U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

76–977 PDF 2013

GETTING BACK ON TRACK: A REVIEW OF 

AMTRAK’S STRUCTURAL REORGANIZATION 

(112–110) 

HEARING 

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

NOVEMBER 28, 2012 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

VACANCY 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

Joseph H. Boardman, President and Chief Executive Officer, Amtrak .............. 10 

Ted Alves, Inspector General, Amtrak Office of Inspector General .................... 10 

James A. Stem, Jr., National Legislative Director of the Transportation Division, Sheet Metal, Air, Rail, Transportation Union (United Transportation 

Union) ................................................................................................................... 10 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Hon. Corrine Brown, of Florida .............................................................................. 32 

Hon. Eddie Bernice Johnson, of Texas ................................................................... 35 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Joseph H. Boardman ............................................................................................... 36 

Ted Alves .................................................................................................................. 94 

James A. Stem, Jr. .................................................................................................. 112 

SUBMISSIONS FOR THE RECORD 

Hon. John L. Mica, a Representative in Congress from the State of Florida, 

reference to a slide entitled, ‘‘Cross-Modal Comparison of Federal Subsidies’’ .................................................................................................................... 4 

Joseph H. Boardman, President and Chief Executive Officer, Amtrak: 

Responses to questions from Republican members of the Committee on 

Transportation and Infrastructure .............................................................. 45 

Responses to questions from Hon. Corrine Brown, a Representative in 

Congress from the State of Florida ............................................................. 64 

Ted Alves, Inspector General, Amtrak Office of Inspector General, responses 

to questions from Republican members of the Committee on Transportation 

and Infrastructure ................................................................................................ 108 

James A. Stem, Jr., National Legislative Director of the Transportation Division, Sheet Metal, Air, Rail, Transportation Union (United Transportation 

Union), responses to questions from Hon. Corrine Brown ............................... 116 

iv 


Insert offset folio 1 here 76977.001
v 


Insert offset folio 2 here 76977.002
vi 


Insert offset folio 3 here 76977.003
vii 


Insert offset folio 4 here 76977.004
viii 


Insert offset folio 5 here 76977.005
ix 


Insert offset folio 6 here 76977.006
x 


Insert offset folio 7 here 76977.007
xi 


Insert offset folio 8 here 76977.008
(1) 

GETTING BACK ON TRACK: 

A REVIEW OF AMTRAK’S 

STRUCTURAL REORGANIZATION 

WEDNESDAY, NOVEMBER 28, 2012 

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, WASHINGTON, DC. 

The committee met, pursuant to call, at 10:00 a.m., in room 

2167, Rayburn House Office Building, Hon. John L. Mica (Chairman of the committee) presiding. 

Mr. MICA. Good morning. I would like to call this hearing of the 

House Transportation and Infrastructure Committee to order. We 

are pleased to conduct this full committee hearing on Amtrak, and 

the title of today’s hearing is ‘‘Getting Back on Track: A Review of 

Amtrak’s Structural Reorganization.’’ 

So welcome. We have one panel of witnesses today, and the order 

of business will be that I will start with an opening statement, provide some background, and will yield to Mr. Cummings this morning, and other Members who wish to be heard, and then we will 

turn to our witnesses. We will hear from all of them, then go to 

questions. But pleased to welcome, again, everyone this morning. 

Now, this is one of a number we have actually held, fourth in a 

series of full committee oversight hearings on Amtrak and U.S. 

passenger rail policy in the United States. We actually have two 

more scheduled. One will be on Thursday, December 6th, and that 

will focus on the high-speed and intercity passenger rail grant program, and then we will have the final hearing on this important 

subject, Thursday, the 13th of December, and that will be on the 

Northeast Corridor. 

Ironically, yesterday I was back in New York City actually looking at some of the flood and storm damage, and many of the transportation infrastructure facilities were adversely impacted, a huge 

amount of damage. I have to say how incredible New York City is, 

how resilient its people are, and how well they are coming back. 

I think they have got about 95 percent of their transit operations. 

Rail was particularly hit. Almost all of the East Side Lower Manhattan tunnels flooded, and just think of the massive effort put forward to get those trains running. They probably move about 20 

percent of all the passengers in the world in New York City, and 

a hit like that was incredible, but I understand Mayor Bloomberg, 

who we met with yesterday, will be in town today, and we had discussions yesterday about FEMA, which our committee oversees, 

and also transportation infrastructure that was hurt. That may be 

the subject of additional scrutiny by the committee. 

2 

But today, again, we are focused on looking particularly at Amtrak’s structural organization, and I might also recall that with the 

last hearing that we will be doing on the Northeast Corridor, our 

very first hearing was on January 27, 2011, when I became chair 

of the full committee. We did that in Grand Central Terminal, 

where we focused on the future of high-speed rail in the Northeast 

Corridor, and our last hearing on December 13th will focus on that 

same issue and the progress we have made since that hearing. 

It is kind of interesting how you come about choosing topics for 

some of these hearings, and I have to reflect a moment. A lot of 

people when they go home, maybe they go to bed, maybe they 

count sheep or read a novel. I like to tuck copies of different trade 

publications at my bedside, and I was reading, it had to be after 

August because this is August 2012, Progressive Railroading had 

a great article which featured—well, the title is ‘‘At Long Last, A 

Longer View,’’ and it focuses primarily on passenger rail service 

and Amtrak, and I thought it was quite interesting, particularly 

quite interesting because it outlined some of the work that Amtrak 

had been doing regarding its reorganization, its structural management, and responding to some of the previous studies that called 

for more accountability, more responsibility in the way Amtrak is 

structured, and that led me to say we really need—the committee 

really needed to look at where we are in this whole process and 

where we have been. 

For just a minute to tell you where we have been, we have had 

a GAO study in 2005 that asked for Amtrak to develop a strategic 

plan that could clearly link the organization’s management to overall corporate goals, and Amtrak is a corporation. I was intrigued 

by a comment that Joe Boardman, who is the president and CEO, 

made in this article when he pledged in the article, and I take his 

quote from the article, ‘‘to run this company more as a business 

and less as a Government entity.’’ A quite inspiring goal and something we have been trying to achieve from this committee. So he 

set some of the bar. And again, back to 2005 reviews of Amtrak 

have called for improvement again in its organization and management strategy. 

In 2010, the IG of Amtrak released another report, and as a result of that 2010 report, in November of 2011, Amtrak released 

their 5-year strategic plan with corporate goals and new organization structure, you know, targets that they intend to use to create 

more transparency and accountability. And that is what we will 

focus a great deal on today is where they are in that process, how 

they have come along. We will hear from the head of Amtrak, Mr. 

Boardman, we will hear from the inspector general, and we will 

also hear from a representative of workers and labor and see how 

they assess that progress. 

The plan, the strategic plan that is now underway, hopefully we 

will hear to be fully implemented by next year, we will get an exact 

update again from Mr. Boardman and others. The plan that was 

devised takes Amtrak and organizes it into six business lines, a 

vice president or manager of business, and we will see how that 

has come to pass and how that reorganization is proceeding, and 

the purpose of that is to establish performance goals that are outVerDate Aug 31 2005 13:47 Mar 01, 2013 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-28-~1\76977.TXT JEAN
3 

lined in the strategic plan so that profits and losses can be addressed and also accounted for. 

In the past, Amtrak managers have not, unfortunately, been held 

accountable for what has happened in their departments, and that 

is not my evaluation, it is the evaluation of several of these studies. 

Also in the past, there have been Amtrak-attempted reorganizations without clear goals unfortunately. I hope to better understand 

Amtrak’s strategic plans, its corporate goals, and specific progress 

on its reorganization, and also learn how it will improve performance, accountability, and cost savings. 

I approach this hearing with a very open mind. Amtrak’s strategic plan is very important. I know it requires a transformative 

approach from what they have done in the past. It is not just rearranging the chairs on the deck of the Titanic. We want to make 

certain that there is positive progress. 

From a fiscal standpoint, and everybody is focused on the fiscal 

cliff, and sometimes people give me a hard time for focusing on 

Amtrak, but we have this past year, put $1.4 billion into Amtrak 

in Government subsidies, almost half a billion in operating subsidies and close to a billion on some of the capital improvements, 

and over the years that commitment has remained pretty much the 

same, so we do have a responsibility with taxpayer dollars to make 

certain that this operation, which is highly subsidized, and we did 

do a hearing on that, I guess one of the past four hearings we did. 

Maybe they could put that up on the board, is the Cross-Modal 

Comparison of Federal Subsidies. Rode Amtrak yesterday, the average cost of my ticket coming back from New York, Governmentsubsidized, the average cost of $46.33. 

[The information follows:] 

4 


Insert offset folio 9 here 76977.009
5 

Fortunately, and I read through the report pretty carefully, Amtrak has made some progress in Acela so the loss isn’t that great 

for Acela, but this is the average ticket subsidy, simply by taking 

the 29 million passengers or 28 if it was last year and dividing it 

by the underwriting subsidy. Other modes of city buses, 10 cents; 

mass transit, 95 cents; aviation, $4.28, and that was highlighted in 

a hearing that we—a previous hearing that we did. So we are trying to bring that subsidization for the system down. 

Let me say in closing, I went through the inspector general’s report last night, and I do want to hear at least the report that he 

is giving, and I am not sure how much of this he will address, but 

seven of the nine board members in PRIIA, we had some reorganization of the board of directors, but we now have seven of the 

nine board members on board. I also want to know about key personnel. We talked about hiring vice presidents and managers over 

some of these sectors, and that is mentioned in the inspector general’s report. 

Finally, the comment that the inspector general made that the 

company is clearly in the early stages of implementing many of 

these restructuring initiatives, and he further said that recent 

work shows the sustaining and effectively implementing these initiatives has the potential to significantly reduce Amtrak’s reliance 

on Federal support, and that is the goal of this, it is not just to 

beat up Amtrak, although sometimes we do become very harsh critics when money is lost, or we see lack of progress in some areas, 

but our goal is to reduce the Federal reliance on Federal support, 

and that is one of the objectives of this hearing in addition to finding the specifics on the progress of their structural organization 

and reorganization. 

I will introduce our witnesses shortly, but let me yield to Mr. 

Cummings, who is serving as ranking member at this point. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman, and it is 

certainly my pleasure to be here. I want to thank you for calling 

this hearing. 

Mr. Chairman, quite often our Federal employees are unseen, 

unnoticed, unappreciated, and unapplauded. In my capacity as the 

ranking member of the Oversight and Government Reform Committee, I have heard so much criticism of our Federal employees 

and Government employees in general, and I want to take a moment here before I even start to thank Joyce Rose for her 25 years 

of public service on behalf of this committee and on behalf of this 

side of the aisle, and I know all of us feel this way. 

[Applause.] 

Mr. CUMMINGS. This is Joyce’s, more than likely her last, it is 

her last hearing, and she has always worked fairly with all of our 

Members, and with our staff on this side, she has done everything 

in her power to make sure that not only that the Congress is 

served well, but that the country is served well, and so we hate to 

lose her, but we know, as someone said to me, Joyce, and I listened 

to this in a sermon by T.D. Jakes not too long ago, he said his son 

came to him, his son is a singer, and he was about to go off to college, and his son said, Daddy, you know, I am not sure this is the 

thing for me, you know. Singers may not make a lot of money, it 

may not be the right thing for me. And his father went up to him, 

6 

and he said, Son, if it is not the thing, it is the thing that will lead 

you to the thing. 

And so this has been, this Transportation Committee has been 

a part of your journey, and we hope that it has been one that has 

been most meaningful, and we really thank God for allowing your 

destiny to lead you to us and for our destiny to lead us to you. And 

so we wish you well in your new endeavors as the president, that 

is quite a—I mean, you went from staff person to president—of Operation Lifesaver, which has the important mission of educating 

the public on grade crossing safety. May God bless you, and thank 

you so much for your service. 

Mr. MICA. Will the gentleman yield? 

Mr. CUMMINGS. Of course. 

[Applause.] 

Mr. MICA. If the gentleman will yield for just a second. 

Mr. CUMMINGS. Of course, Mr. Chairman. 

Mr. MICA. Again, there is probably no higher tribute than to 

have the other side of the aisle lead with the praise of your service 

to the committee, to the Congress, and to the country. Mr. 

Cummings and I know that you cannot be successful in our position without great staff, and certainly you have worked long and 

hard, 12 years for the committee, 25 years in Congress, a quarter 

of a century of commitment to public service. I don’t think there 

is anyone that deals with the rail or transit issues in the Nation 

that doesn’t know of Joyce Rose and her commitment to helping everyone. 

We hadn’t passed a passenger rail reauthorization in 11 years, 

I was the ranking member, and Joyce worked with myself, Mr. 

Oberstar, and we had great cooperation from both sides of the 

aisle, we passed the legislation called PRIIA, Passenger Rail Investment and Improvement Act of 2008, for passenger rail, which 

is right now the guideline we go by in the authorization, but if it 

wasn’t for her dedication, commitment, and incredible knowledge— 

I just think of the knowledge that will be lost when she leaves her 

position—we couldn’t have achieved that. 

So, Joyce, on behalf of the majority side, which we have had the 

privilege to have you working with us, and again, from Mr. 

Cummings and the minority side, we are just eternally grateful, 

and we are paying a little special tribute to you today, and thanks 

again for your service. God bless you. 

Ms. ROSE. Thank you. 

Mr. MICA. Mr. Cummings, thank you for yielding. 

Mr. CUMMINGS. So, Mr. Chairman, I thank you for scheduling today’s hearing. Following the release in 2005 by the GAO of a report 

entitled Amtrak Management Systemic Problems Require Actions 

to Improve Efficiency, Effectiveness, and Accountability, that was 

the name of the report, I was asked by then-Ranking Member 

Oberstar to serve as the lead Democrat on a special working group 

convened by this committee to evaluate that report’s findings and 

make recommendations on subsequent action. 

Certainly, Amtrak was facing challenges at that time, but among 

other observations, the Democratic Members of the working group 

noted in our view that Amtrak ‘‘faces difficulties in implementing 

7 

long-range strategic plans because of great uncertainty regarding 

its Federal funding each year.’’ 

During that era, Amtrak faced repeated proposals to cut or eliminate the Federal funding provided to it. Obviously, that made it 

difficult for Amtrak’s leadership to focus solely on operating the 

company or on developing long-term goals and performance benchmarks. We hear a lot in the Congress about uncertainty. So subsequently under Chairman Oberstar’s leadership, Congress enacted 

the Passenger Rail Investment and Improvement Act, and recommitted to the value of the service Amtrak provides. This commitment was expanded by President Obama and the Congress through 

the American Recovery and Reinvestment Act, which provided 

funding to begin many of the capital projects that had been tabled 

due to years of inadequate Federal funding. 

It is clear that the investments we have made in Amtrak are 

supported by the traveling public. Fiscal year 2012 Amtrak 

achieved the highest ridership levels in its history. That is major 

news. Major. More than 31 million passengers took Amtrak in this 

fiscal year, and the service appears poised to continue to grow. 

Against this record of success, and my colleagues on the other 

side of the aisle believe Amtrak needs to get back on track, as the 

title of this hearing suggests, it is only because they have once 

again been doing all they could do to try to derail the service. In 

fact, the Republican Presidential platform called explicitly for Amtrak’s elimination. 

Fortunately, that misguided platform was resoundingly rejected 

by the American people, who have instead supported the President’s call to move forward by implementing policies that will expand investments in our Nation and support our continued economic recovery. The assault on Amtrak needs to end so that this 

company can stay on track and focus on its core mission of serving 

our Nation’s mobility needs as safely, securely, and efficiently as 

possible. 

I am very encouraged by the actions Mr. Boardman has taken to 

develop a strategic plan and to introduce an organizational structure that supports implementation of that plan and increases accountability at all levels of the organization. I might note that 

when the chairman was talking about subsidies, Mr. Boardman, I 

don’t think it included Amtrak’s commuter rail passengers. The actual subsidy is about $5 per passenger. 

I would ask that in your opening statement, you address that so 

we will be clear on what that subsidy is. I don’t want any confusion 

about that because I don’t want people watching this to think that 

it is something that it is not. 

That said, while we must conduct a thorough oversight over Amtrak as the overall entities receiving Federal funding, our committee has now held seven hearings at the full and subcommittee 

levels in the 112th Congress on Amtrak, and today, we are convening to examine a strategic plan that has not even been fully implemented. Appropriate oversight does not require micromanagement of all fashions of an entity’s operations. Thus, while I look 

forward to the testimony of today’s witnesses, I hope we will use 

this hearing to identify ways we can support the continued success 

8 

of Amtrak, enable it to grow to meet the increased passenger demands. 

We should also seek ways to support continued implementation 

of the reforms Mr. Boardman has proposed, and give him and his 

leadership team the space they need to fully implement their plans 

rather than require them to return to the Hill every few weeks. 

So with that, Mr. Chairman, I yield back and I want to thank 

you for yielding. 

Mr. MICA. Thank the gentleman. Are there others who—anyone 

on this side? Ms. Napolitano? 

Mrs. NAPOLITANO. She was first. 

Mr. MICA. OK, Ms. Richardson. 

Ms. RICHARDSON. First of all, I would like to thank Chairman 

Mica and Ranking Members Brown and Cummings for holding this 

hearing today which focuses on Amtrak’s structural reorganization. 

It is noted that Amtrak has a record of 30.2 million passengers 

traveling on Amtrak in full year 2011, and with that, more than 

300 daily trains that connect 46 States, including the District of 

Columbia and Canada, and additionally operates intercity trains in 

partnership with 15 States and contracts with 13 commuter rail 

agencies to provide a variety of services. 

At times, this committee has been critical on the way Amtrak operates trains across this great country, but if Amtrak were truly as 

bad as some of the hearings have suggested, we would have seen 

headlines like, ‘‘Amtrak Has Record Low Ridership.’’ In fact, that 

is completely the opposite. Instead, Amtrak’s ridership is booming 

this year, with 11 consecutive monthly ridership records. In each 

month of this current fiscal year, Amtrak has posted the highest 

ridership total ever for that particular month, with the final month 

of September also expected to be a new record. In addition, in July 

was the single best ridership month in the history of Amtrak. 

Unfortunately, the recently passed transportation reauthorization bill, MAP–21, rail title was noticeably absent in its final form 

despite many of our efforts here on this committee. The suggestion 

before this committee is that no Federal funds to Amtrak would be 

allowed to pursue any legal action in court, a 25 percent cut in 

funding, and even more alarming, not having a vision for highspeed rail network. 

These possible legislative actions are detrimental to the transportation opportunities for all Americans. The alternative to build 

more roads, buy more cars, and consume more oil should not be our 

only solution. In fact, according to DOT, in comparison, in 1958 

through 2012 the United States has invested $1.4 trillion in our 

Nation’s highways, $538 billion in aviation, $266 billion in transit, 

and yet Amtrak, which was created in 1971, has received a small 

fraction of that funding at $41 billion. 

When you consider that and compare it to the oil and gas industry, which has received roughly $41 billion in Federal subsidies, or 

more than half of those subsidies have been available to the energy 

sector. We have spent, to bring that together, we spent more in 1 

year with the oil and gas and energy companies in their industry 

than we have spent in the entire life of the program of Amtrak. 

Clearly there seems to be an imbalance, and it is not one that 

should be continued. 

9 

Regarding the vision of high-speed rail, the Amtrak Acela service 

is one of those alternatives, and though it may only achieve the 

speeds of an average of 83 miles per hour along the NEC, surely 

that is significantly better than the long delays and crawling major 

interstate systems that we have. This committee should continue 

the role, as it always has, to facilitate the development of critical 

infrastructure and the continuation of one of America’s greatest assets, and that is passenger rail. 

I want to thank all of the witnesses before the committee today, 

and I look forward to hearing your testimony about how the reorganization of Amtrak can make it an even greater service to the 

American public. With that, I yield back. 

Mr. MICA. Thank the gentlelady. Recognize Ms. Napolitano. 

Mrs. NAPOLITANO. Thank you, Mr. Chairman, and may I associate myself with the remarks from Ms. Richardson, but I especially want to thank Congresswoman Ranking Member Brown and 

Elijah Cummings for bringing this issue along with you. 

Amtrak is extremely important to California. We have three of 

the top five busiest corridors are in our California area. Two of 

them are supported totally by the State, but Pacific Surfliner, 2.8 

million, is not. I see that there are some cuts coming through, and 

I am going to be looking at that very closely because it has a 2.8 

million ridership. All three are State-supported services program, 

and as has been stated, the vitality must be supported for the 

State-supported services program. Same advice to the States to 

work with Amtrak to provide passenger rail service that complements the national network. It is important to all States, especially California, we are a donor State, because it gives more options to commuters and many intercity travelers while reducing 

highway congestion and pollution. California has been at the forefront of reduction of pollution in cars and several other areas, and 

we continue to look for ways to be able to get people out of cars 

and into public transportation. 

The California Transportation Commission, they are voicing their 

opinion on—I talked to Transportation Secretary Brian Kelly, Deputy Secretary Brian Annis, and rail division manager Bill Bronte 

on how they view Amtrak’s work with California and Caltrans. 

They are concerned with the changes to the State-supported services program in section 209 of the Passenger Rail Investment and 

Improvement Act, the PRIIA, because that forces the State of California to pay $20 million that are going to be taken out of that 

budget for them, operating losses on that Pacific Surfliner. It runs 

along the border of my area, which right now is the Alameda Corridor East that is the train transportation that brings in 40 to 50 

percent of the Nation’s goods to the rest of the Nation. We are 

watching the reorganization of Amtrak, making sure it doesn’t 

hinder any State partnerships. These are critical because they are 

the ones who will, in the end, work with the local communities to 

ensure that we get more people to utilize it. 

We are pleased that the reorg has created an executive level position of general manager. I look forward to meeting that individual 

and working with him. It is a very positive step since the States 

provide 50 percent of the revenues to Amtrak. We must have a senior Amtrak level position to work with States on their programs, 

10 

and this is especially important, section 209 of PRIIA negatively 

impacts States, especially in California. 

I also wanted to add my 2 cents to Ranking Member Elijah 

Cummings’ statement on the employees who run Amtrak. They 

have done a beautiful job. I hope they will continue, and we will 

continue to work with them to ensure that not only do they provide 

good service, but that they also are recognized for the work they 

do for our ridership. 

So with that, I yield back the balance of my time, and I thank 

the chair. 

Mr. MICA. Thank the gentlelady. Ms. Johnson? 

Ms. JOHNSON OF TEXAS. Thank you very much, Mr. Chairman, 

and Ranking Member. My remarks will be very brief. In October 

2005, GAO issued a report to then-Chairman Young concerning 

Amtrak’s lack of a strategic plan, and the report identified that 

without a comprehensive corporate mission, Amtrak’s business 

practices were lacking and could not ensure consistent and improved corporate performance. 

In August of 2010, the Amtrak Inspector General’s Office released an evaluation report of Amtrak’s strategic planning and set 

forth key elements necessary for an effective strategic planning 

process. The IG’s report formed the basis for Amtrak’s November 

2011 strategic plan for fiscal year 2011 to 2015. While the reorganization is not yet fully complete, there appears to be significant 

performance and accountability improvements, and I look forward 

to the testimony. It seems to me that they are doing exactly as we 

have desired. Thank you, and I yield back. 

Mr. MICA. I thank the gentlelady. Others seek recognition? If 

not, what we will do is turn now to our three witnesses and welcome them again. Our first witness, and I will recognize him at 

this time, is the president and CEO of Amtrak, Mr. Joe Boardman. 

Thank you. Welcome, and you are recognized. 

TESTIMONY OF JOSEPH H. BOARDMAN, PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, AMTRAK; TED ALVES, INSPECTOR GENERAL, AMTRAK OFFICE OF INSPECTOR GENERAL; 

AND JAMES A. STEM, JR., NATIONAL LEGISLATIVE DIRECTOR OF THE TRANSPORTATION DIVISION, SHEET METAL, 

AIR, RAIL, TRANSPORTATION UNION (UNITED TRANSPORTATION UNION) 

Mr. BOARDMAN. Thank you, Mr. Chairman, Mr. Cummings, 

Members. I appreciate being here today, and Joyce, I will be on 

your board, so the questions will come from me for the future for 

OLI, but I am glad that you are there. You will bring the energy 

to a very important problem of safety for railroads, and I appreciate the work that you have done here. 

Angela Cotey, who is sitting over in the corner, Mr. Chairman, 

who is the one who wrote that article, and I have already blamed 

her for this hearing this morning. She has already asked me for 

another interview, and I understand now no good deed goes 

unpunished in this process. 

What I would like to really start with and talk about this morning is that I have been an Amtrak customer as a State Commissioner of Transportation, and even before that, and I was thinking 

11 

about this in my own company. I used Amtrak as the backbone of 

what we provided in transportation to the social service agencies 

where we had contracts because part of the high cost for social 

service agencies was to transport, especially a long distance. For 

example, in New York, from the central part of the State to Buffalo 

to the Cancer Center, instead of using an ambulance or a very high 

cost, we would transfer people to Amtrak at Utica or Rome or Syracuse in some way to get to the Buffalo center. And so Amtrak was, 

right to begin with, the answer to part of the reduction in cost savings that the Federal Government is interested in, and the State 

governments are interested in across the country and also contributes, then, to Amtrak’s revenue as a result of that. 

So as a customer, I am focused on customers, and what is it that 

a customer really needs to ride Amtrak or any other service for the 

future? And so when you look at a transformation of a major corporation, which Amtrak is, you really had to spend a lot more time 

in the diagnosis than you did in the execution. 

So what you saw for the first year or two was looking at Amtrak 

as an organization first, how do they do their jobs and should they 

be done differently for the future? And what you found was in a 

lot of the past reorganizations a lot of box moving in the organizations, but not a lot of understanding of what the women and men 

at Amtrak really accomplished to deliver the services that we were 

really looking for. 

So some things were good and some weren’t, but now we have 

some results of what we are doing, and we have made some of 

these changes on an incremental basis as we have gone along. For 

example, we knew that a foundation of this had to be why the heck 

didn’t Amtrak have any labor contract agreements for over 8 years, 

and why did we have that kind of a culture at Amtrak? 

My perspective was that you needed to bring that group of people 

together in a very different way for the future. So the reorganization began almost immediately in terms of understanding the 

strength of this agency was in its men and women, the work that 

they did and how they worked with us or with management or not 

with management, and you needed a way to get in there, and the 

common thread of what a customer wants and what an employer 

wants and what an employee wants is safety. And so we went in 

under the basis of a Safe-2-Safer program, which was a different 

way of looking at safety than the railroad industry had looked at 

generally in the past, and the way I have learned about that was 

from Federal employees. Those Federal employees were part of the 

Federal Railroad Administration, and they saw that the level of 

safety got to a certain place and didn’t go any lower. We had to 

change the way we were looking at safety. There has been that recognition, just in the past year by the freight industry as well. It 

is different than the structure of today, based on awards for safety, 

because what we really need is a behavioral-based safety program, 

which is what Amtrak now has in Safe-2-Safer. But it also brought 

together people to work in collaboration to resolve problems. You 

couldn’t resolve problems in Amtrak without that kind of collaboration with the women and men that did that work. 

Amtrak recorded its ninth ridership record in the last 10 years, 

and we have actually reduced our operating subsidy. And there is 

12 

a difference in our view of operating subsidy and capital subsidy, 

because Amtrak, in its first iteration in 1971, was taking over the 

money-losing passenger railroad system from the private freight industry. It did not include the Northeast Corridor then. It only included the long-distance trains across this Nation, and Congress 

contemplated, as did the Executive side at that time, that subsidies 

would be needed, although they expected that there would be some 

way that a profit would be made. The freight railroads were relieved of a great responsibility, but it wasn’t until 1976 that you 

really got the Northeast Corridor and you had a different structure 

at that point in time. 

And, Mr. Cummings, to address what you asked early on, when 

you really look at operating assistance, we cover 79 percent of our 

fare box in the company as a whole, but on the Northeast Corridor, 

we cover more than 100 percent of our operating costs. We use part 

of that revenue to go back to subsidize the long-distance trains because we know that the long-distance trains are an integral part 

of our network of mobility across this country. 

So, in fact, there is not a subsidy to a passenger on the Amtrak 

corridor except when you add capital assistance. I understand that 

the need for capital assistance is so great on the Northeast Corridor that that subsidy need will continue for a long time. This was 

recently exposed in the storm Sandy, where we lost one of our substations because we didn’t make the investment, we as a Nation, 

as a region didn’t make the investment to make sure that the 

water didn’t come into that substation and end the ability for us 

to have the full level of service into the Penn Station in New York 

City. The tunnel flood gates were so old, and were scheduled to be 

addressed as a part of the ARC program and are now scheduled to 

be done as part of the Gateway program. That is a discussion that 

this body needs to have for the future about how do we make those 

investments in infrastructure, and I am hearing that today in 

many areas. 

So, really, a subsidized operating cost is really about the longdistance trains, where the business model doesn’t work at the same 

level of service that there is along the Northeast Corridor, and the 

need to connect that service. 

But we had to be careful coming in to reorganize Amtrak. You 

had to find out, and whether it was the GAO report or whether it 

was the IG report, we followed the IG structure in terms of developing a strategic plan. There is no question about that. And I think 

that Mr. Alves will say that in this process, and when we did that, 

we knew other elements of this had to occur as the GAO pointed 

out in its metrics. 

One of the things that I feel that I brought to this process related 

to most of my career, going into failing bus systems and bringing 

them back, and delivering a different structure across the country 

for passenger transportation. While rail is a little bit different, it 

is still very similar in many ways. It is not about the boxes. It is 

about understanding what it is that we have to get done and then 

making sure that we are able to measure, have goals, that they are 

clear, and that we can measure them to see if they are successful. 

Broadly, we see that in ridership. Broadly, we see that in reducing Federal funds. But our goals need to be much more specific so 

13 

that we can hold ourselves accountable and our employees accountable for what needs to be done to improve service to the customer 

because the customer is the major focus of what this company 

needs to be all about. It is not about moving trains. It is about 

moving people, and that is the foundation, and the people that you 

move have to be people that feel that they are fairly dealt with 

within the company. 

So the foundation of what that is about in our reorganization is 

a commitment to the values, the integrity, the spirit of service, the 

desire to improve respect, entrepreneurial spirit, humility, knowing 

that while we have heroic acts, we don’t have heroes. We need everybody, woman and man, to deliver what we are really looking for. 

It isn’t about the CEO, it isn’t about the union leader. It is about 

all that work in a collaborative fashion. And then we finally need— 

not finally, but perhaps sometimes first of all—forgiveness in the 

process. Because what you are looking for are people making decisions, and they have to make them every single day, and sometimes they don’t make the right one, and they need to be forgiven 

when they have done it in the best way that they can and then 

learn from that for the future, and that is what we look for is that 

learning. I don’t have a time clock here in front of me, it is not 

working. 

Mr. MICA. We gave you double so far. 

Mr. BOARDMAN. So I can step back and answer questions for the 

future. We do have a strategic plan. We do have an organizational 

process. It is different than it was in the past. It is a matrix organization rather than a siloed organization, and it isn’t complete. In 

some ways, as I listened to folks, I said it is never going to be completely complete because things change. 

For example, I am not so sure right this minute that we will hire 

a general manager of commuter services, because our commuter 

service has gone down. That has been the subject of a previous 

hearing. That may not be the best way to deliver that service for 

the future. We may rethink that, and that is one position we have 

not filled at this time. We have filled the general manager for longdistance, we have filled the general manager for the Northeast, we 

have filled the general manager for State-supported services, and 

I will stop, Mr. Chairman. 

Mr. MICA. Thank you. 

We will get back to you on questions. You have covered a wide 

range of what we are interested in hearing about, but we will turn 

now to the inspector general, Mr. Alves. You are welcome, and the 

inspector general of Amtrak, it is good to have you here and back 

again. Thank you. 

Mr. ALVES. Thank you, Mr. Chairman. Good morning, Chairman 

Mica, Mr. Cummings, and members of the committee. Thank you 

for the opportunity to discuss how our reports have supported or 

complemented Amtrak’s ongoing efforts to operate more effectively 

by focusing on customers and the bottom line. In line with the 

hearing’s focus on Amtrak’s ongoing reorganization, my testimony 

will center on reports related to improving Amtrak’s operational 

and financial performance. 

Before I address those reports, I would like to highlight the fact 

that our work generally supports ongoing Amtrak improvement iniVerDate Aug 31 2005 13:47 Mar 01, 2013 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-28-~1\76977.TXT JEAN
14 

tiatives. Over the last couple of years both the board of directors 

and Amtrak management have been focused on improving Amtrak’s operational, financial, and customer service performance. 

To illustrate, because the board now has seven of the nine members authorized by PRIIA, it has been able to reconstitute two important board committees, the audit and finance committee and the 

personnel committee. This has helped the board to provide stronger 

oversight of management activities. Similarly, Amtrak management has taken key actions, including issuing a strategic plan that 

meets best practice guidelines and provides a roadmap to help Amtrak become more focused on customers and the bottom line. The 

reorganization initiative that is the focus of today’s hearing is directly linked to the strategic plan’s commitment to organize around 

lines of business. 

Turning to our reports, generally, Amtrak has taken positive action on our recommendations. For example, our August 2010 report 

found that although Amtrak had made various attempts to develop 

a strategic plan, none had been successful. The need for Amtrak to 

have a meaningful strategic plan was first identified in a 2005 

GAO report. We recommended that Amtrak develop a strategic 

plan utilizing a process that incorporates best practices for strategic planning. Amtrak agreed, and the plan was issued in October 

2011. 

Amtrak’s board of directors also requested that we review Amtrak’s risk management processes. Our March 2012 report showed 

that Amtrak did not have a systematic, enterprisewide framework 

for identifying, analyzing, and managing risks. The board chairman 

and the president and CEO responded that once they understood 

the commitment required, they would provide guidance to management about Amtrak’s plans to implement a risk management 

framework. We have discussed our views on the way forward with 

the board and understand that the board is in the process of determining how it will address this issue. 

Starting in 2009, we issued a series of reports on human capital 

management. Our July 2011 report found that only limited 

progress had been made in implementing our prior recommendations. In response, Mr. Boardman agreed to make improved human 

capital management a priority. Since then, Amtrak hired a new 

chief human capital officer, and he has developed and is implementing an action plan to address our recommendations. 

We also issued two reports on Amtrak’s food and beverage program. In September 2012, we reported that food and beverage activities were being carried out by two departments, and their activities were not well coordinated. Management agreed to consolidate the two, and did so on October 1, 2012. 

Since 1995, we have issued a series of reports identifying more 

than $83 million in overpayments on inaccurate invoices from host 

railroads. Amtrak agreed to improve its invoice review process and 

has done so. In addition, this year Amtrak recovered over $20 million of overpayments we had previously identified. 

In conclusion, the company is focused on operating more like a 

profit-making business. It is in the early stages of implementing 

many of these improvement initiatives, and we believe that susVerDate Aug 31 2005 13:47 Mar 01, 2013 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-28-~1\76977.TXT JEAN
15 

taining these initiatives over the long term and effectively implementing them will be the key to success. 

Mr. Chairman, this concludes my testimony, and I would be glad 

to answer any questions that you or other members of the committee may have. 

Mr. MICA. Thank you, and we will hold questions. 

We are going to now recognize Mr. James Stem, and he represents the United Transportation Union’s workers, and we are 

very pleased to have him back and also look forward to his testimony. You are welcome and recognized, Mr. Stem. 

Mr. STEM. Thank you, Mr. Chairman and Ranking Member 

Cummings. We appreciate the opportunity to testify. There are 

about 19,000 Amtrak workers, and I, today, am bringing you their 

message. UTU represents about 3300 career professional Amtrak 

employees. I would also like to revise my remarks by adding the 

fact that I had the personal opportunity to work in rail passenger 

service for a railroad during the 5 years preceding the creation of 

Amtrak. I witnessed firsthand the decline of the equipment, the 

services that were there, the attempts by the railroads to get out 

of that business because liability was a major concern, and it was 

a money-losing prospect. I also had the opportunity to work on Amtrak trains during the next 10 years following the creation of Amtrak, and was embarrassed at the shape of the equipment that Amtrak inherited when they first started this process. So Mr. 

Boardman clearly identified this has been a major issue. 

I would like to continue my remarks by pointing out that labor 

doesn’t have expertise in business organizations. Our members are 

normally on the other end of that. Our interaction with Amtrak 

has been very positive in the creation of that plan. We have had 

no complaints from the field about Amtrak’s reorganization, and we 

support this effort and commend Amtrak in modernizing their operations. We also commend Amtrak for applying modern technology 

in managing the resources that Amtrak has and their personnel. 

Now that Amtrak is not operating from day to day in a survival 

mode with constant threats to its very existence, we are confident 

this well-planned organization will focus Amtrak’s assets and workers in areas where the best improvements in service will happen. 

Our Amtrak members are a part of the transportation team who 

operate trains, moving passengers to their destinations safely and 

on time. This activity requires simultaneous coordination with 

every aspect of the operation from mechanical inspections and repairs to maintenance and repairs to tracks and signals, to the positioning and cleaning of the equipment and dispatching of intercity 

and commuter trains to multiple destinations in many directions. 

Making changes in one area of operations is not a simple issue 

because it also requires changes in other areas to ensure continuity. Eliminating and consolidating layers of management responsibility in this organization plan, in our view, is a very productive move. We are encouraged that Amtrak made reductions in 

management last year, and their new reorganization plan proposes 

to reassign even more management positions. Amtrak should earn 

the support of Congress for this upgrade in their organizational 

structure. Amtrak operates with safety and customer service woven 

together as top priorities. Our operating crews fully understand 

16 

that safety comes first, and on-time performance is the goal. This 

upgrade of operations furthers these priorities and positions Amtrak to meet the demand for significant increases in rail passenger 

service. Amtrak operating crews are among the most productive 

workers in this system. Every Amtrak employee should be placed 

in a productive position that supports the needs of customer service 

and the managed growth of our operations. Our members are ready 

and eager to work. Congress asked Amtrak to share a plan on how 

to improve services and reduce the travel times between our major 

population centers. The next generation plan provides a roadmap 

for that improvement and identified the funding requirements. 

Amtrak’s ridership set a record last year, as Mr. Cummings and 

Mr. Boardman indicated, and with an aging population, higher gasoline prices, and the total instability of fuel resources, highway and 

aviation congestion, millions of more travelers will choose to ride 

the train if the service is available and dependable. 

Amtrak workers are prepared and well trained to provide services to our customers, but for us to succeed, Congress must provide 

Amtrak with consistent and predictable multiyear funding for modernization and capacity upgrades. Beyond reorganization, what 

Amtrak really needs is dramatic increases in capital investments. 

Amtrak’s next generation plan for the Northeast Corridor is outstanding. It will cut the transit time in half between Washington 

and New York as well as between New York and Boston. Capital 

spending to increase speeds and upgrade Amtrak’s infrastructure is 

the ticket to transporting Americans in a cost-effective and energy 

efficient manner. 

We in labor are Amtrak’s partners. We urge this committee to 

allow Amtrak the latitude to reorganize if they so see the need, but 

more importantly to authorize substantial amounts of additional 

funds for Amtrak’s capital needs. 

Amtrak also plays a central role in financing our railroad retirement system, which is a self-funded pension that this committee in 

2000 and 2001 reformed. Changes in the Federal treatment of Amtrak, such as significant funding cuts or passenger rail privatization, could jeopardize the solvency of our railroad retirement system that affects 270,000 career railroad employees around the 

country. Americans want a national intercity rail passenger network, and Amtrak is uniquely able to fill that need. Highways and 

commercial aviation will not alone meet the Nation’s future passenger transportation needs. 

The coordination of air and rail passenger services should be 

mandated to free more air slots and provide timely rail services for 

shorter travel distances in 300-mile ranges. A modern, efficient, 

intercity rail passenger system is a necessary part of a balanced 

transportation system. Congress should recognize that intercity rail 

passenger service requires public subsidies, just as our airline and 

bus partners also. Many airline executives are on record today supporting the coordination of air and rail services to increase the capacity of our existing airports. 

I also want to make sure this committee is aware of our full support for the expansion of our freight rail capacity as well. Amtrak 

and our freight railroads work together as partners. Both have capacity needs that can be mutual goals. We support the expansion 

17 

of Amtrak’s services and understand that this expansion also must 

address the capacity needs of our freight rail partners. I will be 

happy to answer any questions. 

Mr. MICA. Well, thank you, and thank you for your testimony. 

We share your commitment to making certain that Amtrak employees, particularly those long-serving, are treated fairly as we move 

forward, and also that we meet our obligations as far as their commitments, retirement, pension benefits and other items. I think we 

have always advocated that. Thank you for your leadership on 

issues, Mr. Stem. 

Representing labor, I think Mr. Boardman had said that it was 

8 years that Amtrak did not have a labor agreement in place. Is 

that correct? And I think you will recall at the time that I felt that 

that was uncalled for. But that was the case, wasn’t it? 

Mr. BOARDMAN. Yes, sir, that was the case. 

Mr. MICA. And I didn’t find that case with their brothers and sisters, union members in the freight systems, and that is why I 

thought Government-supported service, such as Amtrak, should be 

held to a higher standard, and I think also the unions actually had 

to go to court to get relief. But that is not the way to run a railroad 

or a passenger rail system. So I think history in that regard speaks 

for itself. 

Mr. Boardman, when did you submit the 5-year strategic plan? 

Mr. BOARDMAN. It was approved in, I think, October of 2011. 

Mr. MICA. OK. Well, I point out that now I have the greatest respect for the opinion of the ranking member. Sometimes the other 

side accuses me of micromanaging. I don’t consider my role as 

micromanaging when in 2005 GAO said they should have a strategic plan. In 2010 the IG also, Mr. Alves, didn’t you also say they 

should have a strategic plan and there wasn’t one? Is that correct? 

Mr. ALVES. Yes. 

Mr. MICA. It was. And then for the record, in 2011, I think I became chairman that year, Mr. Boardman did come forward with a 

strategic plan in I have November, you said October, but that was 

correct. So sometimes that role is one of oversight, also one of prodding, also one of making sure that what should be in place—I come 

from a business background. If this is a corporation which is subsidized heavily by public support, the very least they can do is have 

a business plan, and that plan should be flexible. 

Let’s take the inspector general’s report and look at again the 

implementation of a strategic plan. Let me preface my remarks by 

saying that there is no one who is a stronger supporter of passenger rail service in the United States than this guy right here. 

It is cost-effective. I am a fiscal conservative. You can move more 

people for less. As far as the environment, energy, it is absolute 

winner. But we have to do it with the least amount of subsidy. And 

god forbid there should be a profit in some of these operations, but 

we could actually I think achieve that if we worked together on it. 

So let’s take the report together. First of all, the board of directors, in PRIIA we had organizational problems from the very top, 

the board. I was very pleased preceding this hearing, and I asked 

the question before, we went to a nine-member board and seven 

members of the board had been appointed. Two Democrat appointees were lacking. Yesterday, I am told, was it yesterday the 

18 

White House submitted these two nominees and I am pleased to 

see that, and I hope the Senate acts with due speed and everyone 

helps get the full complement of the board in place. Sometimes it 

takes a hearing to get action, whether it is implementation of a 

strategic plan or highlighting that the board should be filled. And 

maybe they did that of their own volition, but I am very pleased 

that it was done. 

All right, let’s look at the key folks in place, and you divide it 

into six divisions. I am very pleased to hear what you said about 

possibly not going forward with some of the commuter activities in 

the organization plan, at least from hiring additional personnel in 

that area. 

We also find that, talking about ridership, Mr. Boardman, the 

highest percentage of increase in ridership is in State-supported 

routes, is that correct? 

Mr. BOARDMAN. Yes. 

Mr. MICA. OK. And next year, according to PRIIA—it is next 

year, isn’t it, Joyce—that the States will now have to step up to 

the plate and pay full support. That is correct, Mr. Boardman? 

Mr. BOARDMAN. Under section 209, yes. 

Mr. MICA. Yes. Under 209, right. And that actually will help your bottom line pretty dramatically. It is about $100 million a year, 

some of the calculations in that range, is that correct? 

Mr. BOARDMAN. I think, yes, that is within the range. I think it 

might be a little different than that, but yes. 

Mr. MICA. I notice Mr. Joe McHugh sits behind you with a 

smiley face, was quoted in this article to say it is important to help 

States make the case for Amtrak so legislatures will invest in that. 

And that is one reason we want to hold your feet to the fire, to 

make your passenger rail service and the cooperative effort with 

the States attractive, and looking forward to working with you. But 

again we have a change in that activity and we will have to see 

how that evolved. 

The other positions, are they all full, the vice president and managers, Mr. Boardman? 

Mr. BOARDMAN. General managers; one of them is a vice president, that is the Northeast Corridor infrastructure and development, Stephen Gardner. 

Mr. MICA. Yes, and he will be in here I think when we do the 

Northeast Corridor. We want to hear his report. 

Mr. BOARDMAN. I don’t know whether I will send him or not. 

Mr. MICA. I would love to have him. 

Mr. BOARDMAN. I understand that, Mr. Chairman. 

Mr. MICA. We will just subpoena him as a last act. 

Mr. BOARDMAN. I have to control everything he says, Mr. Chairman. No, I am kidding. And I have to now wipe the smile off Joe 

McHugh’s face, is that what I need to do here? 

Mr. MICA. He didn’t have a smile. 

Mr. BOARDMAN. OK. But we have moved forward I think in the 

business lines. But the other piece of this, which had I not been 

so long-winded on other parts of what I said earlier, is really the 

matrix part of this. And we have a structure of chiefs—chief mechanical officer, chief engineer, chief safety officer—and they set 

the standards and the budgets necessary for the business line 

19 

chiefs to carry out. In that way, you have not just a customer focus, 

but also a bottom line focus, and there is the expertise that is there 

necessary for us to make improvements in mechanical maintenance 

and improvements in safety and improvements in all the things 

that are needed to support these general managers to get their jobs 

done. Some of them are filled. Some of them are posted and they 

will also be finished off in this organization. 

Mr. MICA. OK. Again, I look at the areas where we are losing 

money, or you will be losing—you may be losing some opportunities 

in providing some service and State-supported service. 

Another area that the inspector general highlighted and has been 

of interest to the committee, we did a hearing on it, is the food 

service, and you have addressed some changes in that and improving some of the controls. 

What was the recommendation, Mr. Alves, I can’t find it here in 

the report, was it a consolidation of the two activities overseeing 

food service? 

Mr. ALVES. Yes, part of the food service was provided or overseen 

in the Transportation Department, which is part of the Operations 

Department. The commissary and food delivery function was overseen in the marketing department. And what we found was that 

they weren’t coordinating fully. 

Mr. MICA. Has that been implemented, that recommendation, 

Mr. Boardman? 

Mr. BOARDMAN. Yes. 

Mr. MICA. OK. And, you know, again, I am not micromanaging, but if you are losing $79 million on food service with a captive audience 3 years ago, and that increases to $84.5 million this past 

year, you have a problem. Now, yesterday I did not order anything 

on Amtrak so I saved the taxpayers money as far as buying—purchasing food. But it is a problem. We want in the structural reorganization or organization the recommendations if they make sense 

and they can be effective that are recommended by the inspector 

general implemented. So it appears that that is being addressed. 

Finally, let me address again a part of the report. It is talking 

about again Acela and some of the Amtrak services. It says, in contrast, availability and reliability remain the same or declined 

slightly for the remainder of Amtrak’s equipment. Compared with 

Acela’s train set availability, there is an improvement of 14 percent. The availability of the rest of Amtrak’s equipment has stayed 

roughly the same compared with Acela’s reliability improvement of 

11 percent, and the rest of Amtrak’s equipment is on average less 

reliable than before. 

That is a concern. Mr. Boardman—— 

Mr. BOARDMAN. Yes, I can address that. We agree that it is getting older and therefore it is becoming more unreliable now in 

some ways. We have ordered new electric locomotives on the Northeast Corridor to make substantial improvement. 

Reliability-centered maintenance we think is an excellent way to 

go. It is something that has helped us a lot with the Acela fleet. 

That is our premium service and certainly we want to maximize its 

use. 

If we use the same plan with the rest of the company right now 

in the same way, we would probably be talking 600 to 700 more 

20 

employees. And so we don’t see the balance yet that we need to increase the revenues necessary to pay for that, compared to where 

we are right now with the reliability. We really looked at that premium service differently because the fares were so much higher in 

that process. 

Mr. MICA. OK. I didn’t mention this before, but out of the report, 

just for the record, Amtrak’s food and beverage service has incurred a direct operating loss of over $526 million in the last 6 

years. A half a billion is not chump change, and just want that in 

the record. 

Mr. BOARDMAN. I think we had it in the last record, but, yes, I 

understand. 

Mr. MICA. Finally, also as recommended, and this is also from 

the report, the vice president of operations has agreed that Amtrak 

will develop a 5-year plan for reducing its direct operating losses. 

Mr. Boardman, can you shed some light on that? 

Mr. BOARDMAN. Well, it goes back to the entire structure of what 

we are trying to do in terms of accountability. And one of the issues 

at Amtrak early on was the lack of accountability and lack of even 

understanding of what a budget was and the management of a 

budget that people had available to them. 

And so a lot of the strategic plan comes out in how are you going 

to measure the metrics and what are your goals. How do you get 

organizational excellence and what are you looking for in terms of 

financial excellence, in terms of maximizing revenue, optimizing 

our operating ratio, doing the normal business things that we need 

to get done, and holding each one of those folks accountable to a 

performance measurement system personally in their operation to 

get that done? So that is really the structure that the VP for operations and the whole company will begin to really do. 

We saw early on, and I compliment Ted for recommending the 

commissary, but that was something we saw that we needed to 

change quite early. The problem is you have to operate the railroad 

while you are making these changes, so you have to be prepared 

to make the change in a way that makes sense and you have to 

have it tied in together to the rest of the structure. So we did that. 

And I think Ted and I talked about that early on, those kinds of 

things need to happen. We are still doing that as we are finding 

ways to make those improvements. 

Mr. MICA. Thank you. For the record, General, will note that 

Amtrak is now taking all credit cards, at least on the Acela train 

that I was on, which is something you had recommended. We 

hadn’t gotten implemented, but Mr. Boardman has made progress 

on that. And also they advise you to get a receipt from the cafe too. 

So you are making good progress. 

Let me yield on that tone to Mr. Cummings. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. 

To Mr. Boardman, I want you to be real clear, and I know you 

are, but I want to make it real clear that on both sides of the aisle 

we want effectiveness and efficiency. And it does no one any good, 

including the employees, if we are not zeroing in on effectiveness 

and efficiency. And I assume from your comments that that is what 

you have been trying to do. 

21 

But let me just go to this area, and I want you to listen to me 

very carefully, Mr. Inspector General, on this issue, because you 

raised it. 

When you tell me that in a year you were able to recover over $20 million in overpayments, I got to tell you that sends all kinds 

of whistles going on in my head. The first question is, why do we 

have the overpayments? 

The second question is, you know, when you are talking about 

strategic plan and organization, there must be somebody who is responsible for making those overpayments, in other words, somebody in charge. And what have we done to address that? How 

much is still out there? Because I can tell you what happens up 

here is that if somebody has got something against you, they will 

take stuff like that and do some damage, and rightfully so. I mean, 

it is like setting yourself up. 

So help me with this. Talk about these overpayments and talk 

about—I mean, does the strategic plan say we project that we may 

have X amount of overpayments. 

And you are talking about measurements, Mr. Boardman. Does 

the strategic plan then say we will recover X? Because that means 

that somebody has got some money that they are not supposed to 

have, and that is money that we could be using to address our 

issues here. Go ahead. 

Mr. ALVES. Thank you. I would like to provide some background 

on this issue. It had been a longstanding issue within Amtrak 

going back to when Amtrak was formed. This unit which paid the 

invoices from host railroads for Amtrak operating over their track, 

there really was no billing review process. For years the company 

relied on the inspector general to come in after the fact, years after 

the fact, and reconstruct the payments and identify overpayments. 

I think in 2008 or so we recommended that as a basic business 

process that the company should have to review a bill before they 

pay it. The company agreed and they worked aggressively and hard 

to implement an improved billing review process. 

The second issue that we had is that the billing review was in 

the same group that was structuring the agreements with the host 

railroads and we thought that was too close and there needed to 

be a separation of duties. So we also recommended that that billing 

review process be separated from the group that is negotiating and 

working with the host railroads. The company agreed to that as 

well. 

It took a couple of years probably, and these things do take time, 

for the company to put that structure in place, develop processes 

and policies and work guides. But at this point the function is in 

existence and the group is reviewing railroad bills as they come in 

and before they are paid. So we think that the problem—— 

Mr. CUMMINGS. So are you saying that you think we have 

stopped the hemorrhaging—— 

Mr. ALVES. Yes. 

Mr. CUMMINGS [continuing]. And now we need to sort of go backwards and see what we may have lost. I mean, is that a fair statement? 

Mr. ALVES. What we are doing is we are finishing up the last of 

our railroad billing review audits. We have covered most of the 

22 

large amounts of money that are out there, and I think about the 

end of the year we will issue the final audit reports, and at that 

point we are going to turn everything over to the company. I am 

not sure that it is cost-effective at this point to go back, you know, 

5 or 10 years and try and recover small amounts of money. So we 

think that we are covering the bulk of the money in our audit reports and the company can move forward productively from here. 

Mr. CUMMINGS. Just one quick thing to you, Mr. Boardman. I 

just want you to talk about, you made a big deal, you spent a lot 

of your time talking about safety, and, you know, you talk about— 

and I want to know what you mean by that. You were saying that 

when you went and you tried to do your review you figured out 

that the thing was safety and you kept saying safety. What does 

that mean? 

Mr. BOARDMAN. Well, it means that the system itself, if you don’t 

have a safe transportation system, whether it is a bus system, 

aviation system, rail system, you won’t have customers, because 

they won’t trust the ability to get on the train and be safe, that 

you are not going to have accidents, that you are not going to 

have—— 

Mr. CUMMINGS. This is what I want, what you are saying right 

now. This is what I want to hear right now. Come on. 

Mr. BOARDMAN. That you have well-trained employees; that they 

know what to do in an emergency; that we are capable of handling 

our passengers in a very safe, efficient manner. 

Mr. CUMMINGS. And passengers were worried about that, is that 

what you were saying? 

Mr. BOARDMAN. They could be, if we began to have those kinds 

of problems, and there are those areas and pockets where that existed, but it was also among employees. So it is not just the passenger, it is also the employees. 

Mr. CUMMINGS. Thank you, Mr. Chairman. 

Mr. HANNA. [presiding.] Anyone else have any questions? Go 

ahead, Mr. Bucshon. 

Dr. BUCSHON. Thank you. 

Mr. Boardman, I am going to ask a fundamental question. Can 

a passenger rail line in this country be profitable? 

Mr. BOARDMAN. Our Northeast Corridor is profitable, the way we 

operate it, in terms of the operating costs itself. 

Dr. BUCSHON. And now as a Nation, across the country, if you 

add on the rest of what Amtrak does across the country, I mean, 

is it possible to be profitable in your view? 

Mr. BOARDMAN. No, not without a policy decision by Congress, 

which is lacking here. 

Dr. BUCSHON. What decision would that be? 

Mr. BOARDMAN. Whether the Congress believes whether a basic 

transportation network in this Nation is necessary. They decided 

that in 1971—— 

Dr. BUCSHON. Right. 

Mr. BOARDMAN [continuing]. And they have decided it several 

other times. But there needs to be a decision, just like there is a 

decision every day that we are going to invest in a highway system 

or an aviation system. For example, you have 50,000 employees of 

DOT that are focused on aviation and there is only 60,000 people 

23 

in DOT. So Congress has a lot to decide about what it wants in 

passenger rail across the Nation. 

Dr. BUCSHON. So basically, though, passenger rail on its own 

without Government subsidization, it is not possible to be profitable. 

Mr. BOARDMAN. Even the curbside buses, which are made a lot 

of today, without the subsidization of being able to pick up on the 

curb and not sustain all the overhead costs, not having to pay for 

the capital and the highways, could not be profitable. However, 

they are now, and fortunately here in Washington we have moved 

them into the terminal. 

So the answer is yes, there is no mode of passenger transportation, including aviation, that can be profitable only from the 

fares. 

Dr. BUCSHON. Yes, that makes sense to me. 

Mr. Alves, you made a comment that said Amtrak needs to be 

run, and I think this is basically what you said, more like a profitable business. I mean, Amtrak was set up 40 years ago to be a 

profitable business, so it has taken us 40 years. What did you 

mean by that, for example, running more like a business and less 

like a Government agency? Are there specific things that need to 

be done? I mean, I know you have got the strategic plan and I understand that, but when people always say that, they say that all 

the time, we need to run Government more like a business or Government needs to run more like a business. I mean, that is a statement that can be made, but it seems like there is a lot of smart 

people that are working on this issue and it has taken 40 years and 

we are still arguing over the same points. 

Mr. ALVES. It has taken a long time. And Amtrak actually is a 

business. It is not a Government agency and does not, I don’t 

think, operate as a Government agency. It operates as a business. 

I think the focus here—— 

Dr. BUCSHON. In that respect, it does. But it operates like a Government, because when we lose money, that doesn’t matter. 

Mr. ALVES. Amtrak relies on the Government for—— 

Dr. BUCSHON. That just gets paid off by Congress, right? 

Mr. ALVES. Amtrak relies on the Government for its existence 

and survival from the subsidy, both operating and capital subsidy. 

I think what is different now is that there is a focus within the 

company at the leadership levels, the board of directors and Joe 

Boardman, on making the company operate as efficiently as it can 

and focus on the customer. 

This idea of delineating different customers and moving to lines 

of business and developing accountability mechanisms is really focused on the bottom line. And I think that is what has been significantly missing in the past. The past focus was on running the 

trains. We can run the trains, but can we do it as efficiently as we 

possibly can? I think that the new focus is driven by the strategic 

plan, and it is driven by the whole concept of organizing around 

lines of business and holding people accountable for achieving a 

goal, and that goal is in the future going to be much more focused 

on the bottom line and financial performance. That is my sense of 

what is happening in Amtrak. 

24 

Dr. BUCSHON. Thank you for that. I guess my sense is that from 

a congressional standpoint that there should be some financial 

pressures on Amtrak from Congress. Otherwise, we would never 

have any of the things that you are all trying to do to streamline 

the operation. I mean, I think the impression that we should always open-endedly fund things or increase funding to this agency 

or that agency or subsidize this organization or that organization 

without some degree of financial pressure for efficiency, safety and 

other things, is something I think that we need to avoid. 

So obviously Congress wants to make sure you have the amount 

of money that you need to run your organization, but also there 

needs to be some financial pressure on an organization to be more 

efficient, and it sounds like what you are doing is just hopefully 

going to be very successful. 

Thank you. I yield back. 

Mr. HANNA. The gentleman yields back. 

Ms. Norton. 

Ms. NORTON. Thank you very much, Mr. Chairman. 

This is a question for Mr. Alves and for Mr. Boardman. 

Mr. Alves, in your inspector general’s report, there is a troubling 

section on human capital management in which you have found, 

and I am quoting you now, ‘‘only limited progress’’ in implementing 

your recommendations, your human capital recommendations. And 

the most troubling sentence is the one that says, ‘‘In addition, Amtrak was increasingly at risk of encountering skills shortages as 

highly experienced long-time employees retire.’’ 

First I want to know where the gaps are when we are talking 

about safety and risk, and then I really have to ask Mr. Boardman, 

what is so difficult about creating training programs perhaps for 

employees that are already at Amtrak so that people who are already trained could train to the next level and replace those who 

are retiring. 

I need to know more about the skills shortage risk, how serious 

it is and what can be done about it. And I might say in the short 

term as people experience—as there is some downsizing, for example, from the Congress, you may find more people retiring. Could 

I have a response on that? 

Mr. ALVES. Yes. What we found was that Amtrak human capital 

management was very focused on transaction type things—making 

the payroll this month, processing the payroll, adjusting people’s 

job description—and wasn’t really looking at strategic issues. 

Human capital practices have evolved over the last 20 years. 

Human capital management is now considered a strategic issue 

that drives performance in the company. We issued a report, and 

it didn’t get a lot of traction in the company, we did a followup, and 

Mr. Boardman reacted positively and made it a priority. 

The idea of losing skilled people is fairly common. It is a concern 

now throughout the country that older employees are retiring. You 

have to have new people coming in. They have to be the right people, they have to be trained and developed, and they have to be 

properly rewarded. And there wasn’t a strategic focus on those 

issues at Amtrak. 

Since Mr. Boardman made that a priority, Amtrak now has a 

new human capital officer. And one thing that Mr. Boardman diVerDate Aug 31 2005 13:47 Mar 01, 2013 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-28-~1\76977.TXT JEAN
25 

rected him to do was that within 3 months he wanted a plan to 

address those strategic issues. That plan was delivered. There has 

been a lot of work on it, and we meet periodically and get briefed 

on the progress and I think things are underway to correct those 

deficiencies. And I will let Joe talk to the details. 

Mr. BOARDMAN. It is really not all that hard. The problem is everything is a priority. It is a priority to resolve union issues and 

have labor contracts. It is a priority to have internal controls. It is 

a priority to replace equipment. We didn’t have a fleet plan in place 

until now. 

Ms. NORTON. Let me stop you for a second, Mr. Boardman. Yours 

is a labor-centric business. 

Mr. BOARDMAN. Yes, ma’am. 

Ms. NORTON. No matter how you look at it. And we are not talking necessarily about, surely to some extent, but brand new people 

who would have to be trained. You have got people. There is surely 

a job ladder in your business. 

And my question is very specific, and that is about training, as 

mentioned in the report, training, much of which would probably 

have been done on the job anyway if you are dealing with your own 

employees who want to move up. Why aren’t there such training 

programs in place or are such training programs planned before 

you have a wholesale exodus of trained employees from Amtrak? 

Mr. BOARDMAN. We are training. We are training now. A lot of 

what you have read is old news, and I think that the inspector general was relating to that. We have got a major change in how we 

manage human capital, and we have a regular training program 

that improves operating services. I think a lot of the—— 

Ms. NORTON. Including training people to move into spots that 

will be vacated by retirement? 

Mr. BOARDMAN. Well, they are not all in place yet, and they will 

be. 

Ms. NORTON. I just want to know the plan. 

Mr. BOARDMAN. Yes. 

Ms. NORTON. So that would be training, much of it for people 

who are already on the job who might move up? 

Mr. BOARDMAN. Some of them will be trained. There will be succession plans for folks. We are in the middle of that now. That is 

part of this process. This is very early to have a hearing on what 

we have tried to accomplish in our strategic plan that we are moving forward with. 

Ms. NORTON. Mr. Boardman, just might I suggest that, and especially in light of my next question, because you could see retirements the likes of which you haven’t planned for. 

Mr. BOARDMAN. One of them could be mine. But I understand. 

Ms. NORTON. I certainly didn’t mean you. 

Mr. BOARDMAN. Well, I am going to be 65 next month. 

Ms. NORTON. Oh, do you have to leave at 65? 

Mr. BOARDMAN. No, I am just saying. 

Ms. NORTON. You better start succession planning right away. 

But in light of the fact that your business cannot proceed without 

trained people without putting those of us who board your trains 

at risk, as you listed your priorities, I can only ask, and we realize 

we are important, given the fact that you already have a very well 

26 

trained workforce, you do not have the kinds of accidents and the 

like that grab the headlines every other day, we would like to keep 

it that way and even improve it. So I am only asking that training, 

particularly of people who are on board, because that is already a 

trained workforce, proceed. 

I do have to ask about your reorganization when you are taking 

your line businesses, and I understand the transparency there and 

I think it is good business practice. But Amtrak received about $1.5 

billion, roughly speaking, in Federal funds, and about half a million of that was even for operations. 

Now, the Budget Control Act, or the 2013 budget, I asked staff 

to get me the number, has a $116 million cut in it and it could be 

worse. If we don’t go over the cliff, and I have to assume we are 

not insane and that we are not going over the cliff, there could be 

even deeper cuts as we sit and try to reconcile the differences 

among us. 

Does this cut then imperil any of your plans and does your strategic plan take into account that you are likely to see cuts rather 

than increases over the next several years? 

Mr. BOARDMAN. Well, yes, it does, in part at least. We are making improvements in efficiency by using new technologies. We have 

had an ability to have a voluntary retirement program. We have 

had some RIFs, reduction in force in certain areas in the company 

and tried to place them other places. 

Ms. NORTON. I hope those voluntary retirements do not mean 

you shed the very skilled parts of your workforce—— 

Mr. BOARDMAN. Most of them, they were all in the nonagreement 

areas, so they were not the labor force agreement force. They were 

all in the management area. There are about 3,000 employees that 

are outside the union construct here. So, in many ways, it wasn’t 

just moving, for example, the commissary over to the operating side 

of things to make it more efficient, it was also looking at what is 

it that Marketing is really doing. They are doing their work the 

same way now as they used to, for example with travel agents, 

which has changed substantially from what it was in the past. 

Those kinds of things we are looking at as well. So, yes, in part 

the kinds of changes that we are making in the strategic plan do 

help in that area. 

Ms. NORTON. Mr. Chairman, if you could indulge me for one 

short question here. 

You know, Mr. Boardman, that I have been particularly complimentary of your plan, not your strategic plan, your plan to bring 

high-speed rail, to redo Union Station. It is a very ambitious, very 

21st-century plan. Does the strategic plan take into account Amtrak’s overhaul of Union Station and of its operations in the long 

run for high-speed rail? 

Mr. BOARDMAN. Well, yes, it does, and the way that it does that 

is in the infrastructure and investment development business line 

that we have been talking about, the one that Stephen Gardner is 

the vice president of. Because what we really looked at and asked 

is, what is one of the most important assets in the United States? 

And that is the Northeast Corridor, from Boston to Washington, 

and Virginia I think would like to move it right on to Richmond 

27 

and south. In the structure that we are dealing with, it has real 

estate potential, it has high-speed rail potential. 

It supports 40 million people within 40 miles of that corridor, 

and we need to change how it is done. If you look at Union Station 

today, and I know you know it well, you see many vendors that are 

there providing services with spaces that all used to be dedicated 

to passengers. We need to recreate the space for passengers, because they are coming, and this high-speed rail will be coming. 

Whether I and my team are talented enough to make that happen, 

someone will make that happen for the future, because that is the 

most efficient way to move people in such a dense corridor as the 

Northeast. 

Ms. NORTON. Thank you very much, Mr. Boardman. 

Thank you, Mr. Chairman. 

Mr. HANNA. You are welcome. Thank you. 

Ms. Johnson, would you—— 

Ms. JOHNSON OF TEXAS. I have no questions. 

Mr. HANNA. There is no one on our side. I have a couple of questions. 

Incidentally, Mr. Boardman, it is a pleasure to see you. 

Mr. BOARDMAN. Thank you. 

Mr. HANNA. Knowing that you are from Rome and knowing that 

you went to Binghamton University, which I now have the pleasure 

of representing. Thank you. 

Mr. BOARDMAN. Congratulations on your reelection. 

Mr. HANNA. Thank you. It is a mixed bag, but thank you. 

Mr. Alves, you mentioned that in the long-term plan there are 

benchmarks, to paraphrase what you said, which require accountability if they are not met. What does that mean in the real world? 

Mr. ALVES. Well, actually what I was saying is that it is not so 

much that the plan has the benchmarks and accountability, it is 

that this entire process, starting with the plan, should lead to that. 

Amtrak is not there yet. The company is not at a place where people are being appropriately held accountable to valid metrics. 

Mr. HANNA. What would you imagine that is, though? I mean, 

accountability in the public sector is difficult to require, it is difficult to understand, to pin down since there is not a profit motive 

and there are not necessarily stockholders, have no vested interest 

in outcomes, other than doing a good job, which I would hope that 

they all would. What would you imagine that looks like? 

Mr. ALVES. Well, Amtrak has established, and I think that I will 

take a shot at it, but Joe will be able to answer it much more precisely and on target than I can. 

Amtrak has established two key metrics. One is the operating 

ratio, which is how Amtrak’s revenue compares to its expenses. 

Amtrak’s operating ratio is less than 1 because we lose money. And 

the goal is to bring it up. 

A second incorporates capital into that. So how much capital does 

Amtrak use to generate revenue against its expenses? They are 

like bottom line really excellent goals. 

What has to happen, though, is that the accountability part is 

that everybody has a role to play, and their role is aimed at accomplishing Amtrak’s strategic goals and contributing to those metrics. 

And they are then measured against how well they contribute 

28 

against that metric. And so there is a much more important focus 

on the bottom line. 

As I said, Amtrak is in the very early stages. And these changes 

are going to take a while to take place. 

Mr. HANNA. In terms of hard accountability, it is difficult to attain and difficult to enforce and very difficult to define. 

Mr. ALVES. It may be difficult, but it needs to be done. 

Mr. HANNA. Exactly. Go ahead, Mr. Boardman. 

Mr. BOARDMAN. I don’t think it is so difficult, Congressman. I 

think one of the things that is important here is—and I think Ted 

really talked about it—is the total operating expense over the total 

operating revenue. 

What we are really looking for are these general managers to 

really understand how much revenue is coming in and what their 

cost is, and that they can be held to account for. Because we have 

a history. We know what those numbers are. 

But we also have a performance plan for every specific individual, and we are calling it the SMART program. You know, you 

got to have an acronym to really talk about that. And that their 

goals need to be specific, they need to be measurable, they need to 

be achievable, realistic, and then they need to have a date on them 

which provides the time. 

And they won’t be perfect. They will be improving as we go forward. Each year we have made a lot of improvements in that area 

because humans need that time to really assimilate what it is that 

we really want them to do and what we need to do to protect. 

We have had very weak internal controls, I think, as Mr. Alves 

has talked about, and we have had a very weak business process. 

And the reason for that is because for years it has been a survival 

mode, that we survive this year and are we going to survive into 

next year? And that has begun to change at Amtrak, I hope. And 

I just celebrated my fourth anniversary 2 days ago here at Amtrak. 

So the changes that are coming about I think are very business related. 

Mr. HANNA. So I can tell the public not to send you a bill right 

now because you actually do look at them? 

Mr. BOARDMAN. Yes. 

Mr. HANNA. That is incredible on its face. 

Mr. BOARDMAN. Part of the difficulty here is understanding the 

level and number of transactions along the route of the train each 

day, which is part of what Ted was talking about, is whether a 

train was late at a certain location or not and whether there was 

an incentive paid to a freight railroad as a result of that. 

Mr. HANNA. You can understand some of the cynicism—— 

Mr. BOARDMAN. Absolutely. 

Mr. HANNA [continuing]. That comes out of this Congress over 

Amtrak when you look at that, especially knowing that aviation is 

subsidized by a little over $4, mass transit is a little over 95 cents, 

intercity bus, which you know a great deal about, is a dime, and 

Amtrak in total, understanding what you said earlier, is about a 

little over $46. That is a substantial subsidy. Obviously the four 

modes of transportation are different. 

But I want to ask Mr. Cummings if you have anything. 

29 

Mr. CUMMINGS. Yes, I certainly do. Thank you. I will be very 

brief, though. 

Mr. Boardman, I just want to ask you about Baltimore. Our 

mayor, our train station in Baltimore, I was listening to your answer to Ms. Norton, and we want to know what the situation is 

with the Baltimore station. You know, the mayor had appointed me 

to chair a commission here recently to try to address the issue of 

the Baltimore station. I see your staff, they look like they are confused. 

Mr. BOARDMAN. Well, let me just address it quickly. What I will 

do is give you a written response because I am not really up to 

speed on that. 

Mr. CUMMINGS. Yes, please do. And that is OK, I am not worried 

about you being up to speed. I just want to make sure that it is 

on the radar, because we are very concerned about it. Baltimore is 

a major city and the train station is one that we are not happy 

about. We want people to feel a sense of vitality in our city. We 

have a mayor who is doing a great job. But that train station is 

very central, as it is in most cities. I don’t know if you have been 

through there. 

Mr. BOARDMAN. Absolutely. I go regularly. 

Mr. CUMMINGS. It is not the prettiest picture. So I am just curious. I mean, you may have a general statement on that or you may 

have a specific statement. 

Mr. BOARDMAN. Well, I mean, I was looking at the second floor 

there. 

Mr. CUMMINGS. Yes, the second floor. 

Mr. BOARDMAN. They used to have the power director’s office up 

on the top floor and the second floor. And we looked at what would 

it a take for us to be potentially using that differently. 

So, yes, we are there. We are looking at it. I don’t have the specifics on what our plans are right this minute, but I understand 

your concern. 

Mr. CUMMINGS. If possible, I would like to set up a meeting with 

your people so that we can at least make sure we are at least singing from the same hymn book and the same church on the same 

day. 

Mr. BOARDMAN. Yes, sir. 

Mr. CUMMINGS. So we can get some kind of—you know, I think 

it is just something that concerns us greatly. We just want to know 

where Amtrak is fitting in there and what your plans are, OK? 

Mr. BOARDMAN. Yes, sir. 

Mr. CUMMINGS. Thank you. 

Mr. MICA. [presiding.] Thank you. Other Members have questions? No other questions. 

Well, let me just as we conclude thank our witnesses. The purpose of this hearing and the two that we are planning is hopefully 

to be constructive, to make certain that things move forward in a 

positive fashion as far as Amtrak. Taxpayers have a huge amount 

of interest in this, $1.4 billion, as I said, last year, billions of dollars over the 40 years that we have subsidized the Amtrak operation. 

30 

Almost all public transportation is subsidized in some fashion. 

May not be able to eliminate that, but we can lessen it, as was 

stated by the goal of actually the Amtrak president, Mr. Boardman. 

We are trying to make certain that we have as efficient an operation, well organized, with a strategic plan. Others had the opportunity to move forward with a strategic plan prior to my becoming 

chairman; it didn’t happen. It is now happening now, and we want 

it to be constructed and also executed so that we have in place the 

very best practices, best structure, and one that can be flexible to 

change, to market requirements, to customer demands, and to also 

make certain that our employees who serve us and work hard each 

day for Amtrak are adequately rewarded. 

We will, as I said, have two additional hearings, Thursday the 

6th of December on high-speed and intercity passenger rail service 

grant program. That is the overall high-speed program which has 

been advocated by the administration. And then on Thursday the 

13th we will conclude the series on passenger rail service with an 

examination of the progress we are making on the Northeast Corridor and high-speed rail. 

Yesterday in New York one of the transportation officials said 

that it was a shame that the United States appears to be falling 

further behind in its efforts to build a high-speed rail system, particularly in the Northeast Corridor, which has the highest concentration of population, the best connections in the United States. 

And we will examine very carefully the progress that is being 

made, the plans that Amtrak has put in place to bring the Northeast Corridor into the 21st century of world-class high-speed transportation. 

I think the gentlelady from California, Ms. Richardson, said that 

the speed of Acela is 83 miles per hour. Maybe, Mr. Boardman, is 

it 86 miles an hour on average, just for the record? Somewhere between 83 and 86. And I think it is in the high sixties going from 

New York to Boston, which just is not acceptable. 

So the purpose of the hearings again are not only to deal with 

the consumer, as Mr. Boardman talked about, but also the taxpayers. And having been home during the Thanksgiving period and 

to several cities during the Thanksgiving period, I saw hundreds, 

literally thousands of Americans working so hard to pay their bills, 

raise their families, be responsible citizens. And they also send a 

good portion of their labor, sweat and tears to Washington and we 

have to be responsible stewards and trustees of their hard-earned 

dollars. And that is what we intend to do until we call the very last 

hearing to order. 

So, with that, if there are no other questions from members of 

the committee, let me just do a little homework here. I ask unanimous consent that the record of today’s hearing remain open until 

such time as our witnesses have provided answers to any questions 

that may be submitted to them in writing. We will give it 2 weeks 

with the consent of the other side of the aisle. And I ask unanimous consent that the record remain open for those 14 days for additional comments and information submitted by Members or witnesses that can be included and will be included in the record of 

today’s hearing. Without objection, so ordered. 

31 

Again, I want to thank our witnesses. We look forward to working with you, Mr. Boardman. Thank you for your fine efforts today, 

Mr. Alves, our respected inspector general, Mr. Stem, representing 

our workers. Thank you so much. 

There being no further business before the Transportation and 

Infrastructure Committee, this hearing is adjourned. Thank you. 

[Whereupon, at 11:52 a.m., the committee was adjourned.] 

32 


Insert offset folio 10 here 76977.010
33 


Insert offset folio 11 here 76977.011
34 


Insert offset folio 12 here 76977.012
35 


Insert offset folio 13 here 76977.013
36 


Insert offset folio 14 here 76977.014
37 


Insert offset folio 15 here 76977.015
38 


Insert offset folio 16 here 76977.016
39 


Insert offset folio 17 here 76977.017
40 


Insert offset folio 18 here 76977.018
41 


Insert offset folio 19 here 76977.019
42 


Insert offset folio 20 here 76977.020
43 


Insert offset folio 21 here 76977.021
44 


Insert offset folio 22 here 76977.022
45 


Insert offset folio 23 here 76977.023
46 


Insert offset folio 24 here 76977.024
47 


Insert offset folio 25 here 76977.025
48 


Insert offset folio 81 here 76977.081
49 


Insert offset folio 82 here 76977.082
50 


Insert offset folio 83 here 76977.083
51 


Insert offset folio 84 here 76977.084
52 


Insert offset folio 85 here 76977.085
53 


Insert offset folio 86 here 76977.086
54 


Insert offset folio 87 here 76977.087
55 


Insert offset folio 88 here 76977.088
56 


Insert offset folio 89 here 76977.089
57 


Insert offset folio 90 here 76977.090
58 


Insert offset folio 91 here 76977.091
59 


Insert offset folio 92 here 76977.092
60 


Insert offset folio 93 here 76977.093
61 


Insert offset folio 94 here 76977.094
62 


Insert offset folio 95 here 76977.095
63 


Insert offset folio 96 here 76977.096
64 


Insert offset folio 26 here 76977.026
65 


Insert offset folio 27 here 76977.027
66 


Insert offset folio 28 here 76977.028
67 


Insert offset folio 29 here 76977.029
68 


Insert offset folio 30 here 76977.030
69 


Insert offset folio 31 here 76977.031
70 


Insert offset folio 32 here 76977.032
71 


Insert offset folio 33 here 76977.033
72 


Insert offset folio 34 here 76977.034
73 


Insert offset folio 35 here 76977.035
74 


Insert offset folio 36 here 76977.036
75 


Insert offset folio 37 here 76977.037
76 


Insert offset folio 38 here 76977.038
77 


Insert offset folio 39 here 76977.039
78 


Insert offset folio 40 here 76977.040
79 


Insert offset folio 41 here 76977.041
80 


Insert offset folio 42 here 76977.042
81 


Insert offset folio 43 here 76977.043
82 


Insert offset folio 44 here 76977.044
83 


Insert offset folio 45 here 76977.045
84 


Insert offset folio 46 here 76977.046
85 


Insert offset folio 47 here 76977.047
86 


Insert offset folio 48 here 76977.048
87 


Insert offset folio 49 here 76977.049
88 


Insert offset folio 50 here 76977.050
89 


Insert offset folio 51 here 76977.051
90 


Insert offset folio 52 here 76977.052
91 


Insert offset folio 53 here 76977.053
92 


Insert offset folio 54 here 76977.054
93 


Insert offset folio 55 here 76977.055
94 


Insert offset folio 56 here 76977.056
95 


Insert offset folio 57 here 76977.057
96 


Insert offset folio 58 here 76977.058
97 


Insert offset folio 59 here 76977.059
98 


Insert offset folio 60 here 76977.060
99 


Insert offset folio 61 here 76977.061
100 


Insert offset folio 62 here 76977.062
101 


Insert offset folio 63 here 76977.063
102 


Insert offset folio 64 here 76977.064
103 


Insert offset folio 65 here 76977.065
104 


Insert offset folio 66 here 76977.066
105 


Insert offset folio 67 here 76977.067
106 


Insert offset folio 68 here 76977.068
107 


Insert offset folio 69 here 76977.069
108 


Insert offset folio 70 here 76977.070
109 


Insert offset folio 71 here 76977.071
110 


Insert offset folio 72 here 76977.072
111 


Insert offset folio 73 here 76977.073
112 


Insert offset folio 74 here 76977.074
113 


Insert offset folio 75 here 76977.075
114 


Insert offset folio 76 here 76977.076
115 


Insert offset folio 77 here 76977.077
116 


Insert offset folio 78 here 76977.078
117 


Insert offset folio 79 here 76977.079
118 

Æ 


Insert offset folio 80 here 76977.080