S. Hrg. 103-910
NOMINATIONS OF THOMAS R. CARPER AND Ct
LESTE PINTO McLAIN TO BE MEMBERS OF
THE BOARD OF DIRECTORS OF THE NATIONAL
RAILROAD PASSENGER CORPORATION (AM-
TRAK)
Y 4. C 73/7: S. HRG. 103-910 ^^^^^^^^^^^
KoninatioRs of Thonas R. Carper and...
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED THIRD CONGRESS
SECOND SESSION
SEPTEMBER 21, 1994
Printed for the use of the Committee on Commerce, Science, and Transportation
U.S. GOVERNMENT PRINTING OFFICE
83-155 CC WASHINGTON : 1995
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-046578-8
S. Hrg. 103-910
NOMINATIONS OF THOMAS R. CARPER AND CE-
LESTE PINTO McLAIN TO BE MEMBERS OF
THE BOARD OF DIRECTORS OF THE NATIONAL
RAILROAD PASSENGER CORPORATION (AM-
TRAK)
Y 4. C 73/7: S. HRG. 103-910 ^^^^^^^^
Koninations of Thonss R. Carper and...
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED THIRD CONGRESS
SECOND SESSION
SEPTEMBER 21, 1994
Printed for the use of the Committee on Commerce, Science, and Transportation
U.S. GOVERNMENT PRINTING OFFICE
83-155 CC WASHINGTON : 1995
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-046578-8
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ERNEST F. HOLLINGS. South Carolina, Chairman
JOHN C. DANFORTH, Missouri
BOB PACKWOOD, Or^on
LARRY PRESSLER, South Dakota
TED STEVENS, Alaska
JOHN MCCAIN, Arizona
CONRAD BURNS, Montana
SLADE GORTON, Washington
TRENT LOTT, Mississippi
KAY BAILEY HUTCHISON, Texas
DANIEL K. INOUYE, Hawaii
WENDELL H. FORD, Kentucky
J. JAMES EXON, Nebraska
JOHN D. ROCKEFELLER IV, West Virginia
JOHN F. KERRY, MassachuBctts
JOHN B. BREAUX, Louisiana
RICHARD H. BRYAN, Nevada
CHARLES S. ROBB, Virginia
BYRON L. DORGAN, North Dakota
HARLAN MATHEWS, Tennessee
Kevin G. Curtin, Chief Counsel and Staff Director
Jonathan Chambers, Republican Staff Director
(II)
CONTENTS
Page
Opening statement of Senator Exon 1
Prepared statement 5
Prepared statement of Senator Bums 6
Prepared statement of Senator Hollings 6
Prepared statement of Senator Roth 7
List of Witnesses
Biden, Hon. Joseph R., Jr., U.S. Senator from the State of Delaware 1
Prepared statement 3
Carper, Thomas R., Nominee, Member, Board of Directors, Amtrak 8
Biographical data 9
Feinstein, Hon. Dianne, U.S. Senator from the State of California 4
McLain, Celeste Pinto, Nominee, Member, Board of Directors, Amtrak 10
Biographical data 10
Appendix
Posthearing questions asked by Senator Hollings and answers thereto by:
Mr. Carper 15
Ms. Pinto McLain 17
Posthearing questions asked by Senator Exon and answers thereto by:
Mr. Carper 15
Ms. Pinto McLain 18
(III)
NOMINATIONS OF THOMAS R CARPER AND
CELESTE PINTO McLAIN TO BE MEMBERS
OF THE BOARD OF DIRECTORS OF THE NA-
TIONAL RAILROAD PASSENGER CORPORA-
TION (AMTRAK)
WEDNESDAY, SEPTEMBER 21, 1994
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The committee met, pursuant to notice, at 9:45 a.m. in room SR-
253, Russell Senate Office Building, Hon. J. James Exon, presiding.
Staff members assigned to this hearing: William Clybum, Jr.,
staff counsel, Clyde J. Hart, Jr., senior counsel, and Rebecca A.
Kojm, professional staff member; and Emily J. Gallop, minority
professional staff member.
OPENING STATEMENT OF SENATOR EXON
Senator ExoN. The committee please will come to order. We are
delighted to have some guests with us this morning to introduce
the nominees to be members of the Amtrak Board of Directors.
Senator Biden, would you please come forward. Governor, we wel-
come you here this morning. Senator Feinstein, would you please
come forward.
I apologize for my tardiness this morning. A number of things oc-
curred that happen from time to time to all of us, and I apologize
for holding you up. Let us move right along. I will save my opening
statement until later and follow our usual procedure.
We are delighted to have my friend from our neighboring State,
Delaware, here. Senator Biden, we are honored in this committee
to have you here this morning. Please proceed in any fashion you
see fit, and I assume it is to make recommendations to the commit-
tee on a nominee.
STATEMENT OF HON. JOSEPH R. EffiEN, JR., U.S. SENATOR
FROM THE STATE OF DELAWARE
Senator Biden. It is. Thank you very much. Governor. I appre-
ciate it.
I have another fellow Governor — back in your old days, in your
previous incarnation as Governor — who, I am pleased to say, has
been nominated to be on the board.
Let me just say, I would like to ask unanimous consent that my
entire statement about Grovernor Carper be placed in the record.
Senator ExoN. Without objection, that is so ordered.
(1)
Senator BiDEN. But let me make just a few highlights here.
First of all, thank you for expediting this hearing. As someone
who holds a fair number of nomination hearings, another one be-
ginning at 10 o'clock — and Senator Feinstein, I am delighted, is on
the Judiciary Committee and she knows about these hearings — we
know how hard they are to get up and running. There is so much
doing. And I personally want to thank you for expediting this so
that we do not end up in a situation where time elapses and these
two people are not able to be on the board before we go out.
Amtrak, Senator, has a long, long, long history in the State of
Delaware and it is prior to it becoming Amtrak. Railroads and
Delaware have been inseparable for well over 100 years, and we
have been a major link in terms of repair, construction, mainte-
nance on the Northeast Corridor prior to it being Amtrak, when it
was Pennsylvania Railroad and the B&O Railroad. We are a rail-
road town in many ways, Mr. Chairman.
And Governor Carper has had a vast amount of experience, as
a member of Congress for over a decade, in dealing with the same
issues you and I have had to deal with. Now, we do not deal with
them as much as you do, having jurisdiction over this subject mat-
ter, but Grovernor Carper is not new to the concerns, problems, op-
portunities, and difficulties of running a passenger rail service
which is always struggling, like every passenger rail service world-
wide is, to make its operating budget and make prudent decisions
relative to its capital investments.
Governor Carper I think will bring a very important insight and
strength to the Amtrak board. As I indicated, as congress person,
he struggled firsthand with Amtrak's perennial budget problems,
and as Governor he knows how important rail transportation is to
not only our State but, much more importantly, to the regional
economy. So, Mr. Chairman, I think that this is an inspired choice
made by the administration.
Tom, like me, Governor Carper like me, also has another advan-
tage. He probably has ridden on Amtrak more often than 99 per-
cent of the American population. He knows its ups, its downs, the
practical application of what we do here in the Congress, and I
think he will give some informed insight for a system that is des-
perately needed in my neck of the woods. I think it is needed na-
tionwide, but in my neck of the woods it is critically important to
our economy. And I hope that you will be as pleased as I am with
his choice.
And one thing about Governor Carper that everyone on both
ends of the political spectrum acknowledges: this guy is a work
horse. This guy will take this job very, very, very seriously, and I
believe he will be a significant addition to the board.
And I again thank you. Governor, for — I know all you Governors
still like being called "Governor" sometimes. He is my senator, but
I always look at him and think of him as Governor, like I look at
my friend, Senator Heflin, on the Judiciary Committee and think
of him as a judge.
But I want to thank you, Mr. Chairman, for expediting this. And,
as I said, it is very important to my State, and I think that Gov-
ernor Carper will make a significant, genuine contribution to this
board.
[The prepared statement of Senator Biden follows:]
Prepared Statement of Senator Biden
Good Morning Senator Exon and members of the Committee.
It is a great pleasure for me to introduce to the Committee the Governor of the
State of Delaware and my friend, Tom Carper.
The President has done Delaware a great honor, and the country a great service,
by appointing Governor Carper to the Amtrak Board of Directors.
Delaware has played an important role iii the history of rail transportation on the
East Coast. The major heavy maintenance facilities for the entire Northeast Cor-
ridor are located in Wilmington and Bear, Delaware.
The Wilmington Yards have been keeping the trains running there for virtually
all of this century.
And Amtrak has been important to Delaware, providing jobs for thousands of
Delawareans over many generations. Today, Amtrak employs more than one thou-
sand Delaware residents.
Governor Carper will bring important insights and strengths to the Amtrak
Board. As Delaware's Congressman he struggled first hand with Amtrak's perennial
budget problems. As Governor, he knows the importance of rail transportation to
the state and regional economy.
Mr. Chairman, Amtrak faces many challenges as we move toward the next cen-
tury. The system needs a more solid financial foundation. Every year, we seem to
narrowly avoid major disruption when funds run out.
At the same time, Amtrak must devote resources to important capital invest-
ments— such as the next generation of high-speed rail for the Northeast Corridor.
These investments will attract the riders needed to keep the system a vital part of
our country's transportation system.
If Amtrak is to deal with these and many other pressing issues, it will need peo-
ple like Tom Carper to help make the important decisions.
Mr. Chairman, and members of the Committee, I can think of no one who is bet-
ter prepared or more able to make those decisions than Governor Carper. I hope
the Committee will approve him quickly so that important work can begin. Thank
you.
Senator Exon. Senator Biden, thank you very much. We appre-
ciate your coming in this morning to help out. I am very much im-
pressed vnth both of these nominees. I think it is nice that you and
Senator Feinstein have come to help us in making this decision. I
assure you we will be moving very, very rapidly.
I certainly know of the keen interest you have shown over the
years, Senator Biden, in Amtrak. We are very glad to have the
Governor coming onboard. This is a particularly difficult time for
Amtrak with the capital needs they obviously have and the reve-
nues still not matching what we hoped they would, but progress is
being made.
Senator, you are welcome to stay as long as you wish. I know you
have other appointments. I have no questions of you. If you wish
to leave now, you are excused.
Senator Biden. Mr. Chairman, I am to chair a hearing on judi-
cial nominations. I am not sure there are any from Nebraska, but
I am going to get over there as quickly as I can.
And, as Senator Feinstein will tell you in a moment, she told Mr.
Downs, when Amtrak is not on time — or put it more precisely.
When I am not on time at a hearing, it is automatically assumed
it is Amtrak's fault. [Laughter.]
So, I do not want to have Amtrak get the rap for my being late
for a 10 o'clock judiciary hearing. Thank you for letting me present.
Senator ExoN. Senator Biden, thank you very much for being
here.
Senator Feinstein, welcome to you.
STATEMENT OF HON. DIANNE FEINSTEIN, U.S. SENATOR FROM
THE STATE OF CALIFORNIA
Senator Feinstein. Thank you and good morning, Mr. Chairman.
I am very pleased to be here on behalf of Celeste McLain to rec-
ommend her to you for appointment to this board.
As my colleague and friend, Joe Biden, said, Amtrak is certainly
the wave of the future, and Delaware is probably a much bigger
rail State than California. I wish it were the reverse, and I think
the public benefit would be much greater should it become the re-
verse.
And so I am hopeful that this nominee will really be very diligent
in the pursuit of a good Amtrak system and, where possible, of ex-
tending that system and, I must say, particularly in California
where for a long time I have had a dream of a rail spine down the
center of the State that could take high-speed rail and really bring
it into the future.
Let me tell you a little bit about the nominee, Mr. Chairman.
She is presently a trustee and audit committee member of the Pil-
grim Prime Rate Trust, which is a closed-end mutual fund which
invests in senior collateralized corporate loans. The fund has ap-
proximately $800 million in assets and its shares trade on the New
York Stock Exchange.
She is also a trustee of a number of other funds in the Pilgrim
Group — the International Trust, the Strategic Investment Series,
the Institutional Securities Trust, the Corporate Utilities Fund, the
Global Investment Series, and GNMA Fund. She is a member of
the American Arbitration Association, and she is also a member of
the Complex Case Panel of that association.
She has served as a member, from 1985 to 1993, of the California
Board of Accountancy. And, in the capacity of board member, she
has received an award for exceptionally meritorious service from
the California Board of Accountancy in 1994.
From 1979 to 1986, she was a member and assistant general
counsel and assistant secretary of Tiger International, which was
the holding company for the Flving Tigers, among other entities,
which is now owned by Federal Express. She is an attorney and
had been employed by O'Melveny and Meyers in Los Angeles from
1974 to 1979.
She has been a resident of California for the past 20 years since
moving from New York City. And I believe that she will be a strong
and forceful advocate for Amtrak on this board and am very
pleased that she will be able to join the distinguished Governor of
Delaware.
So, it is with great faith and confidence that I commend her nom-
ination to you this morning, Mr. Chairman, and I thank you.
Senator ExoN. Senator Feinstein, thank you, very, very much, I
thank you for being here this morning. We appreciate it very much.
As I said a few moments ago, I am impressed with both of these
nominees. The fact that you have taken time to come over here will
just further enhance our efforts to move these nominations along
and get them approved. I believe consideration and approval will
be in short order.
As one who has been involved in Amtrak for a long, long time,
I notice you mentioned that Amtrak is probably used more along
the east coast than it is on the west coast. That also is true with
regard to my middle section of the country. But, Amtrak plays a
very key, important role.
I think you have recognized, Senator Feinstein, that in the years
to come, I believe, with high-speed rail if it comes into play, we are
going to see a highly populated State like California become more
and more of a key player in the whole rail passenger service indus-
try.
So, thank you for your help and your support. I invite you to stay
as long as you can. I know you have other commitments. I have
no further questions for you, and you are excused to leave at your
convenience. Thanks for being here.
Senator Feinstein. Thank you very much, Mr. Chairman.
Senator ExoN. Without objection, at this time, I would ask that
the full statement of the chairman be placed into the record at this
point, along with written statements in support of the two nomi-
nees by Senator Roth of Delaware for Grovernor Carper, and Sen-
ator Boxer of the great state of California for Ms. Pinto McLain.
[The prepared statements of Senator Exon, Senator Rollings,
Senator Burns, Senator Roth, and Senator Boxer follow:]
Prepared Statement of Senator Exon
I am pleased to call the Senate Commerce Committee to order. Today the commiit-
tee considers the nominations of the Honorable Thomas R. Carper, the Governor of
the State of Delaware, and Celeste Pinto McLain, of the State of California, to the
Amtrak Board of Directors.
In these nominees, the President has presented two individuals of distinct accom-
plishment and commitment to passenger rail. Governor Carper served for ten years
in the U.S. House of Representatives, six years as Delaware's Treasurer and now
as Governor of the State of Delaware. Like the junior Senator from Delaware, Joe
Biden, I understand that Governor Carper commuted between Delaware and Wash-
ington, D.C., on Amtrak during his service in the U.S. Congress.
Celeste Pinto McLain also is a distinguished citizen and an individual very famil-
iar with the rail industry. A graduate of the Georgetown School of Law and Trinity
College, Ms. Pinto McLain has been active in public service in the State of Califor-
nia. Her work with the rail industry and expertise in government finance will serve
Amtrak and the nation well.
I am especially pleased that both nominees have experience in fiscal matters and
both have a record of fiscal discipline. With the limited number of federal dollars
available to Amtrak, we must work together to make every dollar count.
As a member of the Senate Budget and Commerce Committees, during the two
previous administrations, I fou^t a sometimes lonely battle to keep Amtrak alive.
Amtrak has survived twelve years of various attempts to eliminate funding, to pri-
vatize, and to spin-off profitable lines. I like to say, we had a patient on life-support.
Today, our patient is coming back to life.
With the Senate and House passage of similar high-speed rail bills, the introduc-
tion of a new Amtrak Reauthorization Act, Tom Downs at the helm of Amtrak, Con-
gress and the Clinton administration have breathed life into the vision of a world
class, American passenger rail system.
In many ways, policy makers are at a turning point for Amtrak. I strongly sup-
port a national transcontinental passenger rail system. At the same time, the need
to continue to reduce the federal budget deficit continues to grow. I strongly believe
that Amtrak is a good investment. Ifthere were no Amtrak, the cost to tax payers
would be enormous. America can not afford to build enou^ roads, or airports to ac-
commodate Amtrak passengers via other modes of transportation. In the future, rail
service will be a key to reducing air pollution and energy consumption.
In world-class rail service, the Nation has an opportunity to unite its goals for
technology development, urban renewal, employment, environmental protection, and
energy conservation.
I look forward to hearing from the nominees about their vision for the future of
passenger rail service in the United States.
Prepared Statement of Senator Rollings
The Commerce Committee is holding a hearing today on the nominations of
Thomas R. Carper, Governor of Delaware, and Celeste Pinto McLain, Trustee of Pil-
grim Mutual Funds, to be members of the Board of Directors of the National Rail-
road Passenger Corporation (Amtrak). The Amtrak Board of Directors is composed
of nine members, three of whom are appointed by the President with the advice and
consent of the Senate.
The position for which Governor Carper has been nominated is one that, by law,
is filled by a chief executive officer of a State with an interest in rail transportation.
Governor Carper has been nominated to replace Governor Tommy Thompson of Wis-
consin. The position for which Ms. Pinto McLain has been nominated is one that,
by law, is filled by a representative of the business community with an interest in
rail transportation. Ms. Pinto McLain has been nominated to replace the unexpired
term of Carl W. Vogt which ends in 1995. Ms. Pinto McLain also is nominated for
a subsequent fiill term of four years on the Amtrak Board of Directors.
Governor Carper was elected in 1993. Prior to this election, he served five terms
as Delaware's Congressman in the U.S. House of Representatives and six years as
Delaware's State Treasurer. Governor Carper earned a B.A. in Economics in 1968
from Ohio State University and served for five years as a Navy aviator, including
a tour of duty in southeast Asia during the Vietnam War. In 1975, he earned an
M.B.A. degree from the University of Delaware and won his first election to the
State Treasurer's office the following year. In 1983, he won his first election as Dela-
ware's Representative to the House. The Governor is married and has two children.
Governor Carper's government service has given him wide knowledge of the issues
surrounding Amtrak. First of all, his service in the House required his participation
in the debates over the role and funding of the Nation's transportation system in
general and of Amtrak's place in that system in particular. Moreover, as a Congress-
man he commuted between Delaware and Washington, D.C., almost daily. Thus, he
experienced Amtrak as a consumer, a fact that should give him valuable insights
into what must be done to ensure that the Nation has first-rate rail service.
An accomplished attorney, Ms. Pinto McLain, since 1990, has been a trustee and
member of tne Audit Committee of the Pilgrim Group's Prime Rate Trust, which in-
vests in senior, collateralized corporate loans. She also is a trustee and member of
the Audit Committee of a number of other mutual fiinds for the Pilgrim Group. She
has served as Assistant General Counsel and Assistant Corporate Secretary at Tiger
International, Inc., a transportation holding company engaged in international and
domestic railcar leasing. Ms. Pinto McLain also has served as an arbitrator for the
American Arbitration Association since 1981. She was appointed to the California
Board of Accountancy in 1985 by the California Speaker of the Assembly, and she
recently concluded her second four-year term. This ooard supervises the professional
activities of all certified public accountants in the State of California.
Ms. Pinto McLain, a California resident, received her J.D. from Georgetown Uni-
versity's Law Center in 1974. She graduated cum laude in 1971 from Trinity College
with a B.A. in English. Ms. Pinto McLain's expertise in mutual funds and experi-
ence with arbitration should prove beneficial in nelping to resolve funding shortages
and to find alternative sources of revenue for Amtrak.
The experiences and insights of the nominees will be most helpful to Amtrak as
it confronts the serious challenges it faces. I long have been committed to a safe,
economically viable, and efficient national rail passenger transportation network. At
the same time, however, constrained federal resources have forced careful consider-
ation of how best to maximize public investment in this important transportation
mode. If confirmed as members of the Amtrak Board, Governor Carper and Ms.
Pinto McLain will have major roles in helping to resolve these concerns as Amtrak
moves forward into the next century.
On behalf of the Committee, I welcome Governor Carper and Ms. Pinto McLain
this morning, and I look forward to their testimony.
Prepared Statement of Senator Burns
Thank you for holding this important hearing. Since 1970, Amtrak has provided
an important service to travelers across the United States by maintaining reliable
passenger rail service, and I hope to see this quality of service continue through the
work of the two nominees here today. Gov. Thomas R. Carper and Ms. Celeste Pinto
McLain.
Through my State of Montana, Amtrak's Empire Builder follows Amtrak's north-
em route and connects the Midwest's largest cities: Chicago, Minneapolis, Milwau-
kee, and Seattle. The Empire Builder stops in many of the small rural towns along
the Hi-Line area of Montana and provides an essential service to the residents of
these communities. Amtrak's service is extremely important to these remote areas
as it is often the only mode of public transportation available.
Reliable passenger rail service to these areas is a necessity given the extreme liv-
ing conditions of this area. Severe winter weather conditions often make highway
travel extremely dangerous and air service is virtually unavailable. During these pe-
riods, the Empire Builder allows access to many of the most basic life services. Serv-
ices such as access to medical facilities is particularly important to the elderly popu-
lations of this area. Residents of these rural communities are separated from even
the most basic medical services taken for granted in more populated areas.
The Empire Builder also plays an important role in sustaining the economic via-
bility of these smaller communities. Amtrak's service to these areas provides reli-
able transportation for commercial products — a vital link in ensuring the livelihood
of many of the area's small businesses.
However, while the Empire Builder once provided the quality of service essential
to this area, delays and unannounced schedule changes have become more and more
frequent to this line. I would like to know if these nominees will support fundamen-
tal changes to address this situation and reinstate the "reliability" required for Am-
trak's service in Montana.
In addition, new funds have been authorized for capital grants. Amtrak has stud-
ied several different options for a southern route through Montana. These lines
would establish service between Seattle-Denver, via Missoula, Laurel (Billings),
Thompson Falls, Paradise, Helena, Bozeman, and Livingston, or service between Se-
attle-Fargo-Minneapolis-Chicago, via Glendive, Billings, Helena, Missoula, Miles
City, Forsyth, Livingston, Bozeman, Paradise, and Thompson Falls. These lines
would improve Amtrak's transcontinental service, and provide the competing con-
nection between Seattle and Florida. I would like to know if these nominees would
support a route expansion in Montana and if increases in capital grants would be
directed for funding to get these proposals off the drawing board.
Thank you, Mr. Chairman.
Prepared Statement of Senator Roth
Mr. Chainnan, it's my pleasure to endorse President Clinton's nomination of Tom
Carper to the Amtrak Board of Directors. I believe his qualifications for the position
are without question, and I do recommend him without any reservations.
As Delaware's Governor and former Member of Congress, Tom knows Amtrak and
its operations well. But I know that he appreciates Amtrak in a way few others can.
And that is because for many years, along with Joe Biden and myself, Tom helped
make up the fraternity of early morning — sometimes very early morning — commut-
ers heading to Washington from Wilmington on the Metroliner nearly every busi-
ness day.
I can assure you, that on occasion we did not relish this early morning ritual —
but you could always count on Tom to arrive at the station in a cheery mood and
with a smile on his face. I guess it was due to his love of riding the train, his love
for the railroad.
While I don't know for a fact, I would venture to say that Tom Carper may well
have more firsthand experience with Amtrak than anyone else considered by the
board. That is what makes his nomination particularly unique.
Unique because he will bring with him the personal knowledge of iust what
makes a railroad tick. The experience of someone who has spent countless hours
and thousands of miles riding the rails as an Amtrak passenger should prove in-
valuable in considering issues affecting Amtrak and the service it provides to the
public.
Tom Carper understands the importance of the railroad system and the need to
improve and maintain the rail infrastructure in this country. In particular, he ap-
preciates how an efficient, well-run rail system can and should operate and the ben-
efits it can bring.
As a colleague in Congress, I was pleased to work with both he and Joe on Am-
trak issues. As you may be aware, Amtrak employs over 900 talented, committed,
and hardworking men and women in our small State of Delaware. It is these peo-
ple— machinists, electricians, and craftsmen of every order — who keep Amtrak run-
ning smoothly and safely — transporting millions of passengers every year.
Indeed, the Wilmington and Bear, DE, maintenance yards have developed a rep-
utation for excellence over the years that is not to be surpassed. In fact, just this
past spring, Amtrak President 'Tom Downs personally came to Delaware on two sep-
arate occasions to present the President's Award for Excellence and Safety to the
8
men and women at our shops. These dedicated workers keep the Northeast Corridor
moving at high speed.
As I mentioned, the Delaware delegation in Congress and Tom as Delaware's Gov-
ernor have worked to ensure that the vital transit Unk that Amtrak provides is not
weakened, and is never severed. Without Amtrak's Northeast Corridor, our east
coast airports and highways would be absolutely unmanageable.
Tom knows that strong Amtrak operations in our State and across the Nation are
of singular importance as this Nation moves forward with the development of high-
speed rail and other new modes of rapid, environmentally friendly, and fuel efTicient
transportation.
For all these reasons, I wholeheartedly support the nomination of Gov. Tom Car-
per to the Amtrak Board of Directors, and encourage you to act favorably and quick-
ly on his confirmation.
Senator EXON. With that, I would Hke to go to a few questions
I have for both nominees. I have chaired many, many hearings
with regard to Amtrak nominees. I never have chaired a hearing
where I feel that the background and experience of the nominees
which these two represent have ever been higher, and I am anxious
to move these nominations along.
I suspect, with the backgrounds you both bring, you have had
time to give some thought to some of the challenges you are going
to face as part of the new Amtrak family. Let me start with you,
Governor, if I may, and then Ms. Pinto McLain, please answer the
same question.
What, in your view, are the biggest challenges facing Amtrak
today and tomorrow, and what suggestions do you have for resolv-
ing any or all of these problems which this important rail transpor-
tation system faces in the future?
STATEMENT OF THOMAS R. CARPER, NOMINEE, MEMBER,
BOARD OF DIRECTORS, AMTRAK
Governor Carper. Senator Exon, let me try to respond to that.
It is a big question; let me try to respond to that if I may.
First of all, let me just say as a prelude to responding how much
I appreciate Senator Biden being here to introduce me to you and
to your committee and staff, and say how much he has meant to
Amtrak and certainly to our State.
If I had to list several of the top challenges that I believe we face,
one of those is the condition of the rolling stock of Amtrak itself
Amtrak is having a difficult time meeting the expectations of its
customers. Customers want to arrive on time. Senator Biden noted
here earlier that, when he is late, Amtrak is blamed whether they
are responsible or not. Ninety-six percent of the Metroliners are
running on time this summer.
In the Northeast Corridor, non-Metroliner, and outside of the
corridor, the on-time performance is not nearlv as good. And when
passengers sit for an hour or two or are late by an hour or two in
getting to their destinations, they are not happy. They are not
happy when the on-train service personnel are less than helpful or
less than courteous.
I would say one of the major challenges that we face is upgrading
the condition of the equipment, and that includes not just the roll-
ing stock but also the track, and working with the freights who
own much of the track outside of the corridor so that they will be
willing to share that track in a way that will enable Amtrak to per-
form more nearly on time.
A second consideration that I have is the morale of the
workforce. As Senator Biden said, there are a number of Amtrak
employees who work throughout the corridor but who live in Dela-
ware, and there are a number who work in the maintenance yards
in northern Delaware, The morale of the workforce has not been
good for some time.
I think it goes beyond the question of compensation, but a ques-
tion of whether or not they believe they are listened to. We are try-
ing to do in State government what you are trying to do in Federal
Government, and that is to push the decisionmaking authority
down to the lowest level of authority, to the men and women who
are on the front line, the firing line, who are dealing with the cus-
tomers, providing the service, whether it is on the train or in the
maintenance yard, to empower them to be able to meet the needs
of the day.
I think Amtrak, certainly Tom Downs, has acknowledged that
Amtrak needs to do the same kind of thing and cut out, as we have
tried to do in Government and as we are trying to do in the private
sector, some of the levels of management that tend to make things
worse, not better.
The third challenge I think we face is the question of how do we
build and maintain support and service within the densely popu-
lated corridors, not just the Northeast but it could be Florida, Or-
lando to Tampa or Orlando to Miami; it could be California, San
Diego to Los Angeles; or it could be the Midwest, Chicago to Mil-
waukee or Omaha, Chicago to Kansas City. Any number of them.
Chicago to Detroit.
How do we improve the quality of service but, at the same time,
not abandon service elsewhere and still try to reduce the operating
deficit of this corporation? That is a monumental challenge. My his-
tory as a Congressman would suggest that, as soon as we begin to
consolidate the operations of Amtrak just to a few densely popu-
lated corridors, the political support here in this body and in the
House of Representatives begins to dry up.
Those are some of the major challenges that we face and ones
which I look forward to working on.
Senator EXON. Thank you very much.
[The biographical data of Governor Carper follows:]
Biographical Data
Name: Carper, Thomas R.; address: 600 W. Matson Run Parkway, Wilmington,
DE 19801; business address: Carvel State Office Building, 820 N. French St., Wil-
mington, DE 19801.
Position to which nominated: Director, National Railroad Passenger Corp.; date
of nomination: August 1994.
Date of birth: January 23, 1947; place of birth: Beckley, WV.
Marital status: Married; full name of spouse: Martha Ann Stacv Carper; names
and ages of children: Christopher Thomas, 6; and Benjamin Michael, 4.
Education: Ohio State University, 9/64—12/68, B.A., Economics; and University of
Delaware, 9/73-6/75, M.B.A.
Employment: 12/68-6/73, U.S. Navy, Moffet Field, CA, Naval Flight Officer; 9/73-
7/91, U.S. Navy Reserve, Willow Grove, PA, Naval Flight Officer; 12/75-7/76, State
of Delaware, Dover, DE, Economic Development; 11/76-1/83, State of Delaware,
Dover, DE, State Treasurer; 1/83-1/93, U.S. House of Representatives, Washington,
DC; and 1/93-present, State of Delaware, Dover, DE, Governor.
Government expenence: Flight Officer, U.S. Navy and Naval Reserve, 1968-91;
Industrial Development Specialist, State of Delaware Economic Development Office,
10
1975-76; State Treasurer, State of Delaware, 1976-«3; Congressman, State of Dela-
ware, 1983-93; and Governor, State of Delaware, 1993-present.
Political afliliations: As an elected official and candidate, I have been an active
participant in electoral politics for over 18 years. During that time, my political
campaign committees and I have rendered contributions and support to many
Democratic candidates for office. The financial disclosure reports of my State and
Federal campaign committees are a matter of public record and reflect these activi-
ties.
Memberships: Cochair, Welfare Reform Task Force, National Governors* Associa-
tion; member, Democratic Governors' Association; life member, NAACP, Delaware
Chapter; member. Veterans of Foreign Wars; member, American Legion; member,
Vietnam Veterans of America; member. Common Cause; and member, New Castle
Presbyterian Church, New Castle, DE.
Honors and awards: During my career, I have been fortunate enough to receive
recognitions of this kind. Some highlights of my career are included in the biog-
raphy that may be found in the committee files.
Published writings: As an elected official, I have frequently provided op-ed pieces
to Delaware newspapers. These are the extent of my publications and I have not
kept a bibliography of such writings.
Senator ExoN. Ms. Pinto McLain,
STATEMENT OF CELESTE PINTO McLAIN, NOMINEE, MEMBER,
BOARD OF DIRECTORS, AMTRAK
Ms. Pinto McLain. Mr. Chairman, thank you for your time and
also for expediting this, and it really is a pleasure and an honor
to be here. And thank you for your extremely kind comments.
With respect to your question, I agree with everything that the
Governor has said, and I guess I look at it from a slightly more
global perspective. So, I would say that the questions about on-time
performance and the condition of the equipment are probably those
that I would characterize as competitive questions. And I think
Amtrak's two major problems are competitive and financial. Clear-
ly, one will not be resolved without resolving the other.
The Governor has provided much of that information. In terms
of suggestions, I think that it is appropriate that Amtrak has at-
tempted to obtain financing from private sources that, as you
know, are already involved in things like high-speed rail. I think
Amtrak needs to continue doing that and to continue pursuing with
a great deal of imagination and creativity other forms of private fi-
nancing and partnering with States like California, which has dedi-
cated about $200 million to passenger rail transport, and with
counties, cities, and wherever it can get funding assistance.
I think it is very clear to Amtrak, from the little I know, that
they do not want to and no longer can rely exclusively on the U.S.
Government as a primary source of funding. And I know that we
all share the goal of greater economic self-sufficiency at some point
in the future. I also think it is an extremely long road to get there.
I think it is a goal that is not only laudable but, to some extent
and at some point, hopefully, doable at a minimum Amtrak must
aggressively pursue greater competitiveness and significantly im-
proved long-term financial stability.
Senator ExoN. Thank you, Ms. Pinto McLain.
[The biographical data of Ms. Pinto McLain follow:]
Biographical Data
Name: McLain, Celeste Pinto; address: 515 North Clifford Avenue, Los Angeles,
CA 90040; business address: P.O. Box 49835, Los Angeles, CA 90040.
11
Position to which nominated: Member of Board of Directors, National Railroad
Passenger Corp. (Amtrak); date of nomination: August 22, 1994.
Date of birth: September 10, 1949; place of birth: Greenwich, CT.
Marital status: Married; full name of spouse: Thomas Elliott McLain; names and
ages of children: John Thomas, 8; and Brannack Joseph, 4.
Education: Georgetown University Law Center, 1971-74, J.D.; Trinity College,
1967-71, B.A.; and Convent of Sacred Heart, 1964-67, Hi^ School Diploma.
Employment: Summer 1971, Army R&D News Magazine, Washington, DC, re-
search writing and editing; fall 1972, LEAA, Department of Justice, Washington,
DC, legal research and writing; summer 1973, Davis Polk & Wardwell, New York,
NY, legal research and writing; 1974-79, O'Melveny & Myers, Los Angeles, CA, law
Tirm associate; 1979-86, Tiger International, Inc., Los Angeles, CA, lawyer (business
and transportation); 1985-93, California Board of Accountancy, Los Angeles, CA,
policy ancl compliance and board member; 1990-present, Pilgrim Group Mutual
Funds, Los Angeles, CA, board member and trustee; 1981-present, American Arbi-
tration Association, Arbitrator; and 1988-present, Executor and Trustee under will,
Financial and Fiduciary.
Government experience: Army R&D News Magazine; Law Enforcement Assistance
Administration, Department of Justice; California Board of Accountancy; and Coro
(nonprofit training program for (jovemment service); and provided pro bono legal
counsel while at O'Melveny & Myers.
Political affiliations: Republican National Committee; Tiger International, Inc.
PAC; Senator Dianne Feinstein; Mayor Richard Riordan; Gov. Pete Wilson; Robert
Mosbacher; Kathleen Brown; Speaker Willie Brown; President Clinton; John Emer-
son; Laura Klinger, Kathleen Townsend (cousin); and Joseph Kennedy (cousin).
Memberships: American Arbitration Association, member and arbitrator; Trinity
College Alumnae Association, board member; (Georgetown University National Law
Alumni Board and Law Women's Forum, L.A. Chair and Steering Committee mem-
ber; Phi Beta Kappa; Luminaires, Jrs (Board of Directors, 1991-92, Committee
Chair, 1992-93); John Thomas Dey School Parents Club and Committee Chair; Sun-
shine School Room Parent; California Bar Association; and Member, Organization
of Women Executives (President and Board Member, 1984-88).
Honors and awards: Award for Exceptionally Meritorious Service, from California
Board of Accountancy (1994); Leadersnip Achievement Award in Business (1981);
Steering Committee and Los Angeles Chair, Law Women's Forum, (jeorgetown Uni-
versity Law Center (1992-present); and invited to Board of Directors of Luminaires,
Jrs (1994-95).
Published writings: "Fire and Ice" published in Horizons (alumnae magazine), vol.
XX, No. 3, Summer, 1992.
Senator ExoN. Very good. Let me talk about safety, because safe-
ty in the whole transportation area has been at the cutting edge
of what we have done on this committee in various areas. When
we talk about safety, naturally we think of all the modes of trans-
portation— including the tragedies with which we wrestle from
time to time in surface transportation here — to make sure that we
may learn something from the mistakes of the past and correct
them in the future. We are very concerned about safety today.
In your opinion, how can Amtrak continue to improve the safety
of its operations, both in the Northeast Corridor and over the
tracks owned by other railroads? May I start with you on that one,
Ms. Pinto McLain?
Ms. PEP«rro McLain. Certainly. Thank you. It was pointed out to
me this morning that, actually, Amtrak's safety record is perhaps
even better than we would anticipate. I know it is a matter of tre-
mendous concern, particularly with respect to the safety of the pas-
sengers on the trains.
I understand that there have been about 88 passenger fatalities
in the history of Amtrak, which is a pretty good record. And one-
half of those, most unfortunately, occurred a year ago in the acci-
dent in Mobile, AL, where the barge in the bayou hit the bridge
just before the Amtrak train tried to come across.
12
One of the board members whom you confirmed, perhaps a year
ago, Dan Collins, has been integrally involved in other safety meas-
ures such as Operation Red Block, which is addressing problems of
potential alcohol and drug abuse among railroad employees. He
also is involved in a safety program developing and installing cross-
bars, I think you call them cross-bars, by railroad crossings. Appar-
ently, the major safety issue for nonpassengers relates to grade
crossings and track running through areas of the country, such as
in California, which cannot he gated or guarded completely.
There will probably always be a concern about those folks, of
whom we have an unfortunate large number in California, who
want to play chicken with a locomotive. I do not think that is a
winning proposition.
Setting aside that contingent, I know, overall, there is a tremen-
dous degree of concern at Amtrak that we maintain our record as
an extremely safe mode of transportation. And statistically, it ap-
pears passenger rail carriage really is an extremely safe mode.
Senator ExoN. Governor.
Governor Carper. Senator, there is little that I can add to what
Ms. Pinto McLain has said. I think it is important that we keep
in perspective, as she has, the actual number of lost lives. And the
loss of one American life, the loss of one passenger, is too much I
think for any of us, but it is important that we keep in mind that
fewer than 100 people have perished in Amtrak accidents over the
past 20-plus years. Just in the past month we have had more than
that number of people die in a single tragic airplane accident.
I think, if Amtrak did not have bad luck, they may have no luck
at all. Almost without exception, the accidents that have occurred
in the last several years have occurred not because of the fault of
the Amtrak crew, not because of the fault of Amtrak maintenance
personnel or problems with the rolling stock. Problems have been
a barge running into a bridge; the problems have been others creat-
ing and lending to these problems.
I am not sure how one at Amtrak deals with what, in some cases,
is just fate, bad luck, poor luck. I think we have to do a better job
perhaps at Amtrak in getting that message out as much as any-
thing, and continue to try to focus, as Celeste has suggested, on
safety issues within our own house.
Senator ExoN. Well, Governor and Ms. Pinto McLain, I have no
further questions at this time. We may have some additional ques-
tions for the record from either me or other members of the com-
mittee who could not make it this morning.
I certainly would like to say I am very confident that we will be
able to move your nominations through very, very quicklv. I also
would like to recognize that the man with whom you will be work-
ing, Tom Downs, the president of Amtrak, is here today — Tom,
would you stand, please? We are glad to have you.
I can assure you that I will do whatever I can to move these
nominations along quickly because I think, as I said before, the
nominees are particularly highly qualified by background and expe-
rience to help you tackle, Tom, the very important problems Am-
trak has ahead of it.
So, with that, let me say to the two nominees if there are addi-
tional questions for the record, they will be sent to you within the
13
next day or so. We would appreciate your answering those as
quickly as you can so we can put them into the record and expedite
the matter further.
With that, I see no problems, we will work diligently to move this
matter along and see that these nominations are cleared before the
recess.
Thank you for offering to serve. Thank you for being here this
morning, I am looking forward to working with you in the years
ahead for the good of passenger service on our rails.
With that, I thank you. We are adjourned.
[Whereupon, at 10:10 a.m., the hearing was adjourned.]
APPENDIX
posthearing questions asked by senator hollings and answers thereto by
Mr. Carper
Question. What do you feel are the major issues facing Amtrak today?
Answer. The lack of adequate resources to support the services bring provided;
the perception that the system is unsafe; the antiquated equipment and facihties
that were designed for the early to middle part of this century and not the 21st cen-
tury; and inadequate customer and market focus.
Question. What does high-speed rail mean to Amtrak's future? Do you support
the President's high-speed rail initiative?
Answer. High-speed rail means for Amtrak's and the country's future the oppor-
tunity to move people faster and further on our existing infrastructure and thereby
ease congestion in some of our heavily used transportation corridors. For example,
the 1-95 corridor from Washington to Boston has three major competing modes —
all paid with federal funds. The competitors are 1-95, the airports and the North-
east Rail Corridor. At this time, the 1-95 highway is congested and pressure is
mounting to expand it. Airports such as LaGuardia in New York are at capacity and
the Port Authority of New York and New Jersey is proposing a fourth jet port. The
answer is to ensure federal funds support, efficient, cost effective, environmentally
sensitive services. High speed rail meets these criteria.
Question. Please tell us about the potential benefits to Amtrak of the successful
completion and operation of the Northeast Corridor Improvement Program.
Answer. The major benefits are:
• improves the competitiveness for passenger rail system with the auto and plane
between New York and Boston;
• the improved competitiveness will result in fewer autos and thereby less con-
gestion and cleaner air; and
• provides the infrastructure for high-speed rail.
Question. Amtrak has proposed to reorganize its structure. When will this reorga-
nization be completed, and what benefits do you hope this reorganization will engen-
der?
Answer. The reorganization of Amtrak is a recognition that Amtrak is a business
with different products. By establishing business units devoted to the special cus-
tomer products means higher service levels to the customer, greater efficiencies, and
more cost effectiveness. At the same time that the individual business units are fo-
cused, headquarters can supply the support and cohesiveness needed to be an inte-
grated company.
Question. When the reorganization is complete, how many positions do you expect
will be eliminated, and what mechanisms would you recommend to effectuate these
eliminations?
Answer. At this time, I am not in position to answer that question. My initial
participation in the budget discussion indicates that between 500 and 600 manage-
ment positions could be eliminated permanently. How many other positions is dif-
ficult to say at this time.
PoCTHEARiNG Questions Asked by Senator Exon and Answers Thereto by Mr.
Carper
self-sufficiency
Question. Do you believe that Amtrak can become self-sufficient in the future?
Answer. I do not believe Amtrak can be completely self-sufficient in the future.
It could foreseeably cover its operating costs, but I do not foresee it being able to
cover all of its capital costs.
(15)
16
This situation is true for most modes of transportation even our highways need
increasing levels of public revenues to remain viable.
Question. Are there any programs you recommend implementing to accomplish
this goal?
Answer. I believe the management approach proposed by the President of Amtrak
is correct. The approach is to understand its costs and markets and then remove
lower priorities; and finally to scale back significantly the management of Amtrak.
These are appropriate first steps to start achieving self-sufficiency.
Congress can help too by not demanding service where the marketplace for years
has shown that there is no demand for service.
Question. Do you have any suggestions as to how Amtrak could increase its reve-
nues without significantly increasing its fares?
Answer. Running the company as a business, as Amtrak's President is proposing,
will cut significantly the cost of running Amtrak and thereby increase the existing
revenue/cost ratio. Other potential revenues can come from the states benefiting
from Amtrak's presence. Another source of potential revenue is the adjoining prop-
erty that Amtrak owns. Unfortunately it's limited, but the development of property
along major transportation hubs has always been where the return has been. This
was true when the private sector ran the passenger rail system.
Question. What do you believe should be the appropriate federal role in support-
ing Amtrak?
Answer. The federal government should require the Amtrak Corporation to pro-
vide the country with a "vision" for passenger rail. If the federal government agrees,
then it should assist in the fulfillment of that "vision." It can do so in phases that
restructure the federal role.
• The federal government participates through the Amtrak Board in determining
Amtrak's size, budget and vision. The government then helps to fund the services
through capital and operating contributions.
• The federal role should be as a provider of capital dollars to support services.
One of the key reasons for Amtrak's deficit is its severe undercapitalization. A pos-
sible way to provide support is to direct a portion of the gas tax to Amtrak. One
source could be some of the 2.5 cents currently dedicated to deficit reduction.
• Third, aft,er a predetermined set of time the federal government transitions out
of operating subsidies to Amtrak, except for those lines that are directed by Con-
gress to remain in service. For those lines, the full cost of service should be borne
by the federal government.
CUSTOMER SERVICE
Question. Passengers write to the subcommittee with varied complaints about
their treatment while traveling on Amtrak. Do you see improving passenger service
treatment as an issue, and if so, what do you believe that Amtrak should do about
it?
Answer. Providing market driven, customer focused passenger service is the fun-
damental purpose for Amtrak. Meeting customer expectations is therefore critical to
Amtrak's success.
Amtrak has to explore several areas to improve passenger service:
• Flatten its organization structure to achieve accountability in its management;
• Set organizational and route specific passenger service performance measures;
• Develop a recapitalization plan to improve the reliability of its equipment and
condition of its rights-of-way. I suspect that many of the customer complaints
revolve around how untimely Amtrak is. In many cases, this is a direct result of
very old equipment breaking down; and
• Improve training for those directly serving the passengers and those maintain-
ing the equipment.
These are some of the things Amtrak could pursue.
Question. Do you have any suggestions as how to increase the quality of customer
services for Amtrak passengers within the financial constraints Amtrak faces?
Answer. I believe my answer to the previous question covers this well.
HIGH-SPEED RAIL
Question. Please provide the committee your views regarding the potential and
feasibility of high-speed rail corridors throughout the country and whether high-
speed rail operations should be concentrated only in particular regions.
Answer. High-speed rail technology is a fact and systems are running efficiently
in other countries.
17
High-speed rail in this country could be initially invested in only selected cor-
ridors where the density of population and the competitiveness of high-speed rail
against other modes makes sense.
Congress should invest in hi^-speed rail based on sound market and economic
rationales.
Question. What do you see as Amtrak's role in high-speed rail initiatives?
Answer. As a provider of intercity rail passenger services, Amtrak's initial role
should be as the tester of the equipment and the determiner of the best type and
location for high-speed rail service.
Subsequent roles can be as the sole provider of the service; joint partnerships with
the private sector, possibly even a subsidiary corporation; and possibly as the land-
lord that allows the private sector to run the service on Amtrak property or rights-
of-way and thereby collects a percentage of the revenue.
These are some of the possibilities.
POSTHEARING QUESTIONS ASKED BY SENATOR ROLLINGS AND ANSWERS THERETO BY
Ms. Pinto McLain
Question. What do you feel are the major issues facing Amtrak today?
Answer. Amtrak faces fundamental issues in the areas of service and finance,
controlling costs and responding to the rapid deterioration of capital assets are Am-
trak's primary problems, operating with the stock, track, and fixed -facilities that
Amtrak currently owns, it is hard to imagine how the railroad can improve service
and reduce costs to a level that would allow the railroad to thrive. Similarly, Am-
trak suffers a seriously eroded cash position. Borrowing money on the open market
in order to pay bills is a dangerous and expensive route. A multitude of other factors
affect these issues, such as Amtrak's role in high-speed rail technology (with the re-
lease next year of a contract for trainsets), the freight railroad operating agreements
which expire in 1996, and labor agreement negotiations.
Question. What does high-speed rail mean to Amtrak's future? Do you support
the President's high-speed rail initiative?
Answer. Amtrak's implementation of Boston to D.c. service with new U.S. -built
trainsets could have a profound impact on high-speed technology around the world.
It should lead the way into technology for the next century, boost American tech-
nology and, hopefully, significantly boost Amtrak ridership and revenues. Getting
people back onto trains on higher quality and faster equipment is imperative to Am-
trak as a national passenger rail service.
I think the President's nigh-speed rail bill, recently approved by Congress, a sen-
sible approach to high-speed rail. I support it. I would like to have seen development
and construction as an eligible activity for funding, but I recognize that there are
several labor and liability issues that remain unaddressed. It is still a good first
step and a good boost for the high-speed rail effort.
Question. Please tell us about the potential benefits to Amtrak of the successful
completion and operation of the Northeast corridor Improvement Program.
Answer. The program is designed to enable Amtrak to implement its initial high-
speed rail service. As mentioned above, Amtrak is hopeful that this project will in-
crease ridership and revenue as well as the quality of service Amtrak provides.
Question. Amtrak has proposed to reorganize its structure. When will this reorga-
nization be completed, and what benefits do you hope this reorganization will engen-
der?
Answer. The Northeast corridor Strategic Business Unit, known as "NEC SBU,"
officially began operation on October 1, 1994. The other two SBUs in development,
the Intercity SBU and Western SBU, should begin operating early in 1995. In the
meantime, management downsizing, voluntary and, if needed, involuntary, is taking
glace. The major portion of these reorganization steps should be completed by
pring of 1995.
This reorganization endeavors to make Amtrak a much leaner, more efficient and
more customer-oriented organization. SBUs are designed to decentralize certain de-
cisionmaking, by encouraging management decisions made by managers actually on
or near the affected people or places.
The reorganization also should result in a far clearer picture of the revenues and
costs, financial as well as otherwise, associated with each product line Amtrak of-
fers. Each SBU is considered a "product line". In determining how to best run its
business, Amtrak seeks reliable, detailed data on all aspects of each SBU. Any sug-
gestions as to changes or improvements in an SBU must include both financial data,
and an assessment of all efiects a change might have. For example, a community
BOSTON PUBLIC LIBRARY
18 3 9999 05705 .7950
without other forms of public transportation could be severely impacted by a route
discontinuance or station closure.
Many of these issues will be resolved by Congress. Amtrak's role is to provide ac-
curate information and proposed solutions to assist Congress in balancing the com-
peting interests facing both government and Amtrak. Hopefully the reorganization
will allow the Board and executive staff of Amtrak to make recommendations and
business decisions more rationally.
Question. When the reorganization is complete, how many positions do you expect
will be eliminated, and what mechanisms would you recommend to effectuate these
eliminations?
Answer. It is anticipated that management ranks will drop about 600 positions,
from about 2,100 at the end of FY94 to about 1,500 by Spring of 1995. This is being
effectuated, as suggested by management and with Board approval, first by vol-
untary separation. Amtrak has ofTered voluntary retirement packages to the ap-
proximately 250 eligible management employees; it is now in the process of offering
voluntary separation packages to the other employees. If these two mechanisms do
not result in a sufficient reduction in management forces, then involuntary separa-
tion will be considered. That unfortunate reality has been announced to all Amtrak
employees. Involuntary separation decisions are intended to track the needs of the
corporation as it undergoes the reorganization and SBU implementation, which will
be taking place simultaneously.
posthearing questions asked by senator exon and answers thereto by ms.
Pinto McLain
Question. Do you believe that Amtrak can become self-sufficient in the future?
Are there any programs you recommend implementing to accomplish this goal?
Answer. Every mode of transportation in the United States receives a subsidy
and there is no passenger railroad in the world that is entirely self-sufficient. Some
receive operating subsidies from the government, some receive capital assistance,
some receive both. I hope Amtrak can become more eflicient and perhaps cover a
greater portion of its ojjerating costs by making the right capital investments, bring-
ing costs under control, and enhancing revenues. The current restructuring and di-
vision into "strategic business units" will provide a better picture of Amtrak costs,
and of existing and potential revenues.
Question. Do you have any suggestions as to how Amtrak could increase its reve-
nues without significantly increasing its fares?
Answer. In the passenger revenue arena, I think Amtrak can increase revenues
by improving the quality of service. This includes improving train stations, informa-
tion and reservations capability, on-time performance and the on-board experience.
The failure of a customer to return, because of a bad experience on Amtrak has two
negative effects: it is harder and more expensive to recruit new customers than to
8 reserve current customers, and unhappy customers spread negative publicity,
[opefully, the opposite is also true when the customer has a positive experience.
Perhaps Amtrat also should focus some efibrt in identifying and then developing
those areas that have greatest moneymaking potential, possibly including Auto
train or postal service contracts. It should also consider other initiatives, consistent
with good business development, that maximize revenues, such as selling advertis-
ing space on board trains.
Question. What should be the appropriate federal role in supporting Amtrak?
Answer. Logic suggests that, at a minimum, Amtrak should receive the same type
and level of federal support other transportation modes receive. This includes sig-
nificant capital investment. Automobiles and buses benefit from massive highway
spending, in and outside of the highway trust fund. Airlines benefit from federal
and state investments in airports, including tax exempt bond financing and by hav-
ing their dispatching operations performed for free by the Federal Aviation Adminis-
tration. These are tne transportation modes with which Amtrak competes. There-
fore, Amtrak should receive similar capital and/or operating assistance. If the Na-
tional Transportation Policy is to have a rail passenger service, then we need to be
prepared to invest in it.
Question. Passengers write to the Subcommittee with varied complaints about
their treatment while traveling on Amtrak. Do you see improving passenger service
treatment as an issue, and if so, what do you believe Amtrak should do about it?
Answer. It is a critical issue. It is a Board priority and absolutely essential to any
improvement at Amtrak. Without satisfied, repeat passengers, a national passenger
railroad has no business.
19
Question. Do you have any suggestions as how to increase the quality of customer
services for Amtrak passengers within the financial constraints Amtrak faces?
Answer. The current management reorganization and breakdown of Amtrak
structurally into strategic business units was designed with that in mind. The SBUs
are intended to bring management decisionmaking and responsibility as close as
possible to the customer, thus making Amtrak through each of its employees more
responsive to customers. Amtrak has commissioned both passenger and eniployee
surveys. The results are being incorporated into Amtrak's Dusiness, in an effort to
be as customer service oriented as possible.
Question. Please provide the Committee your views regarding the potential and
feasibility of high-speed rail corridors throughout the country, and whether high-
speed rail operations should be concentrated only in particular regions.
Answer. I understand that there are currently several high-speed rail corridors
in this country, which have been identified as holding great potential for service.
It seems an undertaking that should be entirely feasible, particularly in certain cor-
ridors and if done in a partnership among the federal government, states or regional
authorities, and other entities sucn as Amtrak. The participation of states and local-
ities is crucial, for a number of reasons. Recent laws such as ISTEA establish these
entities as the primary decisionmakers in allocating public resources among trans-
portation modes. These also are the entities most responsive to local transportation
needs.
Addressing the second part of your question, the FRA has designated certain cor-
ridors as likely to support high-speed service, and these are in various geographic
regions of the United States. The assumption is that market forces will dictate that
high-speed rail be concentrated in particular regions with the population density
and inter-city travel demand to warrant such an investment. This does not mean
that high-speed rail will only be concentrated in one geographic area of the country,
but suggests that high-speed rail will be most in demand to connect metropolitan
areas that are generally under 200 miles apart.
Question. What do you see as Amtrak's role in high-speed rail initiatives?
Answer. Amtrak is positioned to be a leader in high-speed rail technology. Am-
trak is about to put high-speed rail on the Northeast corridor, the most heavily trav-
eled corridor in America. This is a tremendous opportunity to showcase cutting edge
technology, to invest in American technology, and to highli^t the benefits of high-
speed rail over competing modes of transportation. The trainsets for the Northeast
Corridor will likely be the high-speed technology into the next century.
The Northeast corridor initiative is an Amtrak/federal partnership. I would like
to see Amtrak build on this exp)erience and its increasing expertise to develop an
array of partnerships, with governmental and business entities, to promote high-
speed rail transportation. Perhaps Amtrak can perform a range of services in the
high-speed rail area, from managing to operating, to respond to all its varied cus-
tomers.
o
ISBN 0-16-046578-8
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60"465789
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