Posts Tagged ‘Amtrak CEO’

Flynn’s Success Will Hinge on His Political Skills

March 2, 2020

It remains to be seen what, if any, changes will result from the installation of William Flynn as Amtrak’s next president and CEO next month.

Like the lumbering Boeing 747s that Flynn’s soon to be former company Atlas Air flies in cargo service, Amtrak is not something that can be turned around quickly or rapidly raced upward to cruising altitude after takeoff.

No doubt some rail passenger advocates are happy to see Richard Anderson leave although he’ll continue as an adviser to Flynn through the end of the year.

Anderson at times showed an abrasive personality that made him a lightning rod of criticism.

Perhaps that was what the Amtrak board of directors thought was needed in 2018 but it may have decided that in 2020 a kinder, gentler CEO is needed.

The news release announcing Flynn’s hiring contained the type of laudatory language that is standard in public relations products announcing personnel changes.

There were a lot of words that didn’t say much of substance.

It gave little indication about what role Flynn sees for Amtrak as a transportation provider.

The release tried to portray Flynn’s hiring as a planned succession although that might be boilerplate language that means little.

Anderson’s leaving had been foreshadowed in a Wall Street Journal article earlier this year yet the Amtrak board of directors had not given any public signals that Anderson’s departure was imminent.

Nor has the Amtrak board in public expressed any concerns or discontent with how Anderson has managed the passenger carrier.

The news release and a statement sent to Amtrak employees were filled with the type of self-congratulatory statements about how ridership is up and finances have improved.

Amtrak has hinted at breaking even this year on an operating basis which should be not confused with making a profit, something that has never happened in the company’s 48-year history.

More than likely Flynn was hired because of his executive experience rather than his views of the role of rail passenger service in the United States.

If asked, he’ll say all the right things about how the future of rail service is bright.

But I would be surprised if Flynn’s hiring means that certain things that have been lost during the Anderson regime, such as full service dining cars on the Capitol Limited and Lake Shore Limited, will make a comeback.

Don’t expect the new rules Amtrak just implemented to make it tougher to get refunds or change your travel plans to go away.

Private car owners and those wishing to charter an Amtrak train probably won’t see significant changes in Amtrak rules and policies.

In short, I don’t look for Flynn to herald the second coming of W. Graham Claytor Jr.

It may be that Amtrak’s directors decided Anderson had become too toxic on Capitol Hill to win the type of budgetary and policy victories that Amtrak is eyeing.

The passenger carrier has an ambitious legislative agenda that is tied in with a new surface transportation bill that Congress needs to pass to replace the one that expires on Sept. 30.

Among other things, Amtrak wants funding to establish new corridor-oriented services, laws that would gives it a stronger position when talking with his host railroads about on-time performance, and capital funding for new equipment and infrastructure.

There had been speculation earlier that Anderson’s replacement would be current Amtrak senior vice president Stephen Gardner.

Instead, Amtrak’s board hired another airline executive. Flynn has four decades of transportation industry experience but it is worth noting that he has spent his career in the private sector.

Such Amtrak heads as David Gunn and Joseph Boardman had experience in the public sector.

Amtrak may on paper be akin to a private company, but given its reliance on public funding it has much in common with a non-profit agency even if it tries to operate like a private company.

Ultimately, what is important is that Amtrak’s CEO understands not just how railroads operate but how to play the political games inherent in being an entity that has two boards of directors – the one that hired you and the members of Congress who control your funding and so much about the environment in which your company operates.

Amtrak to Get New CEO on April 15

March 2, 2020

Amtrak will get a new president on April 15 and the passenger carrier has again dipped into the airline industry executive ranks.

William Flynn

William Flynn, who will replace Richard Anderson, is currently CEO of Atlas Air Worldwide but once worked as an executive at CSX.

Flynn’s appointment was announced late Monday morning after the news was broken by The New YorkTimes.

An Amtrak news release said Anderson, 64, a former CEO of Delta Air Line and Northwest Airlines, will continue at Amtrak as a senior adviser through the end of the year.

Flynn, 66, will be the third time Amtrak president and CEO in just over three years.

Charles “Wick” Moorman, the former CEO of Norfolk Southern, stepped down on Dec. 31, 2017 and Anderson, who had been co-CEO of Amtrak with Moorman since July 2017.

Moorman had joined Amtrak on Sept. 1, 2016. He replaced the late Joseph Boardman.

Flynn held several positions at CSX between 2000 and 2002, including the post of senior vice president of strategic planning and senior vice president at CSX Transportation.

He also held senior management positions at CSX subsidiary Sea-Land Services.

Atlas has three carriers, Atlas Air, Polar Air Cargo and Southern Air. It has 3,200 employees and operates in 89 countries.

It carries air freight and operates military and passenger charter flights.

Flynn has been at Atlas for 13 years and has four decades of transportation and logistics experience

One of Atlas’ customers is Amazon. News reports indicate that Atlas has has been embroiled in tense labor negotiations with its pilots over the past three years.

The Wall Street Journal reported that Flynn’s Amtrak salary will be $475,000 and he is expected to serve as CEO for five years.

That is relatively small amount compared to the $6.9 million in compensation, including base pay and bonuses, which Flynn earned at Atlas in 2018.

Flynn received his undergraduate degree from the University of Rhode Island and a master’s degree from the University of Arizona.

Another Glimpse Into the World of Richard Anderson

November 21, 2019

A Bloomberg News reporter has given another glimpse into the worldview of Amtrak CEO Richard Anderson.

It’s a small examination yet a revealing one.

Anderson is not a sentimental man. For him everything is about business.

OK, so you probably already knew that, right?

Still, consider this comment from Anderson in response to a question about how his father, who worked for the Atchison, Topeka & Santa Fe, used to take the family on train trips to Chicago and Los Angeles.

“I didn’t come away with some huge love for trains, just like I don’t have some huge love for airplanes,” Anderson said. “They’re machines that you build a business around.”

Just machines? If you think about it that’s the response you might expect from a chief executive officer who spends his day looking at financial reports and making financial decisions.

It’s just that his predecessor as Amtrak president, Charles “Wick” Moorman, did have a passion for trains and that’s something that makes railroad enthusiasts feel better.

The Bloomberg portrait of Anderson doesn’t contain much more of his thinking that hasn’t been reported in other articles or he hasn’t said during occasional speeches and congressional testimony.

My key takeaway from the article was a better understanding of how Anderson got to be president and CEO of Amtrak and why.

I’ve long argued Anderson is not a rogue operator or a Trojan Horse who has surprised those who hired him.

Anderson may get most of the criticism but one of the lesser discussed elements of the many changes that have been made at Amtrak in the past two years is that Anderson was hired by a board of directors who would have spent considerable time with him before offering him the job.

They would have asked questions about his vision for Amtrak and his philosophy about transportation generally.

They knew what they were getting: A former airline CEO, yes, but also a former prosecutor.

Leonard described Anderson as having the cerebral demeanor of a senior college professor.

The reporter quoted a former boss, Texas prosecutor Bert Graham, as saying Anderson was one of his office’s best trial lawyers. “He had a way of seeing through bullshit,” Graham said.

Amtrak board members might have thought Anderson’s no nonsense approach was exactly what the passenger carrier needed.

He had the personality to do what previous Amtrak presidents had been unable or unwilling to do.

In that sense, the Amtrak board might have been like the parent of a spoiled child who hopes a teacher will do what the parent failed to do in imposing discipline.

Jim Mathews, president of the Rail Passengers Association, indirectly touched on that point when he observed that Anderson was hired to operate Amtrak like a profit-making company such as Delta Air Lines, where Anderson served as CEO between 2007 and 2016.

“He looked everybody in the eye and said, ‘OK, are you guys ready for this? We’re going to break some stuff.’ And everyone said, ‘Yes, this is what we want.’ And then he started breaking stuff. And people were like, ‘Wait, hold up. Stop! What?’ ”

And that is the crux of why Anderson is so unpopular with many passenger train advocates. He broke too many of their favorite dishes and was unapolegetic about it. He didn’t even pretend to regret it.

Anderson knows that, telling Leonard, “Most of the critics are the people who yearn for the halcyon days of long-distance transportation.”

Leonard wrote that Anderson started to lose his cool when asked if he was trying to kill Amtrak’s long-distance routes as many of his detractors have contended.

No, he answers, Amtrak will continue to operate those routes as Congress has directed and will spend $75 million next year refurbishing passenger cars assigned to long-distance service and spend another $40 million on new locomotives.

But Anderson also reiterated a point he’s made numerous times. He wants to break up some long-distance routes into shorter corridors and transform other long distance trains – he specifically mentioned the Empire Builder and California Zephyr – into experiential trains.

Anderson said he planned to ask Congress next year to authorize an “experiment” of breaking up some long-distance routes, citing the tri-weekly Sunset Limited as one Amtrak would like to address.

He knows that won’t play well with many. “Part of the problem is that the people that are the big supporters of long distance are all emotional about it,” Anderson said. “This is not an emotionally based decision. They should be reading our financials.”

Anderson can be confrontational and doesn’t mind, as the Bloomberg piece noted, throwing an elbow or two against a critic or competitor.

That’s not necessarily a bad thing because at his level the competition can be cutthroat as companies and organizations look to further their own interests.

The article noted that in an effort to confront the host freight railroads that handle Amtrak trains in most of the country Amtrak instituted quarterly report cards that grade how well they dispatch Amtrak trains on time.

Confrontation may be a useful tactic but it also has a price.

Knox Ross, a member of the Southern Rail Commission, discussed that with reporter Leonard as they rode a two-hour tardy Crescent through Mississippi toward New Orleans.

Ross said he has talked with managers at Amtrak’s host railroads who hate those report cards.

Those host railroads may not be so keen about cooperating with Amtrak to implement Anderson’s vision of corridor service between urban centers that airlines no longer serve.

The SRC has been pushing for the creation of a corridor service between New Orleans and Mobile, Alabama.

Federal funding has been approved and the states of Mississippi and Louisiana have agreed to contribute their share of the funding. But Alabama thus far has balked.

And, Ross, said, CSX, which would host the trains, doesn’t want them.

No date has yet been announced for when the New Orleans-Mobile route will begin and Ross sees the obstacles to getting that corridor up and running as a preview of what Anderson and Amtrak will face if the passenger carrier seeks to create the type of corridor services it has talked about creating.

In the meantime, Anderson continues to look for ways to cut costs as he works toward his goal of making Amtrak reach the break-even point on its balance sheet from an operational standpoint as early as next year.

Then Amtrak can take the money it now spends underwriting operating losses and use it to buy new equipment and rebuild infrastructure.

If you want to read Leonard’s piece, you can find it here: https://www.bloomberg.com/news/features/2019-11-20/amtrak-ceo-has-no-love-lost-for-dining-cars-long-haul-routes

But be forewarned that he has bought into the conventional wisdom of how the Northeast Corridor is profitable and the long-distance routes and state-funded corridors are not.

The piece is also heavy on the nostalgia angle, particularly in regards to the recent changes in onboard dining services and the historic role of passenger trains in America.

Yet if you can adopt even a little bit of Anderson’s “just the facts mam” personality, you will see where he’s coming from and have a better understanding as to why he has been doing what he’s done.

Observers Give Their Take on Amtrak’s new CEO

June 29, 2017

So who is this former airline executive that Amtrak has chosen to take over as its CEO later this year when Charles “Wick” Moorman retires?

Richard Anderson

Richard Anderson was the head of Delta Air Lines, but he also at one time served as a prosecutor and the vice president of an insurance company, United Health.

His father, Hale, worked for the Atchison, Topeka & Santa Fe in Texas and the family moved multiple times as the elder Anderson held office jobs at posts from Galveston to Dallas and Amarillo.

When he was in college, the younger Anderson’s parents died of cancer and he subsequently had to raise his two younger sisters as he worked to earn college tuition money.

After earning his law degree, Anderson worked in Texas for nearly a decade as a prosecutor.

His entry into the airline industry began in the legal department of Houston-based Continental Airlines.

He would later join Northwest Airlines and became its CEO three years later. As Delta Air Lines was emerging from bankruptcy in 2007, its board of directors asked Anderson to become its CEO, which meant that he succeeded Gerald Grinstein, a former CEO of the Burlington Northern Railroad.

“Richard has a hands-on, roll-up-your-sleeves, let-me-see-how-this-thing-really-works kind of approach,” John Dasburg, Northwest’s former president, told USA Today in 2008.

During his time at Delta, Anderson sometimes sought unconventional solutions to solve problems.

For example, in an effort to cut fuel costs, Delta purchased an oil refinery near Philadelphia in 2012.

Industry reaction to Anderson being named co-CEO of Amtrak – Moorman won’t be retiring until late December – has been mostly positive.

He received unqualified endorsements from Linda Bauer Darr, president of the American Short Line and Regional Rail Road Association, and from Ed Hamberger, the president of the Association of American Railroads.

Jim Mathews, head of the National Association of Railroad Passengers lauded Anderson’s transportation experience.

“NARP is very pleased Amtrak is making the sensible move of bringing in an executive with strong management experience in a customer-service oriented transportation company,” Mathews said.

Former NARP executive director Ross Capon said the fact that Moorman will be Amtrak’s co-CEO through December shows the two men will likely have a good working relationship and that Anderson will be able to learn from Moorman.

Not all advocacy groups were enthusiastic about Anderson’s appointment.

Charles Leocha, chairman of Travelers United and an airline consumer advocate, said in an interview with Trains magazine that Anderson is “a real charger” who “has not been a friend of consumers, but ran an efficient airline as consolidation was completed . . .”

Richard Rudolph, the president of the Rail Users Network, said Amtrak needs someone who knows railroads, knows how to run a company and can stand up against Congress and President Donald Trump.

Also expressing skepticism was former Amtrak President and CEO David Gunn.

“If he can’t coax people at Amtrak who know how to run a railroad out of their fox holes, he’s doomed,” Gunn said in an interview with Trains. “And you have to convince them you have a plan that makes sense operationally and is not driven by politics.”

Gunn said the best hope is that Anderson has some knowledge of railroad operations.”

Jackson McQuigg, a railroad historian and passenger advocate based in Atlanta, told Trains that he sees in Anderson a man with a demeanor similar to that of W. Graham Claytor Jr. between 1982 and 1993.

“He had a stellar reputation in Atlanta and cared about the city and its history,” McQuigg told Trains.

While at Delta and Northwest, McQuigg noted, Anderson had a reputation for being a tough guy who wasn’t afraid to mix it up with the airline unions.

“Maybe that bunch in the White House will listen to him,” McQuigg said of Anderson. “It will be interesting to see if that happens or if Anderson presides over dismemberment instead. All I know is that the long-distance trains had better be preserved or the whole thing will go up in political flames.”

Richard Anderson to Become co-CEO of Amtrak July 12, Wick Moorman to Retire Dec. 31

June 26, 2017

Amtrak will be getting a co-president and CEO next month. Charles “Wick” Moorman will be joined by Richard Anderson, who has 25 years of experience in the airline industry.

This arrangement will continue until Dec. 31, when Moorman plans to step down from his position at Amtrak but continue as an adviser to the company.

The announcement was made in an internal memorandum sent to Amtrak employees and confirmed by a statement issued by Amtrak.

In the memo to employees, Moorman noted that he promised his wife that he time at Amtrak would be short.

Moorman said he said he would stay at Amtrak only as long it took to achieve three goals: Making the company more efficient, developing a stronger safety culture and working with the board of directors to find an executive to lead the railroad long term.

Anderson is a former chief executive at Delta Air Lines and Northwest Airlines, the latter having been acquired by the former.

“Richard has a proven track record of driving growth while enhancing the customer experience,” Moorman said. “What I really admire about Richard is he faces difficult challenges head-on. He has helped companies navigate bankruptcy, a recession, mergers and acquisitions, and 9/11. In total, Richard is a leader with the strategic vision and tactical experience necessary to run a railroad that benefits our partners, our customers and our employees.”

The statement noted that Anderson’s father worked for the Santa Fe.

Anderson, 62, most recently was executive chairman of the Delta Air Lines board of directors after serving as the airline’s CEO from 2007 to 2016. He was executive vice president at United Healthcare from  2004 to 2007 and CEO of Northwest Airlines from 2001 to 2004.

He also served in the legal division at Continental Airlines and was a former county prosecutor.

“It is an honor to join Amtrak at a time when passenger rail service is growing in importance in America. I look forward to working  alongside Amtrak’s dedicated employees to continue the improvements  begun by Wick,” Anderson said in a statement.

Anderson earned a Bachelor of Arts degree at the University of Houston at Clear Lake City and a Juris Doctorate at South Texas College of Law. He is a native of Galveston, Texas.