WASHINGTON – Amtrak said Friday it would slash spending by $285 million this year and eliminate 4 percent of its work force to stem losses that totaled $1.1 billion last year.
The national passenger rail system broke down its latest austerity plan by saying it would defer $175 million in capital spending, and reduce operating costs by $110 million. The company said it also may eliminate all of its money-losing routes by October.
"Everyone knows you cannot make a profit while running a network of unprofitable trains," Amtrak President George Warrington told reporters at a news conference. "That is exactly what we are expected to do."
The job cuts would come from union and non-union ranks and total about 1,000 employees, Amtrak said. The railroad employs 24,600 people.
The financial board overseeing Amtrak's finances is due to submit a restructuring plan to Congress next week. That plan will propose a remedy that could allow private companies to bid for Amtrak routes.
That board, the Amtrak Reform Council, determined in November that Amtrak would not meet a deadline Congress imposed for it to operate without massive federal help by the end of this year.
That conclusion was largely affirmed in late January by the Transportation Department, which said Amtrak's operating loss was $1.1 billion last fiscal year. That was $129 million more than the previous year.
The government said the railroad's cash losses, a more reliable measure for determining how close Amtrak is to meeting its goal of self-sufficiency, were $585 million. Amtrak must reduce its cash losses by more than $300 million to meet its self-sufficiency deadline.
Amtrak said the spending and job cuts were necessary to counter a shortfall in revenue due to the recession, security costs undertaken after Sept. 11, and the loss of $52 million in financing related to the reform council's decision on self-sufficiency and restructuring.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox