In a news briefing this morning, the head of AMTRAK said that he had no choice but to make major changes in the way the rail carrier operates or “lose the whole thing entirely.” Fred Sviver, director of AMTRAK for the last four years, said that due to “record losses and mountains of debt, it is no longer fair to ask tax payers to shoulder the burden.”
In 2010, the carrier lost 72 million dollars and was subsidized by the federal government to the tune of 925 million dollars.
Sviver laid out a detailed plan that cut operating costs by nearly 300 million dollars a year, stating, “After 14 months of reviewing all our options, we find that we have no choice but to make drastic changes. This is the first step in a new direction. It is my goal to make AMTRAK profitable by 2016.”
In his detailed plan, Sviver says that the rail carrier must eliminate one the biggest expenses—the trains themselves.
“When we looked at the overall costs of operating and maintaining the trains, we saw that we were hemorrhaging money. In 2009, we spent 210 million on train operations and in 2010 the costs rose 12 percent to 246 million. With the rising cost of fuel, we projected that in 2011, it would cost nearly 300 million dollars to keep the trains running.”
Only train service will be affected. All other services will still be available, including ticket offices, hard-to-navigate web pages, automated phone service and rude customer service will not be affected by the cuts.
“We will still sell tickets; there just won’t be any trains running,” said spokesperson Roberta Tashanet. “We will keep engineers, conductors, maintenance crews and operations personnel. Nobody will be laid off. In fact, we intend to hire 600 people in the Northeast Corridor alone.”
President Obama backed the plan, saying, “Svenson has shown true courage in making difficult but necessary decisions. This is an example of the “out-of-the-box” thinking that will turn this country around and accelerate the economy.”