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Amtrak Facing Total Shutdown,
Says System Chief

June 7, 2002

Amtraks new chief executive warned that the shutdown of the national passenger rail system was imminent if it does not receive a $200 million cash infusion in the next three weeks.

David Gunn, Amtrak president, said this week he would close not only long-distance routes, but the entire national network if an emergency loan is not secured by July.

"If we cant borrow $200 million, we cant make it through this fiscal year," Gunn told the Washington Post. "We must have a loan in place by the end of this month."

IBEW Railroad Department Director Ray Cobb said he and other representatives of railroad labor heard Gunns apocalyptic warning three days earlier. In that meeting, Gunn also outlined a restructuring plan that centralizes decision-making responsibilities, substantially reduces the number of top executives and promises greater openness in Amtraks finances. Cobb praised both Gunns plans and his assertive approach.

"I think its good for Amtrak," Cobb said. "I believe it will work if he gets the funding he requested."

Congressional support in the form of subsidies is crucial to the future of Amtrak. Some of the systems biggest critics are legislators like Senator John McCain (R-Arizona) who offered Amtrak an encouraging message on Thursday. In a letter to Gunn, McCain said he would call for hearings to investigate how to avoid a shutdown. Congress is faced with deciding Amtraks future this fall (See "All Aboard: Amtraks Survival is at a Crossroads," IBEW Journal, May 2002). Chronically in debt, Amtrak was forced by Congress five years ago to agree to a "glide path to self-sufficiency" to become self-supporting by 2002. With that deadline looming, some politicians have been calling for Amtraks break-up. And Cobb railway labor leaders are awaiting word on a White House plan for Amtrak they fear might involve privatization.

IBEW has 1,400 members employed by Amtrak, and 87 members have lost their jobs this year. Two weeks ago, the Senate Appropriations Committee approved an emergency supplemental bill that included $55 million for safety upgrades and allow Amtrak to make repairs to overhaul damaged and neglected trains. Amtrak estimates that work generated from the funding would allows them to restore 30 jobs furloughed in February in Delaware, some of whom are IBEW members.

Amtrak has historically been treated as the poor stepchild of federal transportation spending. While highways received 52 percent of the federal handouts between 1985 and 1995, railroads received 2 percent. Aviation received 24 percent and mass transit got 12 percent. Of those, Amtrak is the only one that does not have its own line item in the transportation budget, making annual appropriations season difficult for its supporters.

All Aboard: Amtraks Survival is at a Crossroads  - IBEW Journal, May 2002