Amtrak CEO Gardner leaves as operator pushes back against Musk’s privatisation drive

USA: Amtrak CEO Stephen Gardner announced on March 19 that he was stepping down from the national passenger operator with immediate effect.

In a brief statement, he said that he was leaving ‘to ensure that Amtrak continues to enjoy the full faith and confidence of this administration’. According to the Reuters news agency citing a White House official, he was asked to step down by the Trump administration.

Having previously been an intern at the operator, Gardner joined Amtrak in 2009, rising to Chief Operating & Commercial Officer before being appointed President in 2021, taking on overall leadership of the business.

Widely seen as a keen rail advocate, in his early career, Gardner worked for Guilford Rail System, now Pan Am Railways, and the Buckingham Branch Railroad in Virginia. He then worked on rail and transportation policy for the Senate Committee on Commerce, Science & Transportation before joining Amtrak.

‘I am so proud of what the Amtrak team has accomplished to bring passenger rail service to more people and places across the country over these past 16 years, and I thank the Board for their trust and support’, he said in his departing statement.

‘We did a lot together to make Amtrak safer, more modern, and a better travel experience for all our customers. From my start as an Amtrak intern back in the 1990s to ending as CEO, it has been my honour and privilege to lead this great American company, and I wish Amtrak every success. See you on the rails.’

DOGE targets Amtrak

Gardner’s departure comes only a few weeks after US government advisor and tech entrepreneur Elon Musk raised the prospect of Amtrak being privatised. Musk is the co-leader of the Department of Government Efficiency body which is advising the Trump administration on ways to dramatically scale back the size and scope of the federal government; since its creation in 1971, Amtrak has been run as a federally chartered corporation.

Musk is reported to have told a Morgan Stanley conference at the start of March that ‘we should privatise anything that can be privatised. Something’s got to have some chance of going bankrupt or there’s not a good feedback loop for improvement.’ According to CNN, he went on to describe Amtrak as ‘a sad situation’ and ‘kind of embarrassing’.

Amtrak defends itself

On March 5, Amtrak itself issued a white paper challenging the idea. In its introduction, the document said that ‘proponents of privatisation assert that it would produce better service at a lower cost and reduce or even eliminate the need for public funding. Great Britain’s recent renationalisation of its rail service after three disastrous decades of privatisation, and past unsuccessful efforts to privatise various Amtrak operations, show otherwise.’

Defending its record, Amtrak’s white paper said the operator achieved record revenue and ridership figures in the 2024 financial year, with New York – Washington DC Northeast Corridor route seeing passenger volumes 12% higher in 2024 than in FY2019, pre-Covid.

‘NEC train operations had an operating cost recovery of 123% in FY24, far exceeding the 100% statutory goal’, it added. ‘When Amtrak acquired the NEC from the bankrupt private railroad that had owned it, speed restrictions imposed for safety reasons covered 300 km of NEC track.’

Now, Amtrak said, the NEC was the country’s ‘only high speed railroad’, where the maximum operating speed for the fastest Acela Express services is expected to rise to marginally from 240 km/h to 257 km/h when new Alstom Avelia trainsets enter service in 2026.

It added that approximately 2 000 Amtrak, commuter and freight trains use the corridor, double the number in 1976 when the company took on ownership of most of the infrastructure on the strategically vital 750 km route.

National network

However, while the NEC is Amtrak’s key route in terms of traffic and ticket revenue, the operator remains mandated by Congress to provide socially desirable long-distance trains on routes across the USA. These have long been heavily loss-making and subject to frequent attempts by policymakers to cut the associated costs.

Addressing this point in passing, Amtrak says ‘it is not clear what proponents of privatisation expect it would accomplish. A private entity would face the same constraints as Amtrak, but it would lack Amtrak’s essential statutory right to operate over the national rail network.’

Labour costs account for nearly two thirds Amtrak’s operating costs, the documents explains. These ‘would continue to be driven predominantly by agreements negotiated under the unique provisions of the Railway Labor Act to which a private entity replacing Amtrak would be subject.

‘A private entity would also have to pay the same prices Amtrak pays for other major expenditures, such as diesel fuel and the electricity required for NEC operations.

‘While the federal government is Amtrak’s majority owner, federal law requires Amtrak to be operated and managed as a for-profit company’, the white paper concluded.

• Go deeper: The biggest reforms to Britain’s railways since privatisation 30 years ago are now being implemented. Read our explainer to understand the context.