like folly (especially if labor's candidate should turn out to be somebody like New Jersey Democrat Jim Florio). On the other hand, labor and the Gore faction have spilled blood now, and there are powerful egos at work here.

Labor may think that desperate Democrats will give labor what it wants, no questions asked. But desperate Democrats can't, not as matters stand.

Amtrak now has a lame-duck board, with release of Amtrak funding -- appropriation as opposed to mere authorization -- hanging on what does or doesn't happen regarding a new Amtrak board. That creates two additional worries -- both big ones -- about labor.

First, there's the matter of perception. By agreeing to multi-year settlements without a lot of threatening gestures, the rail unions cast themselves in an unfamiliar "good guy" role. When the time came for a presidential emergency board to ring the bell for Amtrak, it was the railroad that seized the role as poor-mouth and villain.

Never mind that Amtrak was probably right in declaring that it couldn't afford to meet the payout recommended by the PEB. Doesn't matter. The BMWE and the other organizations are now the aggrieved parties. No matter how little wiggling room it had, this was a position Amtrak should never have assumed. Is it too late now to shift? Probably it is. Amtrak may have left too many bridges in flames. But the attempt may have to be made.

More serious (yes, it's possible) would be an Amtrak default, with everything this would mean to the future of the freight railroads -- not to mention the suppliers who equip Amtrak. Given government's record in the stumbling/bumbling department, there is always the fearsome chance that Amtrak will simply not wake up some morning, because a bureaucrat forgot to set the alarm clock.

And then, friends, real disaster could strike. Amtrak would be defaulting on literally billions of dollars in Railroad Retirement liabilities -- which would come crashing down on the heads of the freight railroads.

Prosperity? Kiss it goodbye.

Survival? Maybe that, too.

Losses from passenger operations pushed the industry to the brink in the late 1950s and led eventually to creation of Amtrak.

It would be the height of futility and stupidity and several other things if the efforts of 40 years were to end where they started -- with passenger service losses forcing the industry ever closer to widespread bankruptcies. And nationalization.

Now, the rail passenger system that every President has tried to kill is suddenly recognized for the contribution it can make to 21st Century mobility.

All well and good. But let us not get carried away and forget about the Railroad Retirement bomb waiting to be armed -- or defused once and for all. Learn about the situation, because this is a case where ignorance is not bliss, and what you don't know can indeed be a killer.