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tv   Amtrak CEO Addresses National Press Club  CSPAN  July 12, 2017 10:22pm-11:21pm EDT

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reconstituting it from his shorthand. >> in 8:00 p.m. eastern, on the presidency, former "boston globe" journalists on their book, "the road to camelot," inside jfk's five-year campaign. >> i was a junior in college, and it was the first time i ever heard the cord "charisma." and it was because he had charisma. richard nixon didn't have charisma. lbj didn't have charisma. but jack kennedy had charisma. and i think that could have possibly tipped the balance in some people's minds. and smart as hell, too. >> for our complete american history tv schedule, go to c-span.org. the outgoing president and ceo of amtrak, charles moorman, discussed some of the challenges facing the federally supported passenger railroad. following his remarks, he took
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questions at this national press club event. >> now to our headliner of today. he became president and chief executive officer of the national railroad passenger corporation. most people don't say that, they say amtrak. he is the tenth executive to lead amtrak since the company began operations in 1971, prior to taking the helm as a transitional ceo at amtrak, mr. moorman spent four decades at northern suffolk corporation and its predecessor, southern railway. a native of new orleans, mr. moorman grew up in mississippi and educated at the georgia institute of technology and harvard university. last month mr. moorman announced plans to step down from his current role. he served about a year and a half. and he completes his time at
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amtrak at the end of the year, he says that's longer than he originally planned to. we invited him here to talk about amtrak's continuing budget woes, derailments, customer complaints about service, the famous stampede at penn station where 16 people were injured. repair plans for what some commuters are calling the summer of hell in new york city. and the needed infrastructure that the rail industry needs in being required to keep itself open and running smoothly. richard anderson, a former airline executive from delta airlines, somebody from a very different vein coming in and on boarding as an executive, they're now co-ceos, at the end of the year richard will have to put his wings down and put his rail cars on. in the meantime, we're going to
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have have plenty of great questions and answers from our head table and from all of you. don't forget, you have cards on your tables. you can also use social media, so if you want to tweet your questions, you can do that too. and we will try to get to as men as time allows. kevin will help me sort them out. mike smith will help me sort them out. and i have many questions, because we are in the 21st century, on my ipad. so you can actually e-mail them to me if you want to at president@press.org, if you want to quietly whip out your cellphone and do that. without further ado, i want to bring to the stage charles moorman, ceo of amtrak. [ applause ] >> thank you so much. thanks for the gracious introduction. it's great to see all of you. i will say that i have had a lot of great experiences in my life and career. but when i walked down the hall
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out there and see some of the other people who have been at the podium, this certainly ranks up with all of the highlights. so i'm delighted to be here. i don't tweet, so i won't be stopping occasional to put something really smart that i said out. not that i'm going to say anything smart. and the other thing i would say is that it's really, really not that much more expensive to upgrade from that quiet car into first class. think about it. we need the money. [ laughter ] good afternoon, all. i thought i would do three things today very quickly and try to be aware of time. so there's plenty of time to really talk about what you would like to talk about. first, i'll give you a brief subscription description of why i'm here and why i'm doing this. this is primarily so my wife, who may be listening, can hear it again, although i have no
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hope of really convincing her that it was a good idea. the second is to talk about amtrak and how it came to be and what it is, and, equally importantly, what it isn't. because i think there are some number of misconceptions about what amtrak is. the third is to bleed into a little conversation about infrastructure, which i believe is the critical issue that faces not only our company but our country in the future. so that's the plan. let me try to do that in a minimum amount of time. i'll give you a slightly different version of the introduction. i was a kid who loved trains. a lot of kids loved trains. a few never grow out of it. i always say that my mother dropped me fairly early and i hit my head and this was the effect. but nonetheless, that's the way i was built. and so i've had a remarkably
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great life, blessed life in every respect and a wonderful career, including my time at amtrak. i was fortunate enough, as you heard, to get a job with the southern railway. a norfolk southern predecessor, that was in the late paleozoetic area. then had a great career which culminated in being ceo. i stepped down in 2015, we moved to charlottesville, virginia, which is a great place. we have our children and grandchildren all within 20 minutes. it's idyllic. it was idyllic for about a year, and i was extraordinarily happy. so why on earth did i end up doing this? well, it became known that my pretty assessor, joe boardman, was going to be retiring, and my name was being thrown around in the trade press as kind of an ideal successor, if you will.
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and i was approached by the chairman of the board, amtrak board, a fellow named tony koshev, up from the new york/new jersey area, who is terrific. they asked me about do it and i said no. then i made a mistake. i said, but i would be happy to help. so they ran a search, which didn't really work very well. and tony came back to me and finally convinced me, to my wife's utter disgust, to do it for a little while. a little while was defined as a fairly short period of time. and as tony put it so eloquently the other day, i have not adhered to my contract, i am now overrunning my allotted time. fortunately contract doesn't really matter to me because i'm not drawing any satisfactorilar. so there's very little to claw back. why did i do it? three reasons. as you heard, i've been in this industry a long time. and i've been remarkably blessed by the industry.
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and it's an industry that i care a lot about. the second reason, and i'm giving you the noble reasons first, is that i really do believe this is a form of public service. amtrak is important to our country. and it needs to be well-led and well-managed, and i thought i could make a difference. and that, by the way, is exactly why richard anderson is doing the job. in fact i can tell you that in spite of my begging and pleading, he did no better in his contract negotiations for salary than i did. so the unhealthy reason of course is pure ego. it's okay when people start saying he's the ideal candidate for the job. but when you start believing it, it's a bad thing. nonetheless, here i am. so let's start with a history lesson about amtrak. it was really -- it was originated in 1970. it began operations in 1971. to put it in perspective, and i was trying to remember the year,
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don, penn central bankruptcy, '68, i couldn't remember '68 or '69, and the railroad industry was in a state of disrepair. most companies, not southern railway and a few others, were really in very bad condition. infrastructure-wise, finance-wise, everything else. and in fact, the common question back then was should the railroads be nationalized, because they were important and in total disarray. so decline, disarray, particularly in the northeast in the midwest. railroad passenger service was in free fall. the interstate highway system had come along. long danistance aviation had become an important mode of transportation. and the railroad companies, already weak financially, were just hemorrhaging cash and trying to as hard as they could to get out of that business. but they were impeded to that extent because there are public
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utility commissions and others who said this is an essential service, you need to keep running it. it was not a good situation. and amtrak was conceived as this kind of grand bargain, that the government could create an organization, and we'll talk about what kind of organization in a minute, that would create a rudimentary passenger network. it was only long distance trains when it began. it relieved the private companies, the rail carriers, of their obligations, which they were happy to do, and in return they gave equipment and, more importantly, they gave amtrak, now amtrak, the right to run their trains, run our trains i should say, on their railroads for really very marginal cost. and that deal still exists today. it's a deal that i can tell you, after a long career in the freight industry, the current freight railroads aren't that
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particularly happy with. and some of them tend to forget that it was the bargain that was struck. so why do i tell you this? therefore a couple of key ideas. by the way, we then took over commuters, the corridor, penn station where we're having a great summer, in the mid-'70s. after penn central went bankrupt, they formed a company called conrail, which many of you will remember, but it continued to struggle mightily. the next step was to relieve them of what really were money losers, that was the commuter operations. with that came chicago metro and some other things. the first lesson is one that's fairly simple. when people talk about bringing private companies in to run passenger trains, and gee, wouldn't that be a lot better, you know, history has already told us they couldn't do it. so it's not a question of, you know, ability to run a good organization. i'll touch on that.
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it's really a question of the fact that in particular, the long distance, but in general, rail passenger transportation is not a particularly good business mod model. 58 intensive, relatively high labor costs, and you don't turn equipment that well, and you maintain your own infrastructure, which is quite expensive. so that's lesson one. but lesson two and this thing i really want to touch on, amtrak was created, and it's essential in my mind, as a for-profit corporation. now, the people who built it up, created the idea, always knew, right, they knew, not a good business model, this thing will probably never make money. but it was sold at the time to the president and the congress as a concept where yes, just create this, and it will in fact become profitable.
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it hasn't yet. and in some ways, particularly if you look at it on a gap basis, it never will. but it's a corporation. it's a company. and since i have been in, starting last september, my mantra to everyone, to the outside world and more particularly inside the company, we're going to run it luke a great company, right? we're going to benchmark ourselves against the best private corporations, right? the norfolk southerns of the world, the deltas of the world. because we can do that. and if we do that, then we'll deliver great service and we'll minimize the amount of money that we require from the government, which does, by the way, two things, one, subsidize our operating loss, and then pay for our contaminaapital expendi. what does that mean in terms of
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running a great company? when i came in, there was a good amount to do. i started off with what i thought of as the four tier 1 issues to deal with. there are tier 2 issues, there are tier 3 issues. i've identified a couple of tier 7's. i'm not really losing sleep on anything below 2 right now. but what do we need to do? we needed to organize appropriately so that we had a functional organization with people responsible and accountable for things in a way that made the most sense from running the railroad and running a passenger-focused organization. and once we organized, get the right people in the right jobs. just business sense. second, really critical. focus on creating a strong safety culture. amtrak is reasonably good at safety. and i'm talking primarily about safety of employees but also safety of the public and --
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traveling public and safety of our communities. but we can do a lot better. i've been around great safety cultures and seen them, and that's where we need to take the company. and under the very capable leadership of scott down here, our chief operating officer, we're starting to take very meaningful steps to create that culture. but culture changes takes a while. and you never stop in order to do it. third, on top of that, create a strong focus on what i like to call operational excellence. delivering what we do efficiently and effectively, right? and a strong safety culture enables you to build a strong operational excellence culture. so that's number three. and we're driving that way i think now, again, a lot of work to do. but this is something i've seen and richard anderson has seen, and he will be great at doing this. fourth, and you referred to
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that, a couple of these issues, get back to focusing on the customer, and the customer experience. you know, and customer experience defined as ticketing, right? stations. our employee interactions, be that with an on board attendant, be they with a conductor, assistant conductor, station agent, whoever. and last, our equipment. those who ride the train may have looked around on our equipment and said, you know, it looks a little stale. we can do better than that. and we started some activities that will in fact start to make our equipment a lot better. it's old, but old doesn't mean it can't be good. more of you have flown on 40-year-old airplanes than you realize, because when you walk in, you don't say to yourself, man, this thing looks like it's 40 years old. in some cases you say, this looks like a new airplane. and we can do that. it's not that expensive. it's not that hard. but it just requires that
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mindset of, think about our customers. that's what great companies do. in a very real sense, amtrak is a government contractor, just with a different business model. we're just like a defense company, defense contractor. we're just like a highway builder. the only problem we have is that unlike those companies who can bill the government directly and bill them enough to have a profit margin, pay their shareholders, do all of those great things, we rely on user fees, passenger fares. because the marketplace doesn't sustain the passenger fares we need to make that profit, we ask the government to make up the difference. having said that, we need to understand, as i keep saying, that we are a company. so the point i drive home is that a problematic business model is absolutely no excuse
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for not being great. and that's where i'm trying, we're trying, towards amtrak. let me very briefly tell what you amtrak is today. in addition to -- and this is my ask of all of you. next time you say -- somebody says, well, amtrak is a government agency, just say, no, no, no, it's not. it's a very different animal. so let me tell you about our businesses. let me look at each one of them. i'll start with long distance. you may have seen, most of you have seen the trump administration's proposal, which is to defund the long distance business. and the long distance business is what people think of, right, when they think of amtrak. it's why we were created. but if you look at the numbers, it's about 15% of our ridership. it's only about 23% of our revenue, and that's typically because people ride a little bit farther. and it is what defines our company to most of the nation.
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in the very real sense, it's also the political glue that holds us together, because it turns out we get a lot of support from members of the house and senate on both sides of the aisle in places where we run passenger trains. their constituents like it. it is the big money loser. >> you have to understand amtrak accounting. and this is the other thing we're up on the hill talking about all the time. we're like any other company with a network cost, right? we have direct expenses which are paying for crews, paying for fuel, how much it costs to get the train from a to b. then we have allocated costs. if you look at the direct costs to running the long distance network, it's $500 billion in revenue, a little less than that in expenses. most of the loss is allocated cost. the problem is allocated cost, of course, is if that funding
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gets cut on the long distance side, we lose that $500 million in revenue. we still have labor protection for a few years, which is substantial. and all those allocated costs just get dumped over on the other two businesses. so the net result of cutting financial support to the long distance business is, we need more money from congress. not a good outcome. i believe there's a mission for the long distance trains. we serve a lot of underserved parts of this country. but you can have an argument about whether or not the government should be in that business. but defunding it in the way that's proposed would be extraordinarily problematic for the company. next business, state supported trains, state support trains directly, 18 states support trains directly. it's a growing business. it's 50% of our ridership, right on state-supported trains.
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so it's a good business. and it's only 22% of our revenue because most of it is short haul and we don't always control the fares. the states make up a good bit of the operating loss. but by design, we subsidize the states to some extent. so while it doesn't lose as much money as long distance, it does lose some money. but it's where the growth opportunities are and where i think passenger rail goes, right? i ride the train from chore l s charlottesville to washington most days because i would rather ride the train, in fact i would rather have a root canal then get on i-95 and come up here in the mornings. and those trains are full because a lot of people feel like i do, right? so, the last piece is the corridor. the northeast corridor.
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19 it is 35% of our ridership, 55% of our revenue. we have a first class product in the acela, which does very well. and the corridor, even after allocated cost, generates cash. it would not be profitable on a stand alone gaap basis. but it is the cash generator for us. last year the operating loss at amtrak was $230 million. that covered -- we covered 94% of our operating cost. you look around the world, that's a remarkable number. so it's not like we don't know how to run a railroad. the corridor is great, but it leads me to the last thing. infrastructure. if i worry about one thing at amtrak, it's infrastructure. and it's the northeast corridor. on the long distance network, we run on the freights, on the host railroads. which ed so ably represents. i've known him too long.
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that creates problems for us sometimes in terms of freight train interference and things like that. here is the good news, putting my freight hat on. the one piece of infrastructure in this country that's in great shape is the freight railroads. there's been enormous investment, freight railroad infrastructure is in the best shape it's been in 70 or 80 years. the corridor, not so. the track is okay. ride quality needs to improve. the signal system is old. the overhead wiring, we have some 80 years cattena 80 year od catenary. and then the micro come cosm of
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is the gateway programs. a lot of it is double tracked. it's the busiest part of the railro railroad. we run 24 trains an hour in each direction through the two tunnels under the hudson river. so we have huge capacity limitations. we have 200-year-old bridges in that eight and a half miles. the deterioration of these tunnels, which were opened in 1910, has just started to accelerate. so as a result, we have what we call the gateway programs. and it's a series of projects, bridges, track expansions. two more tunnels under the hudson so we can fix the two we have before they go out of service. and ultimately an expansion of penn station.
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and as i was saying earlier, you look at penn station today. for eight hours a day, it is doing things that it was never, ever designed to do. so it's our essential must-do work. the good news is that we've been talking a lot about it, including the fact that that area is 10% of the nation's gdp. and in the latest house-proposed budget with lots of thanks to chairman diaz-balart and chairman frelinghuysen, there's money for gateway. there's some substantial money. it's a long way to go, but it's an indication that people have started to realize how important it is. and i should say, we have strong bipartisan support in the house, and we have great support in the senate as well. not only from senator schumer and senator booker and all of the folks from the northeast, but even out west and other
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places. so i'm optimistic that we'll do gateway. but the long term prospects for amtrak mean that some day or another, we have to have a secure funding source to run the company, rather than year by year, wondering what it is we're going to get. and in the same way, and i'll close on this, i firmly believe that our country needs to step up on all of its infrastructure. on our highway system and its bridges, on some of the water way system and the ports. everywhere you look, there are huge needs. and if we don't address that at amtrak and everywhere else, my great concern is that in 20 years' time, what has been the great competitive advantage that's driven our country forward really since the second world war becomes the great competitive disadvantage that holds us back. so i've rambled.
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i didn't go too long. hopefully i've left time for a few questions. make 'em easy. [ applause ] >> thank you, i appreciate it. several questions have been coming in, that came in before today's luncheon, and some that are coming in fast and furious on cards, and of course via twitter. that's why all these devices are going on up here. you talked about congressional support. there seems to be a pretty pitched battle going on. the president of the united states campaigned on infrastructure, you talked about it in your remarks. yet members of the freedom caucus are trying to cut a lot of that funding.
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and yet there is -- there are people trying to reduce your rural service, the air service. cuts are coming in left, right, and not necessarily yet being delivered. how are you compensating for those competing forces going on the hill and the white house? >> well, it is a great question and of course i have to give an apolitical answer. >> it is just about money. >> yeah. it is always about money, right? you know. if you look at the history of amtrak, this is nothing new. i mean if you look at the trump proposal, right, 20 years ago there -- the proposals coming out of the administrations were shut down amtrak, right? so the trump proposal is, gee, we have this one thing that we don't think makes sense, let's not spend money on it, the other things they actually support. i am actually an optimist about the administration in terms of our conversations with secretary
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chou and d.o.t. about gateway because i think the president comes from new york, he understands the situation up there. you know, it is all -- you know, it is a long, long process. we'll work our way through it. we will make our case, and i'm pretty -- i'm an optimist. i think we will continue to be funded to do what we do. let me say this though. the better we run amtrak, the better we deliver on projects, you know, the more people understand how good our company is, the easier every funding conversation gets. >> you got into this a bit, but what steps is amtrak taking to ensure that there are no more summers of hell, and that is beyond trying to push for a different name when major updates are required? >> that's a start, right? well, that's pretty easy. you know, it is a big outage.
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we are addressing the most difficult place to renew in penn. i think that we just have to continue to educate people about the necessity of renewing these assets and the fact that at times assets -- you know, we have -- people have to do a lot of work. the interesting thing is that the new chairman of the mta which controls sub ways, long island and nmetro-north as you all know, joe lota came out because the subways in new york are having a bad time these days and said, you know, we have to take longer outages to fix them. we thought, boy, what an idea. i think the public understands if you explain it and you don't use rhetoric that might be viewed as inflammatory, that these kinds of projects are essential. amtrak will continue to work to make sure we have a great railroad in terms of its infrastructure so we can deliver
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reliable service. what people hate, what commuters hate is when you have an unplanned disruption. this summer while there are disruptions, they've known about it a month in advance. long island and new jersey transit have done a great job of saying, here are alternatives. knock on wood, right, we're two days in, but by and large the commuters have figured it out. people figure it out if they know what's going on. >> just to split a micro focus on the penn project -- >> right. >> -- is it going to be on time? i know it just started this week, but do you have a sense of the timetable, when it is going to be all done, when things will be back to normal? >> well, we told everyone we will be back at labor day. there are three reasons why i'm very confident that will happen. the first is we've done an exceptional and extraordinary amount of planning on the engineering side. we know we have all of the
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material. we know it all fits. we have everything planned out. second, we have a lot of skilled people who do very difficult work down in the bowels of the station and do it very well. we have the staff, we have the resources, we have the people who can do it. the third is we do -- if things start to for some reason look like they're running behind towards the end, we have the ability to step in at the end and button things up and then finish out whatever we don't get to in subsequent weekend outages. so labor day is it. >> so if it is late we can call you back here? >> absolutely. >> okay. >> absolutely. call richard. [ laughter ] >> derailment. in terms of the broader safety picture, there's a lot of questions here about rail safety. >> right. >> what are you doing to prevent what happened in philadelphia a couple of years ago and other
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derailments, you hear about them locally, and they're unfortunate with a derailment or somebody is unfortunately hit by a train. what specific steps are you doing to address the safety culture? >> so what we started with in the safety culture itself, to go there, is to kind of recalibrate our entire safety program, to introduce serious new elements of responsibility and accountability for all of our employees. an element i think had not been strong enough. we are in the process of doing the very first round of training for our operating supervision, and i think we have the right program in the hand. i will tell you the former chief operating officer of norfolk southern has come down to assist us, to put all of those programs together as well as some other people.
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in terms of the incidents you mentioned, you know, the tragic accident up in philadelphia, we now have the technology on the entire northeast corridor that would prevent an accident like that. derailments, there are a few -- we have relatively few derailments and, you know, we just need to stay focused on the infrastructure, and in particular the infrastructure in our terminal which is where you're more likely to have one of those derailments. those are typically at low speed, but nonetheless they're disruptive and so we have to stay focused on getting those locations like penn fixed. >> they say all politics are local. i remember when i walked out of my newsroom some of my colleagues and i heard this from other members and in e-mail, what are you doing to get the prices down? sometimes the fees feel like plane fares. >> that's good.
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>> meaning too high. >> no. >> i mean people are saying -- they question, they say, hey, the fares are too high, can we get them down or at least keep them steady, because at that point i might as well hop a plane. >> well, okay. let me answer that, right. of course, an airline guy is coming in, and i think he would give exactly the same answer. we compete in a transportation marketplace. so if you look at new york to washington and new york to boston, kind of the same although it is a slightly slower trip. all of you know this, you know. downtown d.c., union station to penn station, two-and-a-half hours, something like that. we compete very well with the airlines because -- hands up -- how many people really enjoy being at laguardia airport? all right. >> well, that's not fair. you're a train guy. >> that's what i'm saying,
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right? we say this all the time. you know, i mean we're talking about no middle seat, right? i mean there's -- we have a lot of competitive advantages, and it is incumbent upon us as a good company and as a good steward of the taxpayers' money to compete effectively in that marketplace. that means price so that we realize the maximum amount of revenue for the service we offer. we have 70-plus percent market share of commercial transportation between new york and washington. so i do understand it. by the way, let me say this, we are looking at doing some creative things in terms of creating an economy class, if you will. but, you know, it is -- the seat pitch will look more like pick an airline, right? and there will be some other things that just don't make it quite as comfortable. the other thing i would say in terms of value for money, isn't it relaxing to be on that train? you know, look out, see the
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country go by. >> it is. go ahead. i happen to like both. all right. so just getting back to some other things about infrastructure -- and you talked -- and actually more back to money. you said early on in your remarks that you would love to have more money, but every good manager should be looking for ways to improve efficiency and cutting things. a lot of your predecessors have been expanding and retracting service, expanding and retracting. where do you cut and not have customers cry foul? >> you know, let me say that is a great question. no, i would tell you that i think because -- without it being anybody's fault, amtrak particularly in the '90s and the 2000s was under enormous economic pressure because we
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went through a series of administrations that wanted to cut all of the money, and there's still a lot of economic pressure today. i think that the company in some of its costs lost sight of the passenger, lost sight of the customer. i will give you an example. someone some years ago made a decision, you know, we just won't shampoo the carpets as often and it saved a million dollars. but, boy, you get on and you say, wow, that carpet hasn't been cleaned in a while, and that's not the experience we want to create for our customers. so where we're focused right now and where all of our conversations are is, yes, we want to be like any other great company, we want to be efficient and effective. we always want to be looking at ways to reduce cost, but we want to do it in the places that don't have that direct customer impact. that's the mindset i think that we all have, certainly the senior team has, and those are the processes we're going through. >> this is a bit northeast
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corridor focus. would the problems getting in and out of new york this summer be less severe if governor kristie had n christie had not cancelled a tunnel project in 2010? that's not political. >> i have answered a lot of questions recently by saying i understand the governor's frustration. i can't quite wrap that one in. you know, look, that was before my time, and the so-called art tunnels where it was a plan that would have certainly given -- given us two more tubes under the hudson. the plan in its final incarnation would not have gone into penn station. it was a separate new station just to the north of penn. so in that way it was -- it was flawed because it would not have allowed us to shut down the other two tunnels one at a time
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and rehabilitate them. the original art tunnel alignment went into the new station and penn. if that had happened, we would not be where we are today. >> more northeast corridor question. i promise there are others. >> i'm so used to these. >> the high speed rail improvement project between new brunswick and jersey and trenton, new jersey was supposed to be complete by last month, but the project's delayed and the amtrak inspector general found the project was delayed by "gross mismanagement of funds and resources." when will the high speed rail upgrade be complete on the northeast corridor and should commuters be concerned that the penn station upgrades could be plagued by the same delays and mismanagement? >> so here -- here's the deal on the high speed rail project. there are a lot of issues that happened with that. it was a project that was
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conceived some years ago, and i'm giving you all history. i wasn't there. it was conceived in haste and it was difficult to understand exactly what was going to be accomplished, and then it was -- the ig says, not particularly well managed. it will be a few months more. it is very close to completion, but the important thing to understand is we have completely re-don all of our program management infrastructure. we have now an executive program management team that dictates program management standards, and there are standards and there are tools to make sure that we're managing everything consistently and that we have good people managing those programs. i feel much more confident about our ability to deliver projects on time and on budget as a result. the second thing, as i said, no, i don't think that what happened with new jersey high speed rail has any correlation at all to what we're doing at penn. >> when will an order be
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executed by amtrak to purchase new long-distance passenger locomotives and cars to replace its current long-distance passenger train fleet that is, as you indicated earlier, seen better days and can't run forever because the current fleet looks just about worn out? >> going to look a lot better soon. two years for the northeast regional for the refresh. you know, these are old assets, but i'll go back to the airline business and the freight railroad business. we at norfolk southern started a process of rebuilding a lot of our diesel locomotives. it's been very successful and we're looking at the same thing at amtrak. what did we decide earlier? it is all about the money, right? it is just when can we get the funding to start ordering new equipment. but i am a great believer in self-help. i am a great believer that we
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can take our existing assets and extend the lives and make them more reliable and more customer friendly without having to wait around for someone to write a check to us for a whole bunch of new locomotives. that's the path we're going down. so that day will come. until that day, you know, we will use our capabilities -- and we have considerable capabilities -- to keep our equipment performing well for our customers. >> time to move out to the midwest and beyond. your predecessor spoke here about the need for a key railway intersection around chicago. what status is that effort? >> well, ed hamberger can answer that as well as i can. >> we can bring him up. >> no, no, no. >> he's turning red over here. >> no. it is the create project, and there's been a substantial amount of work done on create. it has been a partnership
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between the railroads, including amtrak, the state and city and then with some federal government money as well. the federal government money, for example, in my old life at norfolk southern bit a flyover which got 80 some metro trains out of the way of 60 some norfolk southern trains every day. so there's been substantial improvement. there's a great big project out there that's left called the 81st street zip. what's the price tag? 75th street zip. it does include 81st. thank you, ed. what's the price tag? [ inaudible ]. >> 1.4 billion. >> 1.4 billion, yeah. but a lot of great work has been done. it is a great project and chicago is much better from a railroad standpoint as a result. you have seen that in the interchange times for freight
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cars at chicago come down, the average interchange time. >> quite a few questions about comparing the u.s. rail system to those elsewhere in the world. why does the u.s. seem to be behind asia and western europe with respect to high speed rail transportation, and that goes into autonomous trains. i mean there's three or four questions that get into the whole notion of why can't we just be like the euro star or something like that? >> i get that a lot. the most frustrating thing is then it is usually tied to, gee, if we just didn't have amtrak we could be like western europe. no, right? if we spent $100 billion on new rail infrastructure, then we could be like europe. one of the key kind of simple-minded lessons of railroading is that when you look for high speed operation,
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which the europeans and the asians have committed to and some others, what it is all about is two things. one is the geometry of the railroad, because the japanese -- and it is the 50th anniversary of amtrak in four years. japanese figured out with motor technology you could pump enough horse power into a train so that hills didn't matter. you could go up just as fast up as down a hill, and that was a change. curves slow trains down. so every one over there that runs high-speed trains, all right, has bit brand-new alignments that are for the most part dead straight, and then they keep -- there are no commuters on them, right? there are no freight trains. there's no nothing else. if the u.s. had made a decision to go in that direction rather than invest what it has in the
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interstate highway system, we would have a lot of high speed trains. it is just that simple. it is a government priority to invest in the railroads in other places where it is not here. just that simple. >> but do you see private sector or public/private partnerships? do you see anything that begins to push us in that direction, or is congress too entrenched to go there? >> i think there's some opportunity for some private investment, though in my mind the most likely true high speed operation in this country may well be what is planned in texas between houston and dallas because, you know, you can get out, you can go straight, right? it is flat. there's a lot of farmland in there, although i think they're running into the fact that farmers don't want to sell their land necessarily. and the japanese are sponsoring it. now, there's a lot of question
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about how much real private money goes into that versus public in some way or another, but the difficulty -- people ask this about gateway all the time, what about public/private partnerships because, as you know, that's what the administration talks about, right? it is difficult to toll a tunnel, you know. we can do some things, and i welcome private investment. i think private investment brings all kinds of good things including discipline to projects, but it is just difficult to see how you make the numbers work. >> cyber security and terrorism come up. mike rogers, who has been here to the club, like to talk about books here a lot. >> talk about me? >> we will. >> in a good way? >> in a good way. not so much if you're late with penn station. kidding. >> no pressure. >> cyberattacks. >> yeah. >> admiral rogers talked about here happened almost every day,
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and he said at this podium to my predecessor, thomas buress, it is not a matter of if but when. so what does that mean for amtrak? how are you preparing for it? you know, how are you coping with it to the degree you can talk about it? >> i think we can talk about it a fair amount. we are very aware of cyber threats. we have scene substantial initiatives with our i.t. group in terms of the commonplace things, right, the 24 monitoring of everything that's coming into the company electronically. you know, whatever the percentage is, discarding 98% of the inbound e-mails and trying to sniff others. we have a lot more to be done there. i think if you look at amtrak -- and this is where we're fo focused -- i think the threats to us come in a couple of different directions. one is just the ordinary kind of threat -- i mean theft speck
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tospeck -- spector, getting credit card. amtrak has been in compliance with all of the credit card handling standards out there, keeping those safe. we are moving to a new technology we don't keep credit cards. we keep a code that's not translateable into a credit card number. the other is -- and this is a big thing for industrial companies, the so-called industrial control systems, right? so we're talking about dispatching. we are talking about the power management and things like that, and we have a lot of work underway. the other thing i will just say in terms of kinds of those threats is the other question we get all the time is about terrorism on the trains. i will say there's a multi- -- when i got here i was very impressed. there is a multi-level system that's constantly watching out
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for that. you know, you will see it and have seen it -- if you go to union station, the first thing you will notice is there's a large uniform willed presence t right, primarily of amtrak police but there are a lot of other people in there, many of whom you won't notice, who are watching everything that goes on. we are very tied in to all of the security agencies and constantly monitoring the threat level. you know, nothing keeps you absolutely safe. that's the unfortunate fact of life for all of us, but we are doing a lot of i think good work to protect the traveling public. >> do you see a time where americans will embrace rail transportation like their european counterparts? >> i think that -- the way i put it is there are a lot of great people at amtrak, and for 46 years, for a large part of the 46 years a lot of people were there trying to kind of what i would describe as keep the flame
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alive, right? understanding that some day people -- the world would come to the point where people started to say, you know, we really need to have passenger rail as an option for transportation. i think that that day has come. i think it takes a while. i don't think it necessarily ever means high speed trains between, you know, washington and new orleans or chicago. that may be a while. but what we're going to continue to see is things like i mentioned, you know, more and more corridors in particular where people want to travel into -- from an urban environment to an urban environment, or into an urban environment where all of the other problems with our infrastructure -- particularly the highway system -- make that a painful experience. that's a sweet spot for us and that's a place where all of the states want to hear more about what we can do. >> some public service
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announcements before we get to your last question. for those of you who may have joined us later in the telecast, the radiocast, on the internet and here in the ballroom, some things coming up, we talked about house freedom caucus chairman mark meadows will be here on july 24th for a headliners luncheon. headliners news maker on july 25th with jom thompson. headlines luncheon on july 27 with u.s. army chief of staff john millie. and annual national press club journalism awards dinner on july 28th. before i give you the last question i am going to give you our customary national press club mug. >> thank you. very nice. >> you take that with you, and we in return keep that lovely picture of you that you signed earlier before the luncheon. it will go on the wall with the rest of the speakers so people can admire you along with everybody else outside.
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there are lots of fun movies about trains, "strangers on a train, n"north by northwest," "throw mama from a train." >> that's not an amtrak recommendation. >> no. what is your favorite train movie? >> oh, my god. oh, which one -- the john candy and -- "trains, planes and automobiles." i thought that was a very good movie. let me just -- by the way, since i'm constantly sell inghing amt go back and watch "north by northwest" because you can recreate that experience today on our empire state service. give it a try. [ applause ]
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>> for these -- for transcripts and other information about our national press club headlines, activities, go to www.press.org. thank you very much. we are adjourned. [ applause ] federal reserve chair janet yellen will take questions from the senate banking committee tomorrow about the country's economy. we'll have live coverage as she reviews the semiannual monetary policy report and its potential economic impact. it starts at 9:30 a.m. eastern here on c-span3. online at c-span.org or listen with the free c-span radio app. in the afternoon, the national governors association's summer meeting in providence, rhode island. governors will discuss the
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opioid epidemic and prevention and treatment efforts. live coverage starts at 4:00 p.m. eastern, also here on c-span3. with the help of our comcast partners this weekend, the c-span cities tour takes book tv and american history tv to concord, massachusetts where the first shots of the american revolution are fired, and then less than a century later a writer's revolution takes place as the town becomes home to ravel waldo emerson, henry david theroux and luis ah may alcott. saturday on book tv we will take you inside or chad house where louisa may alcott live and wrote the ground breaking book "little women." then explore "walden pond," and the old man where ""nature" was written. >> the old manse is a house of two revolution.
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it was the beginning of the american revolution just through the windows down the hill, and later the second american revolution of intellectualism and thought. it is really a house that has such great history to it. on sunday at 2:00 p.m. herein on american history tv we will take you to the north bridge where the battle of concord began in 1775. >> this is what is considered to be the beginning of the american revolution because it was here that americans, colonial militia if you will, and the british regulars will encounter one another, shots will be fired, lives will be lost on both sides, but more importantly it is where the colonial militia was ordered to fire upon the king's troops, creating in essence an act of treason. then see the world's largest collection of materials used during the earliest days of the revolution displayed at the concord museum. watch c-span cities tour of concord, massachusetts saturday
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at noon eastern on c-span 2's book tv and sunday at 2:00 p.m. on american history tv on c-span3. working with our cable affiliates and visiting cities across the country. the librarian education minister talks about some of the pros and cons of partnership schools in the country. these schools are also referred to as psl and are similar to charter schools in the u.s. following his remarks at this american enterprise institute event, he participated in a panel discussion. >> thank you all for coming today.

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