After a record financial year in 2019, this year was set to be the first time in its nearly half-century history that Amtrak turned a profit. Instead, due to pandemic-induced financial woes, the quasi-governmental organization is requesting nearly five billion dollars in aid from the federal government.
It’s also announcing service cutbacks and furloughs of about 2,000 employees nationwide.
Amtrak CEO and President William Flynn said at a Congressional Committee hearing earlier this month that, without the cutbacks, Amtrak would burn about $250 million a month.
“At this rate of loss, we would be forced to take drastic measures with long-lasting impacts on the company, on our employees and on our network,” Flynn told the Congressional Transportation Committee.
The changes are slated to go into effect in October, and will likely remain until a federal bail-out is passed or ridership rebounds.
Flynn says that, since March, Amtrak’s overall ridership has plummeted by more than 95%. Despite one billion dollars in funding from the federal CARES act earlier this year, the organization’s revenue is down more than eighty percent.
The company hopes to recall furloughed employees and resume daily operations once people start travelling again. Ron Kaminkow, General Secretary of the Railroad Workers United, a multi-state coalition of rail workers, says cutting train service will only deepen Amtrak’s financial woes.
He points to similar steps taken in the nineties that failed to cure Amtrak’s economic struggles.
“Amtrak has tried numerous things in the past to cut costs,” Kaminkow says. “One of the things they tried, back in the nineties, was taking a lot of these daily departures and reducing them to three times a week. The problem is, there are fixed costs and overheads, whether you have a train once a week or seven times a week.”
Kaminkow also says that, even if the trains aren’t running, they still require maintenance and upkeep. Replacement parts and labor to maintain the locomotives are fixed costs that Amtrak can’t eliminate by cutting down on service.
“Our fear is that, by reducing the long-distance trains to three times a week, it could be the beginning of the end of the national train network,” he says.
Nona Hill, the President of the non-profit organization All Aboard Wisconsin, which advocates for increased access to public transportation, says the long-distance lines have been one of Amtrak’s most-used services during the pandemic.
“The interesting thing is that the ridership on the long-distance train has not gone down as far as their short-distance, state-supported trains, for example between Milwaukee and Chicago,” she says.
Locally, the cutbacks will mean fewer stops in Portage, Wisconsin Dells, Columbus and Milwaukee. All of those are stops along Amtrak’s Empire Builder line, which stretches from Chicago to Seattle. Currently, the company hasn’t released exact details on how many layoffs will be in Wisconsin, but 1,950 of the layoffs will reportedly be union workers.