NEW YORK — Facing mounting debts, Amtrak announced a sweeping austerity plan yesterday while threatening to end legendary long-haul passenger routes like the Empire Builder if Congress does not provide $1.2 billion in financing next year, reports the New York Times.
To cut costs, Amtrak will eliminate 1,000 union and management jobs, about 4 percent of its national work force. It will also defer station improvements and limit the refurbishment of rail cars to urgent repairs. Ticket window hours at 73 of the least-used rail stations in the nation will be shortened, while spending for advertising, marketing and research will be reduced.
Over all, Amtrak hopes to save $285 million this year. But the cost of repairing stations and thousands of miles of track keep mounting, and Amtrak — which lost $1.1 billion last year — will remain in the red.
In making the announcement today, the company’s president, George D. Warrington, abandoned efforts to reach operational self-sufficiency by the end of this year, a goal mandated by Congress. By asking for $1.2 billion in the federal budget that President Bush will introduce on Monday, Mr. Warrington made it clear that he thought the railroad could not run properly without subsidies. He issued an ultimatum to Congress and the White House: Provide enough money or Amtrak will systematically end most of the long-haul passenger service that only Amtrak provides. Routes like the Chicago-to-Seattle Empire Builder and the Crescent, which links New York and New Orleans, would disappear as soon as October.
“Corporate profitability is not compatible with the operation of long-distance trains, which by their nature are and always will be unprofitable,” Mr. Warrington said. “Policy makers need to decide what kind of passenger rail system America needs, how much the system requires in capital and operating support and how the government will pay for the system.”
Amtrak’s moves will sharpen the debate over the railroad company, a government corporation formed in 1971. Ridership has increased steadily over the last few years, but the economic downturn has cut into the railroad’s income by as much as $120 million, Amtrak estimates. Adopting additional security measures after the Sept. 11 terrorist attacks cost $16.5 million.
Sept. 11 highlighted the importance of a national rail system providing an alternative to air travel. For its part, the Bush administration is pressing for a thorough reassessment of passenger service in the United States.
Amtrak’s Congressional authorization expires before the end of the year, and Congress is divided over reauthorizing the system, which carried more than 23 million passengers last year. Members of Congress from the Northeast and the Pacific Coast, where high-speed rail service is heavily used, continue to support Amtrak. In much of the rest of the country, where trains run infrequently and ridership is low, the railroad is often seen as a waste of money.
In recent months, both the General Accounting Office and the Amtrak Reform Council, which Congress established to keep an eye on Amtrak’s finances, have concluded that Amtrak has no chance of weaning itself from subsidies.
Thomas A. Till, chairman of the council, said the government should pay to upgrade the nation’s railroad tracks and bridges and maintain them. But in a report scheduled to be delivered to Congress on Feb. 7, the council will recommend that about 400 miles of track in the Northeast Corridor be taken from Amtrak and financed directly by the government. The council will also suggest that private operating companies be allowed to compete with Amtrak.
Amtrak officials have argued that the council’s actions have hurt the railroad. Mr. Warrington said lenders walked away from $52 million in financing for equipment and services after the council issued its finding on Amtrak’s ability to become self-sufficient.
Railroad unions also opposed the council’s actions. A federal judge yesterday denied their request for a temporary restraining order to prevent the council from presenting its restructuring plan to Congress on Feb. 7.