Here's a brief summary of the 8 areas of concern to the Amtrak Inspector General.
1. Safety and Security Since FY13, 11 passengers and 9 employees have been killed by Amtrak. To change this disturbing pattern, Amtrak has appointed an Executive Vice President in charge of safety who is responsible for implementing an effective safety culture and overseeing the PTC installation.
2. Governance: Institutionalizing More Effective Management Processes and Tools Amtrak has identified 6 strategic "pillars" that will guide company policies: defining the company strategy, safety, finances, capital investment, customer care and building the Amtrak team. Company programs are expected to be built around the 6 pillars. Amtrak expects to eliminate its annual operating loss by 2021 by increasing revenue and reducing costs. So far, 400 management positions have been eliminated and labor contracts have been renegotiated.
3. Financial Performance: Securing the Company’s Financial Future The LD trains are still losing close to $500 million a year and Amtrak is going to look closely at the division. LD bookings have dropped significantly since the Dupont and Cayce accidents and on-time percentage has dropped over the last few years. Not surprisingly, the customer satisfaction index has also tumbled. We'll see what Amtrak decides to do.
4. Asset Management: Ensuring Capacity, Coordination, and Effective Planning for Major Asset Upgrades Amtrak has a lot of new rolling stock coming online in the next few years and, according to OIG, they doesn't do a very good job of managing major asset programs.
5. Customer Service: Putting Customers First Amtrak is adding staff to ensure that trains are clean and is trying to instill a customer-care attitude among its frontline employees. Amtrak is working to restore its brand value by improving the safety culture and operating cleaner trains. The OIG reports that some employees are resisting the changes in customer service policies.
6. Acquisition and Procurement: Strengthening Procurement Processes Apparently Amtrak needs to improve its contract development, contract management and oversight skills.
7. Information Technology It sounds like IT at Amtrak is a mess and needs to get fixed.
8. Human Resources: Strategically Managing the Workforce Labor costs are about 50% of Amtrak's total expenses. The Engineering Department doesn't have nearly enough staff to complete its projects but the Mechanical Department has plenty of excess capacity. Meanwhile, Amtrak has at least 3,100 contract employees working on projects and has paid over $215 million in overtime wages so far this year.
Clearly Amtrak's reputation has taken a hit with its poor safety record, trains that are late, dirty and staffed by employees indifferent to customer satisfaction. It will be interesting to watch developments with the LD division. But running trains safely and providing a pleasant, on-time journey should improve the financial results tremendously.
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