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9/24/2009



Rail News: Rail Industry Trends

Alaska Railroad lays off 127 workers


On Tuesday — a day Alaska Railroad Corp. President and Chief Executive Officer Patrick Gamble described as one “many of us will often recall as time goes by, but not a happy day” in a memo to employees — the state-run railroad laid off 127 workers. The freight and passenger railroad employs about 700 year-round employees and 100 seasonal workers.

But Tuesday also was an important day in terms of addressing the railroad’s financial future, Gamble said.

“This downsizing does not, by itself, solve our financial problems,” he wrote. “It absolutely means this company has its work cut out for it, and the challenge is one not seen before in the railroad’s history of state ownership.”

The railroad’s revenue has declined of late because of a tourism drop in the state and reduced production at Flint Hills Resources L.P.’s North Pole petroleum refinery near Fairbanks, which accounts for more than one-third of the railroad's revenue.

In August, Alaska Railroad’s board approved a “zero-based approach” to restructuring the company and reducing costs by better aligning operating expenses with operating revenue. The board assigned performance improvement teams to analyze each facet of the railroad and determine resource levels necessary to meet business projections in 2010 and 2011.


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