Amtrak president is fired

Gunn claims that the goal of the Bush administration is to liquidate the railroad

November 10, 2005|By NEW YORK TIMES NEWS SERVICE .

WASHINGTON -- Amtrak's board fired the company's president yesterday morning, widening a divide between the Bush administration and Congress over the future of the railroad.

The board chairman, David M. Laney, said that the president, David L. Gunn, had helped develop a strategic plan that would have injected more competition into passenger operations, but that Gunn's "enthusiasm and commitment seems to have drained away."

Laney said Gunn had failed to move forward on simpler initiatives, such as outsourcing maintenance and catering in a way that would cut expenses.

But in a letter to the board dated Nov. 9, Gunn said, "I can assure you that we have already begun to work on those initiatives that are wholly within our control." In a telephone interview yesterday, he said some changes would require action by Congress.

Gunn, who is credited with turning around New York City's subway system in the 1980s and came out of retirement three years ago to steer Amtrak successfully in a period of financial crisis, described the reason for his dismissal as "ideological."

"Obviously, what their goal is - and it's been their goal from the beginning - is to liquidate the company," Gunn said in an interview yesterday.

The Bush administration has proposed putting the railroad tracks of the Boston-to-Washington Northeast Corridor, which are Amtrak's major asset, in the hands of a federal-state consortium, an idea Gunn has vehemently opposed. The board has voted to put the corridor in a separate subsidiary.

Gunn said he did not oppose injecting competition into the system if it were done carefully. He pointed out that the administration had discussed bankrupting the railroad, which would mean breaking it up, as a way to reorganize.

"They want at least one transportation mode that is totally free market," Gunn said.

But highways, airports and ports are all federally subsidized, he said, decrying "all this angst over an operating deficit of 500 million bucks for the whole country, and the bulk of money going into capital or infrastructure."

The action yesterday was a sharp turnaround for the board. Asked in September about Gunn's performance, Laney told a Senate subcommittee, "Mr. Gunn has done, as far as I am concerned, a splendid job."

He said Gunn had "righted a ship that was listing and about to spill over."

Gunn, in fact, is known as a rail-turnaround artist. He was brought in to fix New York's system in the late 1980s, and provided crucial leadership in the construction of the Metro subway system in Washington.

Amtrak's supporters in Congress reacted swiftly and bitterly to Gunn's removal. Democrats sought to contrast what they said were his successes, including cutting expenses, increasing ridership and improving the railroad's physical condition, with the recent failures of the Federal Emergency Management Agency after Hurricane Katrina.

"We have learned recently that there is room for cronies in this administration," said Sen. Byron L. Dorgan, a North Dakota Democrat, "and we've learned the cost of cronyism. And now we've learned today there is not room for straight shooters."

Sen. Charles E. Schumer, a New York Democrat, questioned the board's legal ability to fire Gunn. Only one board member, Laney, was appointed by the president and confirmed by the Senate, he pointed out. The secretary of transportation is, by statute, a member, and two other members are recess appointments, whose terms will expire when Congress goes home in a few weeks. There are three vacancies.

"Gunn is more legitimate than the board is," Schumer said.

He asserted that Gunn had been fired over policy, saying: "The policy difference is that the board wants to kill Amtrak and Gunn wants it to prosper. It's that simple."

The railroad announced yesterday morning that Gunn had been "released" from his job, then notified Gunn. He replied with a memo to the board: "For your information, I did not resign. I was removed. It's been fun. Good luck."

Gunn, who is 68, was paid $275,000 a year. An Amtrak spokesman, Clifford Black, said he did not know whether there was a severance package.

On Sept. 30, the railroad ended the fiscal year with $120 million in cash as operating capital, a strong performance, Gunn said, especially given that the Acela express train was out of service for most of the summer because of a brake problem. The Senate just voted 93-6 to authorize $11.6 billion for Amtrak over the next six years, although the vote did not actually appropriate any money. That measure, which will probably go to a conference committee to work out differences with a differing House version, would make the Amtrak president a member of the board.

Both the House and the Senate have supported aid packages for the current fiscal year that are far more generous than the one the White House has proposed.

But the Government Accountability Office said last week that while progress had been made at the railroad, Amtrak needed "fundamental improvements."

Gunn is widely credited with improving the railroad's management, cutting costs, imposing better financial controls and improving the state of repair of Amtrak's locomotives and passenger cars, which are old, and its tracks, signals and electrical systems, which are truly antique. But while ridership has risen to record levels recently, government auditors predicted that its budget deficit would grow sharply in the next few years. The administration has said it is determined to end the perennial subsidies to the railroad, which was created 30 years ago to take over passenger service as the commercial railroads abandoned that business as unprofitable.

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