Amtrak's President Derailed

National Railroad Passenger Corporation (Amtrak) President and CEO David Gunn listens during a hearing by the U.S. Senate Commerce, Science and Transportation Committee's Surface Transportation and Merchant Marine Subcommittee on the reauthorization of Amtrak Thursday, April 21, 2005 in the Russell Senate Office Building in Washington.
Getty Images/Chip Somodevilla
Amtrak's board of directors on Wednesday fired President David Gunn, saying the debt-laden rail carrier needs "a leader with vision and experience."

Gunn has struggled to maintain Amtrak service amid a sinking financial picture and a push by the White House and some in Congress to recraft it as a group of regional inter-city companies.

"Amtrak's future now requires a different type of leader who will aggressively tackle the company's financial, management and operational challenges," Amtrak Chairman David Laney said in a statement.

"The board approved a strategic plan in April that provides a blueprint for a stronger and more sustainable Amtrak. Now we need a leader with vision and experience to get the job done."

Gunn, who assumed the post in 2002 after having headed transit systems in New York City, Washington and Toronto, could not be reached for comment.

Sen. Charles Schumer, D-N.Y., who has fought against a Bush administration effort to end subsidies for the struggling passenger rail service, praised Gunn as "a brilliant manager."

The senator called Gunn's removal "a crushing blow to Amtrak's hopes for success and reform."

In September, Amtrak's board approved a resolution authorizing splitting off the Northeast Corridor, which accounts for the largest share of the railroad's ridership. That region could be operated by a federal-state consortium.

The Bush administration favors the idea, but critics say it will destroy Amtrak.

Amtrak has never made money in its 34-year history and an operating loss of more than $550 million was expected for the fiscal year that ended Sept. 30. The railroad has a debt of more than $3.5 billion.

The White House has called for an end to subsidies for Amtrak, but the House has approved an appropriation of nearly $1.2 billion for this budget year.

In recent months, Amtrak has been besieged by problems up and down the line, from equipment breakdowns to big-ticket budget woes.

Earlier this year, Amtrak suspended all high-speed Acela service between Washington, New York City, and Boston, due to cracks discovered in the brakes.

A report issued last week by the Government Accountability Office, the auditing arm of Congress, said the company needs to improve the way it monitors performance and oversees its finances in order to reach firm financial footing.

"The company is likely to need outside help in developing a comprehensive approach to address internal control weaknesses and improve the financial information for management and external stakeholders," the report found.

The GAO recommended that the transportation secretary direct the Federal Railroad administrator to: require Amtrak to submit a plan laying out specifically how it will improve its financial operations; provide Amtrak with direction on how to do so; and monitor the railroad's performance and report to Congress on Amtrak's progress.

Transportation Secretary Norman Y. Mineta, who also sits on Amtrak's board, called the report "unusual, if not unprecedented, in the scope of its review and the severity of its indictment." He urged the board to "stop and take a fresh look on how to proceed in the face of this nonpartisan, objective report of systemic failure."