Archive for Courage leadership

Turnover at the top hits Amtrak at a critical time says PHL Inquirer news report. / Pros and cons summary

Turnover at the top hits Amtrak at a critical time Paul Nussbaum is reporter Posted: Sunday, July 12, 2015, 3:01 AM For full report, go to   http://media.philly.com/designimages/partnerIcon-Inquirer-2014.jpg

Debate points offered by independent reporter.

As it recovers from its worst accident on the Northeast Corridor, Amtrak faces frequent management turnover and structural change, n addition to chronic financial and political challenges. Former Amtrak executives say the turmoil at the top in recent years has disrupted railroad management and distracted employees from their daily duties.

Steven Ditmeyer, a former Federal Railroad Administration (FRA) executive and now an adjunct professor in railway management at Michigan State University, said: “Rapid changes in management are never good, unless they’re aimed at getting rid of nonfunctioning people. Management turmoil is of concern.”

With upper management in flux, former Amtrak executives say, Amtrak may not have worked aggressively enough after deadly train wrecks on other passenger railroads – on Dec. 1, 2013, in New York and on July 24, 2013, in Spain – to identify fixes on its rail network that could have prevented the May 12 derailment in Philadelphia that killed eight passengers and injured 200. ======

Only after the Philadelphia derailment – at the order of the Federal Railroad Administration – did Amtrak quickly install automatic-braking circuitry on the northbound side of the Frankford Junction curve, which would have prevented the fatal derailment.   Amtrak had installed that braking system 24 years earlier on the southbound side of the curve and at several other tight curves on the Northeast Corridor, to automatically slow speeding trains if the engineer doesn’t.

“Certainly one of the reactions to the Metro-North derailment [in 2013] could have been, ‘Let me take a look at all my sharp curves and make sure I have protection for all my sharp curves,’ ” said rail expert Allan Zarembski of the University of Delaware. “With the benefit of 20/20 hindsight, it would have been a good idea.”

COUNTER POINTS

Amtrak president and CEO Joseph Boardman rejected the argument that Amtrak missed a chance to prevent the deadly Philadelphia derailment. He said the lack of automatic-braking circuitry on the northbound side of the Frankford curve was based on Amtrak’s assumption that trains wouldn’t enter the curve at more than the 80 m.p.h. maximum speed allowed on the preceding straightaway.

Mr Boardman also defended Amtrak’s management reshuffle, the latest in a series of reorganizations in the railroad’s 45-year history to try to improve finances and operations and placate Congress.

OTHER BACKGROUND

The railroad’s operating subsidy from the federal government declined from $565 million in fiscal 2010 to $250 million this year.    Amtrak has never been able to meet its congressional mandate to turn a profit. It received $1.4 billion from Congress this year to cover the operating deficit, as well as capital costs for construction, new vehicles, and debt payments.   Because Amtrak relies on unpredictable annual federal appropriations, the railroad lurches from year to year in a constant state of near-crisis.

“It looks like a company, but it is really a government agency,” said Jim Mathews, president of the National Association of Railroad Passengers. “People complain that a ‘real’ company could be more responsive to markets and its customers. “That’s like getting angry when frogs can’t fly.”

Amtrak inherited decrepit bridges, tunnels, and equipment when it took over passenger service from the private freight railroads in 1971. Since then, its backlog of worn-out infrastructure has been growing.   Now it would require an estimated $21 billion to restore just the 457-mile Northeast Corridor (NEC) to a state of good repair. Amtrak and eight regional commuter railroads carry 750,000 passengers a day on 2,000 trains on the NEC corridor.

Boardman, Amtrak’s chief executive since 2008, has repeatedly pleaded with Congress for more money to prevent what he warned last year could be “a bigger, costlier, and far more damaging failure than anything we have seen.”

“Our senior managers have little or no experience in operating or building a railroad,” said officials of the Brotherhood of Maintenance of Way Employees, which is in negotiations for a new labor contract. “The union’s struggle to maintain safe working conditions is hampered by Amtrak senior management’s lust for complete control and railroad inexperience,” they said in a recent union newsletter. The union also cited the problems with Amtrak’s “Safe-2-Safer” program identified in a report this year by Amtrak inspector general Tom Howard. Howard found that reported employee injuries at Amtrak increased from 695 in 2009, when the program began, to 1,301 in 2013, while employee injury claims increased by about 80 percent from 2009 through 2013, with a cost of $80 million.

Boardman dismissed the union leadership’s complaints as self-serving.   He said the union’s “concern has to do with negotiating the next contract and finding an enemy … and there’s no enemy here,” he said.

Boardman’s supporters say he is under constant pressure from Congress and the Amtrak board to cut costs and increase revenue. “He’s got a board of directors of 535 people,” said Mathews, the passenger advocate, referring to Congress. “When you have a congressman deciding the price of a hamburger in a dining car, how can you possibly make the best decisions for the customer?

“When you’re in a reactive mode, you’ve lost control of your destiny…”

The Amtrak inspector general, reported last year that Amtrak had made “significant progress implementing its 2011 strategic plan and accomplishing positive results,” while noting that “a number of challenges remain to be addressed.”

In another report, Louis Thompson, a former Federal Railroad Administration official and a railways adviser to the World Bank, said last year:   “Over its lifetime, Amtrak has had just enough political support to survive but never enough to invest properly or to prosper in any single market, and there is no convincing reason to think this will change significantly with the existing organizational structure.”

pnussbaum@phillynews.com 215-854-4587 @nussbaumpaul Read more at http://www.philly.com/philly/business/20150712_Turnover_at_the_top_hits_Amtrak_at_a_critical_time.html#J65lulgyoj8DgDkz.99

Economic Assessment of a city with these great attributes. Is All Well?

Here is a US city with the following favorable economic attributes.

It has ample water access. It has an international airport. It is served by three competing railroads. It has direct local access to three of the highest traffic density US Interstate Highway routes. Sounds like the basis of a solid urban economic development, correct?

You would be wrong.

This is Gary Indiana. A sort of mini Detroit says The Economist.

Gary’s unemployment rate is unofficially close to 30%

28% of the population lives below the poverty line.

50 some years ago, this city was home to 180,000 people and most were employed and earning good wages. 30,000 were employed at the U.S. steel mega steel mill after WW-2. Today, only about 5,000 work there. And the population is down to < 79,000.

With about one quarter of its building boarded up.

In 1970, about 50% of the residence aged 16 and over worked in manufacturing jobs. Today, only about 14%.

As a Conrail strategic planner with Chicago roots, I watched the change of the southern Lake Michigan heavy industrial regional landscape between the South Chicago steel complex and the Gary Works.  The entire region was caught up in the global steel making changes with cheaper competition from abroad. Gary was not alone.

Investors were losing faith in the old steel business model.  Political elected leaders missed the economic signs.  After all, many like Gary’s past leaders could say they had all the infrastructure qualities — some even an international airport!!

RESURRECTION?

Gary is trying to reinvent itself. Maybe as a logistics semi processing and distribution center.

It is clear that despite its apparent advantageous characteristics in the introduction above, fancy economic indicators like “access” don’t by themselves make the future. Hard work and excellent choices are needed in order to reinvent a healthy city economy.

A manufacturing giant through and after WW-2, approximately 30% of the US workforce was in manufacturing. Today, maybe ten percent.

Lots of cities from Detroit to Gary failed to catch the changing economic trends after the late 1970’s an adapt. Some did, like South Bend and Galena.

The critical success factor is to know how to make change and execute.  To walk away from a historical core local employer like US Steel was in Gary is hard.  Too often the easy road of hanging on is the political choice.  City planning skills to make such strategic changes are often lacking.  It is a tough call,

Check The Economist 11 July issue for details of the stories as cities try to remake themselves rather than manage their decline.

Commodity Global Surpluses Persists — means weak demand for rail services

A Bloomberg report on Jul 8, 2015

The analysis of the demand for port and rail freight always begins with an examination of the market supply/demand at the buyers level. China and India are the major demand markets. But the long term surplus of supply means tough times ahead for suppliers in the emerging nations.

According to a Bloomberg report, the world is still mired in a surplus of most commodities, which means tough years ahead for prices and shipments of added materials. The actual source is from analysts at Goldman Sachs Group Inc. led by Jeff Currie.

“Long-term surpluses in most commodity markets require prices to remain lower for longer,” the Currie team wrote. The markets are contending with declining costs, a strengthening dollar and slowing growth in emerging economies like China that use a lot of raw materials, the bank said.

Patrick Pouyanne, the chief executive officer at French oil giant Total SA, told a parliamentary commission in Paris that the oversupply of oil will last into 2016. A sustained long term recovery this year isn’t likely, Societe Generale said in a report today.

Despite the long term slide in prices and the lowered market demand, most emerging nations have still not adjusted their strategic plans for rail,and port growth. Their current tactics seem to be “damn the torpedoes, and full speed ahead”. That kind of thinking over the past decade resulted in Greece’s economic headache.

Who will step up and change investment strategy first? Who is going to be that leader?

To read the entire article, go to http://bloom.bg/1Hbu7HR Sent from my iPad

A message about PASSIONATE LEADERSHIP for all of us

I saw this story on the BBC News

It is about having the courage to stand up and be a leader. It’s about focusing on doing the right thing. Even in politics, leaders are important. ——-

The bill to remove the Confederate flag from the grounds of South Carolina’s state capitol as a reflection of racial hate looked to be lost until a Republican lawmaker gave a passionate call to action. She, an ancestor of the Confederate government had the courage to take a firm stand at a critical junction in the debate.

In the four-minute interjection by Ms Horne, a 42-year-old lawyer, she sought to cut through arguments about heritage made by opponents of the bill. “I’m sorry. I have heard enough about heritage. I have a heritage. I am a life-long South Carolinian. I am a descendant of Jefferson Davis, OK?” she said. “But that does not matter. It’s not about Jenny Horne. It’s about the people of South Carolina who have demanded that this symbol of hate come off the statehouse grounds.” —-

There is a lesson here for those of us in the logistics and rail industry. We need courageous leaders to cut to the essential requirements if railways are to seize market share. And sometimes our examples come from a unrelated case like this one in South Carolina as an example of courage.  . Cheers!

Read more: http://www.bbc.co.uk/news/world-us-