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The 40-year Train Wreck
uExpress ^ | 27 May 2012 | Scott Burns

Posted on 05/29/2012 9:16:44 PM PDT by smokingfrog

The cover of the 2011 annual report for Amtrak, our government-owned passenger train service, celebrates its 40th anniversary as a business. Well, kind of. It can certainly celebrate its endurance as an organization drawing unending support from the U.S. Treasury and its many, many bondholders.

But as a business? I don't think so.

In every year since 1971, Amtrak has lost money. Real businesses don't lose money for 40 consecutive years. When they lose money for a year or so, the top dogs get heaved. If the losses go on much longer, the company is taken over, dismembered and sold for parts. While capitalism can be as dumb, arrogant and shortsighted as government, no one can say capitalism is sentimental. Bad or outmoded products and services die. Good products and services thrive. We benefit.

Sadly, it doesn't work that way when the enterprise is supported with tax dollars. Amtrak executives have appeared before Congress with plan after plan, swearing to approximate a break-even enterprise, but it never materializes.

In the late 1970s, when there was pressure to shut it down, Amtrak survived by claiming that pension costs would exceed any benefit in closing shop. Today, an entire generation of workers later, it is still losing money.

How much money? In 2011, in spite of rising ridership, Amtrak collected $2.7 billion in revenue but lost a bit more than $1.3 billion. The good news is that the loss is less than double its $763 million loss in 1984, which was a long time ago. So relative to all the other losses our government has, Amtrak is moving toward the accounting obscurity of becoming a federal rounding error.

(Excerpt) Read more at uexpress.com ...


TOPICS: Editorial; Government
KEYWORDS: amtrak
Read the entire article for a comparison between Amtrak and Southwest Airlines.
1 posted on 05/29/2012 9:16:57 PM PDT by smokingfrog
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To: smokingfrog

Turn this monstrosity over to the private secure and I would make a profit within five years ... that is if you could find any takers.


2 posted on 05/29/2012 9:20:57 PM PDT by doc1019 (Romney will never get my vote!)
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To: doc1019
Turn this monstrosity over to the private secure and I would make a profit within five years ... that is if you could find any takers.

The one plan no politician has ever considered. They would have to "give" all the assets to an entity and then fund the losses for a period of 3 years just to peak some interest. All the pensions would have to be maintained by the government as grandfathered clauses with new workers, under new management being structured differently. The union would have to go.

But I think it could be done.

3 posted on 05/29/2012 9:35:15 PM PDT by Tenacious 1 (With regards to the GOP: I am prodisestablishmentarianistic!)
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To: doc1019

Sell it and all its infrastructure for $1. The government would stop losing money, and in 3 years, and competent business person would make money.

Heck, I’m going to offer that $1. No joke.


4 posted on 05/29/2012 9:35:44 PM PDT by piytar (The predator-class is furious that their prey are shooting back.)
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To: Tenacious 1

Typo: and business = any business...


5 posted on 05/29/2012 9:47:10 PM PDT by piytar (The predator-class is furious that their prey are shooting back.)
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To: doc1019
Only if the remaining property taxes and the onerous Federal Railroad Administration regulations were repealed (and the predecessor ICC had quite onerous regulations itself). The FRA and ICC were responsible for slowing down the speed of passenger trains to uncompetitive levels (ever ask yourself why the Northeast Corridor is the only railroad artery that allows speeds of 125 mph?—all due to DC politics . . . the majority of the rest are capped by law at 79 mph due to regulations on track “classes”, signaling requirements, and even crashworthiness requirements on passenger locomotives and cars).

There are still private railroads out there, but thanks to DC, they won’t touch passenger rail with a ten-foot pole anymore. Thanks to liberal politics, there are only five Class 1 private railroads, too, where even back in 1978 there were at least 17.
6 posted on 05/29/2012 9:54:00 PM PDT by Olog-hai
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To: piytar

How dare u!

I will offer 99cents!

(gawd I hope I don’t win ths auction)

Regards Ken


7 posted on 05/29/2012 11:39:01 PM PDT by kennyboy509 ( Ha! I kill me!!!)
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To: smokingfrog
The 40-year Train Wreck

I thought this was an article about Hillary.

8 posted on 05/30/2012 12:48:12 AM PDT by Talisker (One who commands, must obey.)
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To: kennyboy509; piytar

You both understand that, after “winning”, you would own a company losing $3,561,643.00 per day?

Gonna be a rough first week on the job.


9 posted on 05/30/2012 2:31:02 AM PDT by NY.SS-Bar9
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To: smokingfrog

The biggest problem is all the other railroads upon which Amtrak depends. Their infrastructure is crap! If Southwest Airlines had to depend upon other commercial enterprises for the air routes it would be a different situation for them too.


10 posted on 05/30/2012 2:48:13 AM PDT by Portcall24
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To: smokingfrog
I have been through a number of downsizings of Corporations. Item number one is cutting expenses, no more plants maintained by the small business and try getting office supplies because they stopped buying them. They watch every penny.

With that said, If Team Romney doesn't get rid of Amtrak, Fannie & Freddie, and cut funding competely for NPR, PBS, Planned Parenthood, National Endowment for the Arts he will fail.

I hope the inner "Bain" in him has the cohones to right size/downsize Fedzilla once and for all. The blueprints to do such re-engineering have been out their, Cato, Heritage and have shown up on Business Insider.

And this has to be done before they get to Entitlements.

11 posted on 05/30/2012 3:40:14 AM PDT by taildragger (( Palin / Mulally 2012 ))
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To: smokingfrog

Dubya and the GOP had all the levers of power between 02 through 06. What’s their excuse?


12 posted on 05/30/2012 3:56:46 AM PDT by KantianBurke (Where was the Tea Party when Dubya was spending like a drunken sailor?)
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To: KantianBurke

Exactly. Their massive failure at anything resembling fiscal responsibility was the driver for the rise of the TEA Party movement.


13 posted on 05/30/2012 4:13:32 AM PDT by FreedomPoster (Islam delenda est)
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To: smokingfrog
This is an industry I'd consider doubling-down on(rail, not specifically passenger rail). A modern day Henry Flagler could build an empire.

Goals:
1) Replace single-car long-haul trucking with high efficiency rail transport. (the teamsters would put out a hit on anyone suggesting this).
2) Reduce traffic/road-wear on public road and highway system.
3) Offer cost effective passenger rail transport between transport hubs.

Required:
1) Upgrade the track network to include a second set of rails. A wider footprint rail-set co-linear with existing lines to provide better stability at much higher speeds. The existing track is about 4'8” wide (about the wheel profile of a Prius), add a set about 7 or 8’ wide. Bridges and tunnels also need to be upgraded to accommodate the larger, wider payload. Legacy and light-load trains can still use the original (inner) tracks.
2) Install a system to quick-change cars from and to the car-string to enable very brief station-time. Loaded cars would be staged and ready before the train arrives. They would be inserted laterally where a car is vacated or at thend of the string. All the changing cars are inserted or removed concurrently. Like an airliner, station stops are minimized (you make money when freight is moving).
3) The appropriate number of passenger cars are located at the beginning of the string to accommodate usage. Passenger service is only provided between rail hubs.
4) Local delivery trucking increases (from rail hub to final destination). Shipyard-like freight exchange.
5) Introduce new technologies (fuel cell, high efficiency diesel, hybrid). Implementing an improvement to a single engine is equivalent to upgrading an entire fleet of trucks.

Who has the $$ and the influence and cahonies to pony-up?

14 posted on 05/30/2012 5:52:02 AM PDT by Damifino (The true measure of a man is found in what he would do if he knew no one would ever find out.)
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To: smokingfrog
This is an industry I'd consider doubling-down on(rail, not specifically passenger rail). A modern day Henry Flagler could build an empire.

Goals:
1) Replace single-car long-haul trucking with high efficiency rail transport. (the teamsters would put out a hit on anyone suggesting this).
2) Reduce traffic/road-wear on public road and highway system.
3) Offer cost effective passenger rail transport between transport hubs.

Required:
1) Upgrade the track network to include a second set of rails. A wider footprint rail-set co-linear with existing lines to provide better stability at much higher speeds. The existing track is about 4'8” wide (about the wheel profile of a Prius), add a set about 7 or 8’ wide. Bridges and tunnels also need to be upgraded to accommodate the larger, wider payload. Legacy and light-load trains can still use the original (inner) tracks.
2) Install a system to quick-change cars from and to the car-string to enable very brief station-time. Loaded cars would be staged and ready before the train arrives. They would be inserted laterally where a car is vacated or at thend of the string. All the changing cars are inserted or removed concurrently. Like an airliner, station stops are minimized (you make money when freight is moving).
3) The appropriate number of passenger cars are located at the beginning of the string to accommodate usage. Passenger service is only provided between rail hubs.
4) Local delivery trucking increases (from rail hub to final destination). Shipyard-like freight exchange.
5) Introduce new technologies (fuel cell, high efficiency diesel, hybrid). Implementing an improvement to a single engine is equivalent to upgrading an entire fleet of trucks.

Who has the $$ and the influence and cahonies to pony-up?

15 posted on 05/30/2012 5:52:26 AM PDT by Damifino (The true measure of a man is found in what he would do if he knew no one would ever find out.)
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To: doc1019

If that company is required to operate under the same rules as Amtrak no it won’t. It would be forced to maintain unprofitable cross country routes and regional lines partially subsidized by the states in addition to handling the railroad retirement (rail workers version of SS) for all rail workers.


16 posted on 05/30/2012 6:29:48 AM PDT by Raymann
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To: Portcall24

I beg to differ. North America’s privately owned railroads are the most profitable and well maintained railroads on the planet. But, because our railroads are privately owned, they respond to the demands of the marketplace...and that demand is to handle heavy freight.


17 posted on 05/30/2012 6:39:21 AM PDT by Mr. Lucky
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To: Damifino

I’ve always thought that larger trains would be a good idea.

They could haul a lot more, and maybe be more fuel efficient.


18 posted on 05/30/2012 8:08:11 PM PDT by smokingfrog ( sleep with one eye open (<o> ---)
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To: smokingfrog
For those who think there are no such things as Black Holes, I present Amtrak and the U.S. Post Office.

For those who think there are no such things as Black A Holes, I present Holder and Obama.

19 posted on 05/30/2012 8:16:02 PM PDT by Kickass Conservative (Confucius say, short note better than long memory....)
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To: NY.SS-Bar9

Day 1: File Chapter 7. Day 2: See who wants to play ball, or chop the assets and walk.


20 posted on 05/30/2012 9:30:33 PM PDT by piytar (The predator-class is furious that their prey are shooting back.)
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To: Mr. Lucky

I agree with you. I probably should have said that the railroad infrastructure is not designed for passenger travel because it is less profitable than freight. And while they have invested a great deal of money in the last few decades there still are bottlenecks and passenger service suffers. Regarding luxury on the passenger trains...the people who can afford that, are busy earning the money to be able to afford it and that means moving between locations in a timely manner that only air travel provides.


21 posted on 05/31/2012 3:11:36 AM PDT by Portcall24
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