WEBVTT - Amtrak President Roger Harris Talks Investing $4.5B into Upgrades, Northeast Corridor

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>After achieving records in both ridership and revenue, Amtrak is

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<v Speaker 2>ready to invest four and a half billion dollars in.

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<v Speaker 3>Some major upgrades.

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<v Speaker 2>The problem is the Trump administration has a proposed major

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<v Speaker 2>cuts to subsidies for the Northeast Corridor. So how is

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<v Speaker 2>that going to affect really Bloomberg clients and viewers who

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<v Speaker 2>use this product so regularly.

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<v Speaker 3>Joining us now to talk about that.

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<v Speaker 2>As Amtrak President Roger Harris, Roger, great to have you on.

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<v Speaker 2>I know everybody in this office and certainly many of

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<v Speaker 2>our terminal users and Bloomberg television viewers and Bloomberg Radio

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<v Speaker 2>listeners uses your product a ton because we're always going

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<v Speaker 2>back and forth between Boston and New York and Washington, DC.

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<v Speaker 3>It's really important.

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<v Speaker 2>How will the Trump administration affect what you're able to invest?

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<v Speaker 4>Well, thank you, Matt, and first of all, thank you

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<v Speaker 4>for having us on today to talk about what's going

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<v Speaker 4>on in Amtrak. As you said, we've had a record

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<v Speaker 4>ridership and revenue in the past year, in fact in

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<v Speaker 4>the last few years, and we've really seen that all

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<v Speaker 4>across the country, not only in the Northeast Corridor, but

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<v Speaker 4>also in places like Washington State.

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<v Speaker 5>Oregon, North Carolina, Virginia.

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<v Speaker 4>Even our news service in Midwest between Chicago and the

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<v Speaker 4>Twin Cities carried almost a quarter.

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<v Speaker 5>Of a million cust Elian's first year.

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<v Speaker 4>But specifically about the Northeast Corridor, our capital spending has

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<v Speaker 4>increased between twenty nineteen and this year from eight hundred

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<v Speaker 4>million to four point five billion. And really this is

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<v Speaker 4>not so much a question of less money for the NEEC.

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<v Speaker 4>It's a change in the sources and fundings of the

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<v Speaker 4>projects that we're building.

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<v Speaker 5>So traditionally.

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<v Speaker 4>A lot of the Northeast Corridor investment was funded from

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<v Speaker 4>the operating earnings on the service, and during COVID, Congress

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<v Speaker 4>appropriated more money for the Northeast card or to help

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<v Speaker 4>underwrite the operating losses of the curd bed. And what

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<v Speaker 4>we're seeing now in the f y twenty six budget

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<v Speaker 4>is really kind of a return to what the normal

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<v Speaker 4>balance is between operating earnings funding some of the work

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<v Speaker 4>on the Northeast carridor right versus our annual appropriation.

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<v Speaker 1>We'll talk to us a little bit more about how

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<v Speaker 1>you're going to make up for that. I hear what

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<v Speaker 1>you're saying that we're just going back to maybe pre

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<v Speaker 1>COVID levels when it comes to, you know, the subsidies

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<v Speaker 1>for the Northeast Corridor. But even still, where do you

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<v Speaker 1>plan to find the funding sources to make up for

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<v Speaker 1>that going away?

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<v Speaker 5>Basically, well, I.

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<v Speaker 4>Think there are two ways to think about this. One

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<v Speaker 4>is what I said, which is the increase in operating earnings,

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<v Speaker 4>so that's you know, hundreds of millions dollars a year

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<v Speaker 4>that goes towards these projects. But the other thing to

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<v Speaker 4>think about is that the the split in our appropriation

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<v Speaker 4>from Congress it talks about the Northeast cardor versus the

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<v Speaker 4>National Network isn't about where the assets are exist so

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<v Speaker 4>much as it is the types of trains.

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<v Speaker 5>So there are trains in.

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<v Speaker 4>The National Network that come from states like Pennsylvania and

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<v Speaker 4>Virginia that operate on the Northeast Corridor, and the operation

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<v Speaker 4>of those trains can contribute the funding, and that appropriation

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<v Speaker 4>contributes to their reinvestments on these assets. So it's not

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<v Speaker 4>quite a perfect alignment between which account, which account the

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<v Speaker 4>assets are funded from, and where the trains are operated.

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<v Speaker 2>There seem to be a lot of projects that Bloomberg's

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<v Speaker 2>reporters here are focused on We've got some brilliant questions

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<v Speaker 2>from Ted Man, so shout out and thank you to him.

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<v Speaker 2>The Frederick Douglass Tunnel in Baltimore is one that the

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<v Speaker 2>Republicans are making a lot of noise about potentially changing

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<v Speaker 2>that project. Is is that going to go through The

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<v Speaker 2>Susquehanna Bridge in Maryland needs to be replaced, the Connecticut

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<v Speaker 2>River Bridge. Are all of these projects that we're so

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<v Speaker 2>focused on.

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<v Speaker 3>Going to continue to be funded.

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<v Speaker 4>Yes, you know, one of the things that's going on

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<v Speaker 4>is we're working with the administration and trying to understand

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<v Speaker 4>where there's a lot of common ground on these projects,

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<v Speaker 4>because it's been made really clear to me and to

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<v Speaker 4>the you know, the other members of Amtrak management that

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<v Speaker 4>the administration is really interested in us running an efficient,

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<v Speaker 4>reliable service and building great infrastructure.

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<v Speaker 5>So you mentioned the Conneticut.

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<v Speaker 4>River Bridge where which we're building up near Old Saybrook

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<v Speaker 4>in Connecticut. Just a few weeks ago we got the

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<v Speaker 4>grant for funding that project obligated by the administration when

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<v Speaker 4>they were very clear on the fact that they want

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<v Speaker 4>to get that bill. We continue to talk to them

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<v Speaker 4>about the Federick Douglas tunnel, and we're working on ways

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<v Speaker 4>to produced the total project fasts and we've come up

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<v Speaker 4>with a lot of good ideas and we're working through

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<v Speaker 4>them with them. We also had a project in Newark,

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<v Speaker 4>New Jersey to Dockbridge where we came up with some

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<v Speaker 4>great ideas on how to reduce the total couse of

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<v Speaker 4>the project and we got a good shout out from

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<v Speaker 4>the administration. So I would say that the challenge here

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<v Speaker 4>is finding out where the common ground is which and

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<v Speaker 4>there's a lot of that, there really is, and getting

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<v Speaker 4>the projects built.

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<v Speaker 2>You know, last month I made the mistake of trying

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<v Speaker 2>to take a plane when I needed to travel to Virginia.

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<v Speaker 2>It ended in tears and pretty much a lost weekend,

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<v Speaker 2>And the next week I was smart enough to take

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<v Speaker 2>the train instead. It's a far better way to travel

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<v Speaker 2>when you don't want to sit in the airport for

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<v Speaker 2>nine hours and then find out that your flight is

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<v Speaker 2>finally canceled. Are you able to take advantage of the

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<v Speaker 2>chaos that US airlines caused in travel because it's just

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<v Speaker 2>so much easier and more reliable to take the train.

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<v Speaker 4>Yeah, absolutely, Matt. You know, we we look at the

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<v Speaker 4>amount of traffic that we compete with the airlines on

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<v Speaker 4>and that's not really our primary focus.

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<v Speaker 5>We want to get people out of their cars.

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<v Speaker 4>But you know, what we want to make sure we

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<v Speaker 4>do is that we have a reliable service and that

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<v Speaker 4>we communicate with our customers.

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<v Speaker 5>We have great new Asseller trains. I don't know if

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<v Speaker 5>you want to talk about that.

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<v Speaker 4>Right this min it, but we have brand new asselog

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<v Speaker 4>that we are, you know, in the final steps of

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<v Speaker 4>getting approved. I think you've heard that from us before,

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<v Speaker 4>but we are extremely close now. The file approvals from

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<v Speaker 4>the Federal Road Administration earlier this week, and you know

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<v Speaker 4>that's one more step in improving the reliability and the

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<v Speaker 4>comfort of the product for the end customers. So I

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<v Speaker 4>really see us stepping up our competitiveness of the airlines.

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<v Speaker 1>Roger, we have less than a minute here, but I

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<v Speaker 1>want to talk about that a little bit more because

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<v Speaker 1>you compare Amtrak to the airlines. For airlines, I mean,

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<v Speaker 1>you think about a fully booked first class in many

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<v Speaker 1>cases that would subsidize the rest of the plane. Have

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<v Speaker 1>you considered going ultra high end when it comes to

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<v Speaker 1>what Amtrak offers on the higher end, have you considered,

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<v Speaker 1>you know, modeling luxury train travel in Europe.

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<v Speaker 4>Well, we've looked at it briefly, but really we see

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<v Speaker 4>that our core mission is to deliver transportation to the

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<v Speaker 4>American people. We're probably not the best people to be

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<v Speaker 4>delivering that kind of very bespoke, very sort of limited product.

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<v Speaker 4>We want to make sure that we focus the benefits

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<v Speaker 4>and see money that the government invested us in touching

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<v Speaker 4>as many technical customers as possibles.

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<v Speaker 1>All right, Roger, really appreciate your time. That is Amtrak

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<v Speaker 1>President Roger Harris