by Wes Vernon
Washington Correspondent
National Corridors Initiative

Big changes could be coming to Amtrak--if one assumes that President Bush's three nominees to the Amtrak board are confirmed, and assuming at least two of them follow the philosophical patterns of the paper trails they have left over the years.

The nomination of the prospective board members was made late Friday, September 12. White House spokesman Allen Abney advised Destination Freedom as of the following mid-week, the names had not yet been sent to the Senate.

Among the nominees, the biggest question mark is Floyd Hall, retired chairman of K-Mart. Supporters of Amtrak, on and off Capitol Hill, are still doing some digging for information on him.

On the other hand, former American Airlines CEO Robert Crandall and former World Bank official Louis Thompson have staked out some interesting positions on transportation. Their views are encouraging to some, although troubling in other precincts.

All three have raised "concern" among Amtrak supporters -- as much for what is not known about the nominees as for what actually is known. That is why even the strongest Amtrak supporters are cautious about the appearance of rushing to judgment.

A very positive reaction comes from Paul Weyrich, himself a member of the Amtrak board for six years in the 1980s and more recently vice-chairman of the now defunct Amtrak Reform Council. His point is that Amtrak now may be getting people on the board that have some experience either in transportation or in industry. Amtrak, after all, is, in fact, a business, even though over the years it may have appeared to be a government agency subject to the bickering befitting a Washington political football.

In a word, the chairman of the Free Congress Foundation rates the nominees as "outstanding."

• The three are unlike any who have served on the board before longtime Washington insider Weyrich told Destination Freedom.
  
• The administration is finally following the law respecting who should be appointed. Amtrak management has never had board members such as these [with long histories of business experience], he said.

Although Edward Wytkind, executive director of the AFL-CIO's Transportation Trades Department (TTD), told the Washington Post the trio appeared to be a stacked deck "against Amtrak, its workers and riders" TTD spokesman Michael Buckley told Desination Freedom a few days later that organized transportation labor had not made a decision as to whether to mount a full-blown battle on Capitol Hill against confirming any or all of the President's choices.

The union chiefs left no doubt they are unhappy with the three nominees. In a statement last Wednesday, the TTD took dead aim at "the White House plan to nominate several individuals to the Amtrak Board of Directors who do not support a strong federal investment" and who "want to use their position to test-out privatization theories at the expense of workers and passengers."

While they were at it, the labor leaders criticized the Bush administration Amtrak plan which the TTD leaders said would "slash service, pass costs to already financially strapped states and launch risky privatization" of the railroad.

The administration plan for Amtrak would get the private sector or state governments more heavily involved in running or paying for the passenger trains, both on the Northeast Corridor and elsewhere in the system. That idea has run into a buzz saw of criticism not only from Amtrak and rail labor, but also from the privately owned freight railroads that host Amtrak operations outside the NEC. They fear that with multiple operators and fragmented responsibility for the passenger trains, the Class I railroads could effectively lose control of their own property...

As to the prospective Amtrak board members, some friends of Amtrak see Thompson as "a privatization fanatic."

Thompson, in some quarters viewed as "a think-tank guy" is said to be
highly skeptical of long distance passenger trains. If research proves that is the case, it could sound alarm bells in Congress where long
distance trains enjoy considerable support from lawmakers whose
constituents in small towns between the coasts often depend on one train a day in each direction.

"Louis S. Thompson offers a number of reasons for separating rail
infrastructure from operations" reads a summary from the World Bank Group.

The stated reasons are: "to reduce unit costs, to create intrarail
competition, to better focus on the services provided, to clarify public policy, and to strike a better balance between the roles of the public and private sectors."

The reported "challenges" to separating operations from infrastructure,
according to the World Bank's summation of Thompson's view, are
"capacity management and pricing policies. While it is true that infrastructure separation is messy and expensive, it will be a small
price to pay if 'fragmentation' offers a better fit for consumers."

For his part, Amtrak CEO David Gunn has described the administration
proposal to separate operations from infrastructure on the Northeast
Corridor as "loony."

The rationale for such separation, as Desination Freedom has noted over the years, is
that highways and airways have separate entities controlling
infrastructure (public sector) and operations (private sector). In fact, that is cited as the core reason why these modes have grown over the
years, while railroading -- bereft of a trust fund such as those enjoyed by their competitors -- has downsized on the freight side and barely
limped along in intercity passenger service. Therefore, why not apply the same separation formula to railroads?

The proposal to do just that on the NEC, as Gunn's statement indicates,
is controversial. Outside the NEC, the idea gets more complicated
because the freight railroads are responsible for both their operations and their infrastructure and they don't want a "trust fund" or anything
that would mess with that arrangement. To paraphrase their argument
would be to say, "If it ain't broke, don't fix it."

Thompson has had extensive railroad experience, including as a leading
staffer at the FRA where he was instrumental in creating NECIP, the
Northeast Corridor Improvement Program that resulted in Amtrak's
acquiring the corridor property that had been owned by bankrupt
railroads and then by Conrail whose main mission was to restore solvent freight rail service to the eastern states. Thompson also played a role in the late 1960s and early 1970s in creating Amtrak in the first place.

Some who have tracked the turns and twists of Amtrak over the years
believe it is possible to overstate Thompson's role with NECIP. That
position, they note, was that of "a banker" and was "his job as an
employee of the FRA" starting in the Carter years and on into the early
Reagan era. He is a Democrat.

Thompson is believed to have what some who have known him will define as
"the deepest reservations about the viability of Amtrak and whether Amtrak should be permitted to exist."

Organized labor is casting a wary eye on nominee Robert Crandall, the
former American Airlines boss who took two major strikes in the 1990s --
the flight attendants during Thanksgiving 1993, and the pilots in 1997.

Specifically, with regard to Crandall, the TTD is "talking with some of
the airline unions that had worked with him" Buckley told Desination Freedom. He also
noted that Floyd Hall's K-Mart "is almost completely non-union."

However, the union spokesman agreed that when Gunn came on board at
Amtrak over a year ago, labor then had some questions about his
reputation for being a tough negotiator with unions in his previous
railroad jobs. Now, labor and Gunn are allies on the issue of restoring Amtrak.

Direct relations with unions are only one part of the picture.

Some of the materials in Crandall's background show him to be a shrewd
businessman. A 1998 broadcast on PBS's "News Hour" recalled that he had
first opposed deregulation of the airlines, but that once it became a reality, he made the best of it and American Airlines grew its volume of
business by leaps and bounds.

"Always worried about the tendency of airlines to price cut themselves
to ruination in the early 1980s" according to the report, "American's outspoken boss was tape recorded -- some would say set up -- by the CEO of
the now defunct Braniff Airlines, who got Crandall to say that if both airlines raised their prices, both would benefit. He was censured by the Justice Department for seeming to broach price fixing."

In the1998 interview, reporter Paul Solman threw the purported quote
back at Crandall who supposedly had said to Braniff boss Paul Putnam, "Raise your GD fares 20 percent, and I'll raise mine. The next morning, you'll make money and I will too."

Crandall later acknowledged that was "one of the more embarrassing
things that I did, and I've said that it was a foolish thing to do."

Though Crandall does not have thick political file in his background, he
did issue a statement supporting President Clinton's highly
controversial economic plan, widely criticize by opponents for its tax hikes and increased spending in 1993.

One pro-Amtrak insider apparently has a grudging respect for Crandall,
saying he is "a proven leader of a major airline transportation company" who someday "might even take over for Mr. Gunn" whenever the latter
decides to call it quits.

Which raises a question: Would Crandall and Gunn make for an explosive
mix? Neither man suffers fools gladly, and neither is known to take
"guff" from anyone.

Would a headstrong Crandall, perhaps along with a Thompson whose known
views are directly opposite of what Gunn says is needed, be just enough to push the Amtrak CEO into throwing up his hands and leaving? Gunn's supporters believe that some Amtrak critics are unfairly holding him
responsible for the missteps of his predecessors -- missteps which they say he has been correcting.

There are concerns to that effect, but there are also those who doubt
that scenario. First, because both men have respected track records in the transportation industry, and their headstrong personalities might develop into a relationship of mutual respect.

Besides, it is noted in some quarters, Gunn is totally dedicated to
making a success of Amtrak. It would take something really huge to push him over the edge. A key part of the success stories of both Gunn and Crandall is their ability to deal with other tough personalities.

There are those who caution against reaching any premature judgments on
the nominees. It is pointed out that David Laney, the new chairman of the Amtrak Board of Directors, who was also appointed by the Bush White House, is getting along well with Amtrak management. From all reports, the people who work with him have a favorable opinion of the onetime
Texas DOT official.

This drama has yet to play itself out, and while there is ample room for
speculation, many are withholding judgment for now.