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Brian P. Gallagher
Director-Operations & Coordination
Office of the President & CEO
Amtrak
Mobile - 202-306-2481

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Begin forwarded message:

From: "Reid, Margaret" <Peggy.Reid@amtrak.com<mailto:Peggy.Reid@amtrak.com>>
Date: February 11, 2016 at 13:05:06 EST
To: "McKeon, Mark H" <Mark.McKeon@amtrak.com<mailto:Mark.McKeon@amtrak.com>>, "Gallagher, Brian" <Brian.Gallagher@amtrak.com<mailto:Brian.Gallagher@amtrak.com>>, "Shaw, Pat" <PjS@amtrak.com<mailto:PjS@amtrak.com>>, "Vinston, Beverly" <BvinstoN@amtrak.com<mailto:BvinstoN@amtrak.com>>
Subject: FW: Philadelphia Inquirer: Internal letter: Amtrak CEO to seek budget cuts

FYI

From: Leeds, Christina E
Sent: Thursday, February 11, 2016 12:59 PM
To: Boardman, Joseph; McHugh, Joe
Cc: Stadtler, DJ; Hardison, Matthew; Duvall, Doug; Reid, Margaret
Subject: Philadelphia Inquirer: Internal letter: Amtrak CEO to seek budget cuts

http://www.philly.com/philly/columnists/jason_laughlin/20160212_Internal_letter__Amtrak_CEO_to_seek_budget_cuts.html
Internal letter: Amtrak CEO to seek budget cuts
Bad weather and cheap oil are are hurting Amtrak's bottom line, and its chief executive is demanding across the board cuts just four months into the fiscal year.
A letter obtained by the Inquirer from Joseph Boardman, Amtrak's president and CEO, to employees said he was seeking an average of 3.8 percent budget cuts from the agency's department heads. It also said more significant cuts are ahead.
"We are going to need to take more aggressive actions to reduce our costs," the letter said. "some of which may be painful to take."
An Amtrak spokeswoman responding to questions about the letter said it would be "premature," to conclude layoffs were in the offing. But the letter highlighted personnel costs as a factor in the budget shortfall.
"Revenues are continuing to decline, and we haven't successfully managed our costs, especially in the areas of salaries, wages and overtime," Boardman said in the letter. "Our company needs cash to pay our daily expenses, and our cash position is becoming a concern."
Oil and water are major problems for Amtrak, according to the letter.
The national average cost of gas, $2, is the lowest since 2009, and more people are driving rather than taking trains, the letter states. He described Thanksgiving, typically a busy time for the rail agency, as, "disappointing."
Meanwhile, flooding on the Texas Eagle and New Orleans routes, along with last month's blizzard that buried the Northeast Corridor in snow, created costly service disruptions.
Amtrak has about 30 million riders annually.
Boardman's letter states Amtrak will make "all necessary investments" for employee and customer safety.
The letter says cost cutting measures will include eliminating non essential business travel, asking employees to conduct business by phone or video conference if possible. Boardman also recommends delaying expensive new projects or making new hires.
Amtrak has revenues of $3.2 billion and requested about $2 billion from Congress for fiscal year 2016, but anticipated an operating loss of $245 million this fiscal year, which began October 1. The agency hoped to increase revenue and keep fixed costs low.

Read more at http://www.philly.com/philly/business/transportation/20160212_Internal_letter__Amtrak_CEO_to_seek_budget_cuts.html#eDEk8MGCDIcoByA6.99

Christina E. Leeds
Amtrak Corporate Communications
60 Massachusetts Ave, NE, Washington, DC 20002
202-906-3059
@ChristinaELeeds<https://twitter.com/ChristinaELeeds>