MBTA adopts corporate mindset with GM pick
Ramirez has strong business skills, no public sector or transit experience
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Luis Manuel Ramirez, 50, currently runs a Dallas-based consulting firm called TodoModo Group. He previously ran Global Power Equipment Corp., a design, engineering, and manufacturing firm in Dallas, and served in a number of high-management positions at General Electric and Siemens Global Businesses.
His resume, and particular his turnaround skills, are what attracted the T’s attention. But when he starts at the agency on Sept. 12, Ramirez will know little about the long-troubled transit authority he is heading or the highly political environment in which it operates. His familiarity with Boston is limited to what he has picked up on a few visits to the city on business over the years. And his knowledge of the MBTA is defined by what he learned during the selection process for his job and some time he spent personally riding the various subways lines and the Silver Line.
Transportation Secretary Stephanie Pollack characterized Ramirez’s lack of public sector or transit experience as almost a plus. “Transit expert was not high on our priority list when we launched a search for a new general manager six months ago,” she said. “What we wanted was a successful and seasoned executive with a proven track record at leading complex organizations through transformation and change. Those kinds of private sector leaders who are willing to come into the public sector, and particularly an organization like the MBTA that is under near-daily public scrutiny, are not necessarily easy to find.”
“Luis is a CEO who has shown in his past positions that, when paired with a strong operating second, he can really make transformative change in organizations, and he has shown that he stays until he gets the job done,” Pollack said. “In MBTA Deputy General Manager Jeff Gonneville, Luis has that strong operating partner and I’m confident that the combination of the two gives the T one of the strongest leadership teams it could possibly have.”
Ramirez signed a three-year contract that pays him a base salary of $320,000 a year, increasing 1.5 percent each year. He will also be eligible for a “success bonus” equal to 32,000 the first year, $48,000 the second year, and $64,000 the third year. Pollack said the contract’s definition of success (an annual series of performance metrics) has not been spelled out yet, but will be before he starts work. His contract can be renewed for a fourth and fifth year by mutual agreement of Pollack (or her successor) and Ramirez.
The contract also provides for as much as $60,000 in moving expenses and allows Pollack to remove Ramirez with or without just cause. If he is removed without just cause, Ramirez will be entitled to three months of salary plus a pro-rated portion of his bonus. If he is removed for cause, he will receive no additional salary payments.
While Ramirez’s pay is high by Beacon Hill standards (the governor is paid $151,800 a year and Pollack makes $161,500), Pollack said he could make a lot more in the private sector. She said the average pay for a transit authority GM nationally is in the low $300,000 range.
The contract itself is a sign of how the T is changing. Joe Pesaturo, the T’s long-time spokesman, said many general managers in the past didn’t have detailed contracts or incentive bonuses. Now those types of contracts are becoming more commonplace. In addition to Ramirez, Gonneville and John Dalton, the contractor hired to oversee the Green Line extension to Somerville and Medford, have performance bonuses in their contracts.
Pollack and Gov. Charlie Baker, who got to know Ramirez over lunch in his State House office, are counting on the new general manager to stay at least three years but hopefully longer. There have been five permanent and interim general managers at the T since Baker took office in 2015, and administration officials say the transit authority desperately needs management stability.
“We need at least three years to build on the changes that we’ve made,” Pollack said. She said the governor has told her that turnarounds run in stages. The first stage is when problems are defined, new people are hired, and revised goals are set. Then begins the middle phase, executing on the newly established goals, which Pollack described as perhaps the hardest. “That’s the phase the T is at now, a lot of progress but not enough,” she said.
Ramirez speaks English, Spanish, and German fluently.
Ramirez adopted a humble attitude in answering questions from the media, but offered few hints about his plans for the MBTA. He said he has always been interested in taking the skills he has learned in the private sector and applying them in the public sector. He said he wouldn’t be able to engineer a turnaround at the T by himself, and said the turnaround at the T is already underway.
Asked whether the T needs additional revenue, he said he is not as familiar with that topic as he needs to be. He also declined to say what short and medium-term goals he has for the agency. He also said he is comfortable dealing with unions.
T officials have set aside $2.5 million for Ramirez to hire staffers of his own choosing. Once Ramirez takes over, Steven Poftak, who has been serving as interim general manager, will return to the Fiscal and Management Control Board, replacing Lisa Calise, who is stepping down.The timing of Ramirez’s job at the T seems somewhat fortuitious, since his wife, Delia Garced, a vice president for market activation at GE Digital, will be transferring to the company’s new Boston headquarters.
“We’re already looking for a place to live,” Ramirez said. “We plan to be here for a long time.