Amtrak to Cut Jobs, Slash Spending by $285M
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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."
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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.
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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.