Amtrak: Lack of Funding or Mismanagement?

Amtrak: Lack of Funding or Mismanagement?

  • Case
  • Teaching Notes

This case discusses the shortcomings in the safety culture at the railroad company Amtrak, a quasi-government organization, which contributed to several accidents between 2016 and 2018. Amtrak also faced problems from its reduction in government subsidy and its inability to report profits for a single year between 1971 and 2017. Operations on unprofitable long-haul routes, inflated employee salaries, overtime wages, and other inefficient operational costs further aggravated the problems, in spite of which Amtrak was rated as one of the best employers in the United States. The case urges students to discuss how to make Amtrak a high-reliability organization (i.e. operating risk-free) and whether implementing an automatic braking system offers a solution to this problem. The case further urges students to critically analyze whether quasi-government organizations like Amtrak should receive federal funding in the form of subsidies and operate on inefficient routes, especially when providing value to a very limited segment of travelers.

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