Rail

Amtrak cuts management in bid to save $85 million

Posted on July 1, 2001

Amtrak will cut management positions as part of a restructuring plan to save $85 million dollars for FY 2002. According to a statement by President George Warrington, about 2,900 management employees were offered voluntary separation and early retirement plans. “We didn’t issue a percentage for the cuts. The dollar figure that we are looking to save is $85 million and we won’t know how many actual positions that is until the voluntary separation period has ended,” said Amtrak spokeswoman Karina Van Veen, responding to the 15% management total given in recent press accounts. "A lot of it depends on obviously what their salary is. If higher level people take it ... fewer people would be required to go.” Another restructuring initiative is the consolidation of the management positions of Amtrak’s four Strategic Business Units (Amtrak West, Intercity, Northeast Corridor and Mail and Express) under one newly created position of executive vice president of operations. Stan Bagely, currently serving as president of the Northeast Corridor, will be appointed to this new position on Oct. 1. Warrington’s statement explained that over the next four to six months, Amtrak will “seek to eliminate overlapping operations, tighten cost controls and improve revenue opportunities.” Ed Walker, Amtrak Intercity president, will oversee that project. “The magnitude of these changes will depend, in part, on the continuing success of current cost management and revenue generation initiatives and the impact of current economic trends,” said Warrington. Kenneth Mead, the U.S. DOT’s inspector general, has stated that large cost cuts could actually harm Amtrak by withdrawing money for improvements and maintenance. “We understand his concerns,” said Van Veen. “We’re concerned as well, but we are doing everything we possibly can to make it to the goal of self-sufficiency.” Under a 1997 congressional mandate, Amtrak must obtain self-sufficiency by December 2002.

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