CEO Art Leahy Has Rebuilt & Reinvigorated A Safe, Service-Oriented Metrolink

Art Leahy: When I came to Metrolink, not only did we have a board that was ready to break up, but within the management staff, we had a culture of avoidance, deferral, and concealment or denial.

Let me tell a few anecdotes to illustrate the culture in the organization at that time. I remember once, the then-CFO wrote a board report that was devoid of content. 

When I asked him why he didn’t include more real content, his answer was: “If we do, they’ll just ask more questions.” That’s exactly backward. Another time, shortly after I arrived, we were about to rehab a bunch of old locomotives. I realized that in the long run, it would be cheaper to buy new ones that had better fuel economy, higher horsepower, and lower emissions. On every dimension, it made more sense to buy new ones. 

But when I went to fellow who had made the decision and said, “It makes more sense to buy new ones, he said, “I know—but the advisory committee said not to.” I said to him, “We must make the business case. We must talk about dollars and cents and outcomes and results. We cannot make recommendations based on this person liking it and that person not liking it.” In a matter of a couple months, we had all five counties in line to buy new locomotives.

Now, we’re rebuilding the organization for the future. We have a new deputy CEO, new deputy COO, new communications director,  new chief financial officer, new government affairs manager, and other new leaders. These folks are all very smart and very committed, and we’re going to focus on the classic values of safety and service. 

We’re very pleased to be among the first in the country to have positive train control (PTC), which we’ve had in effect for about 14 months. We’re working closely with the Federal Railroad Administration on that. We’re also among the first in the world to have Tier 4 locomotives. We recently got our first one; it’s in testing. I look forward to beginning to release the rest in a month or two. We’ve done a great deal of work on our locomotives, and the old ones are in the process of being replaced over the next year or two.

In the 16 months I’ve been here, one of our tasks has been to rebuild our relationships with the five counties. In the past, we were not forthcoming with them. But they are the stockholders; they pay the bills. And if we’re not honest with them, they’re not going to trust us. It’s okay to make a mistake, but we have to confront it, we have to tell the counties and the Board, and we have to fix it. A year and a half ago, we could not give our county stakeholders any financial reports on expenditures, accounts receivable, accounts payable, etc. You can imagine the level of distrust that this created.

Now, we’re doing regular financials. Our new CFO talks to the county CFOs and the technical advisory committee. Our financial situation has improved significantly, including our reserves. There’s no rocket science here: We’re talking to the stakeholders about our status and accomplishments.

The JPA with the counties is now much stronger. We still have some issues to work out, but we’re not in crisis; we’re making progress on it.

Another area where we’ve had big issues in making progress is project delivery and keeping projects on schedule. Metro, our major funder, has had a great deal of concern about this. They wanted to know: “Why are we giving you more money for projects when you haven’t delivered the old projects?” Fair enough; it’s hard to argue with that. But I’m pleased to say that we’re making some progress, and have also become more forthright in communicating with the Metro Board.

I do want to comment on the Raymer to Bernson Double Track —a double-tracking project in the San Fernando Valley. Everything that was said is accurate about a small group of people blocking the track. I think the messaging done by Metro was perhaps more. Metro’s justification for the project was that it would allow them to carry additional trains. The neighborhood’s not crazy about that. The bulk of the area along that line going out to Chatsworth is industrial and commercial. There’s one short segment that’s residential. If there’s one area that might be sensitive, it’s right there. Now, we’re going back to Metro and trying to figure out how to reinvigorate this discussion. We’re having a parallel discussion on the San Bernardino line. Much of that line is single-track. As a consequence, the on-time performance is not very good.

We’re not trying to do double-tracking in order to increase capacity. We want to do it so that we can reduce the time that trains have to stand idly while they’re waiting for another train to pass. In this case, there is a community benefit to double-tracking. And if we link double-tracking to quiet zones, and maybe sound walls, we can begin to put together a partnership among Metro, Metrolink, and the host cities.

We had an issue with the joint powers authority with the Los Angeles-San Diego-San Luis Obispo Rail Corridor (LOSSAN). I was back in Orange County 12 or 13 years ago when the idea of empowering the LOSSAN board occurred to me. I was in Oceanside, and I saw a Metrolink train and a COASTER train standing right next to each other, both waiting to depart with their engines running. As I’m sure you know, buses, trains, and airplanes cost money by the minute. To have two trains standing there while they reverse directions is just not a good use of public resources. The real charge of LOSSAN should be to generate synergy among Metrolink, Amtrak, and COASTER commuter trains.

Citizens could care less about the difference between Metrolink and Amtrak. All they want to do is get where they’re going. To have institutional rivalries between two organizations is not productive from the taxpayer’s point of view.

This is particularly acute because the taxpayers of California pay for the Amtrak services, and the taxpayers of Southern California pay for the Metrolink service. In other words, it’s the same people. We ought to be creating synergy among one another, not rivalry and competition. That synergy manifests itself in our customer experience. For example, I think our Metrolink service shuts down way too early. Here we are, the second biggest city in the country, with plays and concert, and the train shuts down so early you can’t even go to a Dodger game. I hope to work with LOSSAN and the counties to get later-night train service.

I was COO when Metro opened the Blue Line back in 1990, and I learned a good lesson about later-night train service.Because construction was not yet done when the line opened, the last southbound departure was at around 7:00 in the evening. That train was always dead, but all the trains before it were very busy. When we added an 8:00 train, it was dead—but the 7:00 pm train got busy. And when we opened up the 9:00 train, the 8:00 train got busy.  The lesson is this: The last train is the insurance train. If we open later-night service, we’ll get more riders on the earlier trains.

We have an issue with maintenance of our track. 

There are significant segments of the track that have not been maintained properly. There are ties that are rotting, there is some track that is worn on curves that needs to be replaced, and there are some short bridges that need some work. We’re redoing our messaging to the counties so that we can show in detail what we need. 

At the moment, our engineers will come forward and say, “We need to place some ties between Milepost 12 and Milepost 19 on the Antelope Valley line.” As accurate as it may be, it sounds like these areas are distant and irrelevant to daily life.

I’m telling them, “Say something like: Between Burbank Airport and Van Nuys, the ties are no good! Show them photographs and take them out there to look at it, tell them what you’re going to do, and tell them what it’s going to cost. You have to put some meat on the bones. ‘Milepost 12’ doesn’t mean a thing to anybody except us.” I’m critical of our overall messaging as well—how we’ve described our role and our benefit to the region, and how we’re positioned in the market. 

For example, we say, “We carry 403,000 people a day.” Metro says, “Well, we carry a million and a half.” It’s easy to see that Metrolink’s ridership is very small. Now, we’re trying to re-message that.We’re positioning Metrolink in the region to show why it’s a good investment and what the benefits are. Our conclusion is that Metrolink is the best investment to reduce traffic and clean the air.

It’s true that in for boardings, our ridership is small. But our trip length is 10-15 times longer than other agencies. In terms of passenger miles, we’re one of the busiest carriers in SoCal—after Metro, but ahead of Riverside and Orange Co. combined. Metrolink moves a lot of folks in So.Cal.—60 percent across county lines.

Another benefit is that Metrolink takes cars off the road. The demographics of Metrolink riders are different from bus riders or Metro train riders: Their per capita income is higher. While many Metro and CTA riders are transit-dependent, Metrolink riders, more often than not, have access to cars. What this means is that almost on a one-to-one basis, a Metrolink passenger is a car off the freeway. Metrolink relieves the 5, the 91, the 60, the 10, the 134, the Hollywood, and more. Our fare-box return is higher than other transit agencies in the area, at about 43 percent. Metro’s is 25 percent—and dropping—and so is OCTA’s. This is powerful: Because our fares are high, and our trips are long, our subsidy per passenger mile is the second lowest of any carriers in Southern California. It’s cheaper by far than Metro’s or OCTA’s. (AVTA runs express buses on the freeway, so theirs is very low.) In other words, Metrolink is the best investment.

I’ll close by talking about the need for new people at Metrolink. I’m seeking to hire people who are very intense, very intelligent, and very willing to learn and understand the railroad business, as well as Southern California. I very strongly hope that, in a few years, somebody who works at Metrolink will succeed me, so that they understand the service area, the service requirements, and the politics and the complex issues that we have to deal with. At Metrolink, in addition to addressing the right-now problems of budgets and maintenance and things like that, we’re building an organization.

Audience Question: Driverless technology is developing much more rapidly than analysts expected. Uber is going to have a fleet of driverless cars in the next few months. Elon Musk says he’ll have them by 2019. That’s going to be quite a disruptive new element to public transportation, given that a lot of these will be cars on-demand. Do you figure this eventuality into your strategies?

Art Leahy: We are working on agreements with Lyft and Uber. Union Station is a major destination for people taking Lyft—and they’re coming to take Metrolink or Amtrak. They won’t take Lyft or Uber 80 miles, but they’ll take it five miles to get to the train station, which can take them 80 miles for a fraction of the cost. I think the disruption will be a bigger issue for shorter-distance carriers; it’s a market niche. We had some objections on the Metrolink Board to such an agreement, but I think we’ll get past them. These things are happening; we’ve got to get used to it. Our executive staff needs to understand the business. The business is not in the headquarters building; the business is out in the field. And you’ve got to get out there and see it. That’s why about once a month, Metrolink has an executive staff meeting on a train. 

That happens to be fun, but there’s a dismal aspect to this, as well: I’ve told our deputy CEO that she must visit some scenes of fatal accidents. I said, “I’m sorry for saying that to you, but you have to understand that safety is not just a technical or financial issue. When you see what happens—the awful consequences of one moment of bad decision-making—you become a believer in safety.” The first fatal I had to go to was in 1981—35 years ago—off of York and Armadale in Highland Park. I can still see it. But if you’re going to be in transi, you’ve got to understand profoundly how committed you must be to safety.