Wednesday, April 14, 2004

Making Nice With Big Rail

WASHINGTON, D.C. - No one promised David L. Gunn an easy ride when he took over as Amtrak's chief executive two years ago. The government-owned passenger railroad, which last year lost $1.3 billion on sales of $2 billion, faced financial and organizational disarray, outspoken enemies on Capitol Hill, and at least a decade's worth of deferred maintenance projects.

But Gunn--a Harvard Business School graduate who in his career has headed up transit systems in New York City, Philadelphia, Toronto and Washington D.C.--has on the whole earned high marks for his focus on fixing Amtrak's bookkeeping, thinning its bureaucracy and coming clean with Congress about the railroad's needs for staying viable. Gunn, 66, seems also to have won the admiration of one of Amtrak's most important business partners: the freight railroads.

"He has certainly tried very hard to improve relations," says Thomas White, spokesperson for the Association of American Railroads, the freight industry group. "I think we're all appreciative of that." H. Craig Lewis, vice president for corporate affairs with Norfolk Southern, adds that "a lot of people from Amtrak and Norfolk Southern have had a part in improving this relationship, but the single most significant catalyst to it all has been David Gunn."

Says Gunn: "I would characterize our relationships as pretty good."

"Pretty good" looks downright remarkable given the evolution of freight and passenger rail in the United States over the last few decades. Amtrak, or the National Railroad Passenger Corporation, was created in 1970 when Congress, looking to save America's inter-city passenger rail network, gave the big railroads a chance to unload their money-losing passenger operations. To do so, however, the railroads agreed not only to let Amtrak operate anywhere it wanted, but also to give preference to Amtrak trains on their networks.

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