Marching orders for the T’s new GM

Marching orders for the T’s new GM

Bonus tied to on-time performance, boosting capital spending

THE MBTA’S NEW GENERAL MANAGER will be paid a bonus of as much as 10 percent this fiscal year if he holds the line on operational spending, increases capital expenditures by 12 percent, hires a series of top administrators, and succeeds in boosting on-time performance of buses, subways, and commuter rail.

Transportation Secretary Stephanie Pollack on Tuesday released a series of key performance indicators on which Luis Manuel Rivera will be judged during the remainder of this fiscal year. Pollack identified specific targets within four broad categories: organizational transformation, human capital, customer experience, and capital delivery. Pollack will have sole discretion to award Ramirez bonuses of as much as 2.5 percent in increments of .5 percent in each category. Ramirez is being paid $320,000, so a 10 percent bonus would add up to $32,000.

Financially, Ramirez is being asked to hold the line on spending so the MBTA doesn’t have to tap for operations more than $30 million of a $180 million legislative appropriation. He is also expected to boost capital spending from $709 million in fiscal 2017 to $795 million in fiscal 2018, which began July 1.  His goal is to reach $1 billion in capital spending in fiscal 2019, which would represent a 42 percent increase over the 2017 capital spending levels.

Ramirez is also being asked to reset the T’s compensation structure this fiscal year and hire a chief operating officer, a chief engineer, a customer service chief, an executive director of commuter rail, and a chief financial officer.

He is also expected to oversee efforts to measure and achieve quarter-over-quarter improvement in on-time performance of the commuter rail system, four subway lines, and key bus routes.

Ramirez spent his first day on the job Tuesday, meeting with passengers, staff, and the media. He said he got on the Green Line during the morning at Hynes Convention Center and discovered the fare machines were not working.

“That really indicates to me firsthand some of the experiences customers are actually having and why it’s so important we bring their experience into how we operate the business, set the metrics up for the teams, and also how we drive the changes we’ve got to make,” he said.

Ramirez said listening to the T’s customers is a top priority. “Until I hire a customer service person on my staff, which I plan to do, I’m going to do that job myself,” he said. He plans to live downtown and take the T regularly. “You’ll see me out there quite a bit. I’m the kind of guy that likes to walk the shop, and that’s how I learn the organization,” he said.

The new GM’s image as a turnaround expert has taken a hit recently as the company he used to head, Global Power Equipment Group of Irving, Texas, was forced to announce that its financial statements contained errors that required financial reports from as far back as 2012 to be revised. Ramirez said on Tuesday he had nothing to do with the problems and wasn’t aware of them when he left the company in March 2015 to set up his own consulting firm. He started at Global Power in July 2012.

Global Power has been slowly restating its financial results and on Tuesday released numbers for 2016, which showed the company had a net loss of $43.6 million, an improvement over the 2015 loss of $78.7 million. The company also said preliminary data for the first six months of 2017 suggests revenue is off by about $60 million compared to the same period a year ago.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The company cautioned, however, that “material weaknesses” in the company’s internal controls over financial reporting, first disclosed in December 2016, have not been fully corrected and that the 2017 preliminary data may end up changing.

The company is facing a shareholder lawsuit and an SEC investigation in connection with its financial reporting problems, but Rivera said it had nothing to do with him. “I’m very proud of the work I did at Global Power,” he said.