General MBTA Topics (Multi Modal, Budget, MassDOT)

I'm sympathetic to Pollack's view that transportation experience isn't a necessity for the GM. We definitely want people with good transportation experience running the organization, but that doesn't mean the GM him or herself necessarily needs it. To quote today's Globe:

Boston Globe said:
Transportation Secretary Stephanie Pollack said Ramirez’s lack of transit experience was far from an obstacle to naming him for one of the most visible, pressure-packed jobs in state government.

“In fact, transit expert was not high on our priority list when we launched the search for a new general manager,” Pollack said at an event Tuesday announcing Ramirez’s appointment. “What we wanted was a successful and seasoned executive with a proven track record at leading complex organizations through transformation and change.”

Pollack also pointed out that the MBTA has an experienced public-transit manager in Jeff Gonneville, the agency’s deputy general manager.
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I would argue that most of the (bad) decisions that got the T into the position it's in today have had nothing to do with transportation. The T's debt issues (e.g., getting locked into long-term debt obligations at interest rates WAY above prevailing market rates), financial constraints (e.g., grossly under-performing pension fund returns), and labor problems (e.g., overtime policies that are far from best practices) have NOTHING to do with transportation. These are not "how to get the trains and busses running on time" issues, these are "how to effectively run a big business/organization" issues. These are the sorts of things a GM/CEO is responsible for, and if you don't get them right you'll never have the resources and mandate to take care of the transportation issues. You certainly need people at the GM's right hand who know how to run the trains and busses, but the GM's primary responsibility is directing the overall structure of the organization.

We all love to crap on Baker and his contempt for the T on this forum, but I think Pollack/Shortsleeve have done a pretty good job. They've been prudent and competent every step of the way, and have addressed plenty of the longer term non-transportation handicaps that have held the T back. Have they been perfect? No. But if we continue along the path they've laid out I'll take it.

That being said, Ramirez seems like a somewhat strange choice... He's being presented as an "MBA / turnaround expert" but he doesn't have an MBA and isn't a turnaround expert. He spent 12 years as a company man at GE, took over a struggling Texas energy supplier before resigning/being forced out during an accounting scandal (for which he is currently a defendant in an active lawsuit), and has been a self-employed "consultant" (whatever that means...) in the 2+ years since. The fact that this is his first real gig since he left the energy company debacle in spring of 2015 makes me more than a little nervous.
 
I'm sorry his business school degree is a "certificate" from Duke's Fuqua School of Management.

And he brands his consultancy as such:
Typical clients: CEOs, PE firms that need expertise at the CEO level to accomplish accelerated change, surgical strikes change management.
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[Luis Ramirez Linkedin]
 
bigpicture7 said:
^ he does have an MBA and does brand himself as a turn-around specialist:

[Luis Ramirez Linkedin]
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That's not an MBA. It's a "Certificate of Completion, Executive Management Training". That's what you get when you complete a course, not a degree.

And anyone can brand themselves as a "turn-around specialist". He left the only organization he's ever led abruptly in the middle of a scandal. The firm's chairman calls his time in charge "a challenging time".
 
^ Correction made

Guys, I'll bow out of this argument as I'm sure you're all tired of hearing from me. I guess there are only a few of us with the view that domain expertise and financial competence need not be an either/or.
 
Arlington said:
Alan Mulally was a Boeing exec who inoculated Ford against the Great Recession, and then turned it around. It did not take automaking domain expertise, it took stuff like finance, supply chain, labor relations, R&D, and marketing. Industrial company stuff, nothing about up through the ranks in one town, one industry, or one organization.
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Both Boeing and Ford were for-profit public corporations.

We keep falling into the trap that good business executives make good public sector agency directors. Both they are not the same animals. All of his gut instincts will be wrong.

Some experience managing a complex, cross-jurisdictional public agency would really be helpful here, even if not in transit. That would be having parallel skills.
 
Arlington said:
And yes I trust Pollack.
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I don't. Not anymore... she burned her bridges with me too many times

Arlington said:
And also we know that The Ride is waaay too expensive and it is good that they're looking at a cheaper Uber/Lyft model.
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Since I worked for the RIDE contractor, I can tell you this is a long way off. And doesn't work for people with mobility issues. Uber/Lyft would be a curb to curb service offered to people as an alternative to regular RIDE service if they have no physical impairments. Its design is to meant to be used an alternative during busy times when there aren't enough RIDE vehicles available. OR a driver is late and car sharing is used as an alternative.

I should also state that Uber and Lyft are not quite there yet in terms of API. The whole process would be very manual at scheduling the rides (vs the current Adept system which is automatic at doing this). It's just means at the end of the month someone has to get a report and manually deduct the rides from their account. This is one of the sticking points (as currently its done the minute the rider is picked up....)

there's alot more.. and alot more to say but the RIDE is a long way off for this to happen.

I can tell you its already being done at the NY MTA.. (they are GCS's other paratransit client) so we talked with them first.
 
Guy whose new bosses claim they chose him as a turnaround expert doesn't think he was hired as a turnaround expert:

At his introduction Tuesday, Ramirez bristled at the notion that he was hired as a turnaround executive, saying the MBTA is already on the path to improvement.

“When I hear the phrase turnaround, it means something is going in the wrong direction or a direction contrary to where an organization needs to go,” he said. “My job is to build upon the solid foundation . . . and help create a long-term road map and plan to fully transform the T into what it needs to be: a world-class transportation system serving the people of a world-class city and Commonwealth.”
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JumboBuc said:
I'm sympathetic to Pollack's view that transportation experience isn't a necessity for the GM. We definitely want people with good transportation experience running the organization, but that doesn't mean the GM him or herself necessarily needs it. To quote today's Globe:



I would argue that most of the (bad) decisions that got the T into the position it's in today have had nothing to do with transportation. The T's debt issues (e.g., getting locked into long-term debt obligations at interest rates WAY above prevailing market rates), financial constraints (e.g., grossly under-performing pension fund returns), and labor problems (e.g., overtime policies that are far from best practices) have NOTHING to do with transportation. These are not "how to get the trains and busses running on time" issues, these are "how to effectively run a big business/organization" issues. These are the sorts of things a GM/CEO is responsible for, and if you don't get them right you'll never have the resources and mandate to take care of the transportation issues. You certainly need people at the GM's right hand who know how to run the trains and busses, but the GM's primary responsibility is directing the overall structure of the organization.

We all love to crap on Baker and his contempt for the T on this forum, but I think Pollack/Shortsleeve have done a pretty good job. They've been prudent and competent every step of the way, and have addressed plenty of the longer term non-transportation handicaps that have held the T back. Have they been perfect? No. But if we continue along the path they've laid out I'll take it.

That being said, Ramirez seems like a somewhat strange choice... He's being presented as an "MBA / turnaround expert" but he doesn't have an MBA and isn't a turnaround expert. He spent 12 years as a company man at GE, took over a struggling Texas energy supplier before resigning/being forced out during an accounting scandal (for which he is currently a defendant in an active lawsuit), and has been a self-employed "consultant" (whatever that means...) in the 2+ years since. The fact that this is his first real gig since he left the energy company debacle in spring of 2015 makes me more than a little nervous.
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This seems exactly right on all accounts
 
Just a reminder folks, a lot of the T's debt issues are political in nature, not just bad financial management. (Like the Big Dig debt thrown onto the T.)

The T GM job is way more political than any corporate CEO job. I think that is going to create a challenge for the new GM.
 
JeffDowntown said:
Just a reminder folks, a lot of the T's debt issues are political in nature, not just bad financial management. (Like the Big Dig debt thrown onto the T.)

The T GM job is way more political than any corporate CEO job. I think that is going to create a challenge for the new GM.
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You mean the T's GM needs to be a transit advocate, and not just a capable finance person. If so, Jeff we are apparently in the minority on this forum.

The topmost leader in an organization provides vision - and stands up for that vision in the face of stakeholder (or in this case political) pushback.
 
bigpicture7 said:
You mean the T's GM needs to be a transit advocate, and not just a capable finance person. If so, Jeff we are apparently in the minority on this forum.

The topmost leader in an organization provides vision - and stands up for that vision in the face of stakeholder (or in this case political) pushback.
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You're not as in the minority as you may think.
 
bigpicture7 said:
You mean the T's GM needs to be a transit advocate, and not just a capable finance person. If so, Jeff we are apparently in the minority on this forum.

The topmost leader in an organization provides vision - and stands up for that vision in the face of stakeholder (or in this case political) pushback.
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Actually I was more correctly saying that the T GM needs to be able to navigate the political complexities of a multi-jurisdictional agency that is dependent on its funding (to solve financial issues) on the whims of the legislature, aka politics.

All the sound fiscal management judgement won't help when legislators throw him a serious curve ball, and he doesn't know how to build political will to fight back.
 
Ok I am the only one who thinks the T's GM ought to be a transit visionary. I give up for real this time.
 
bigpicture7 said:
Ok I am the only one who thinks the T's GM ought to be a transit visionary. I give up for real this time.
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I agree with you. All the management skill, transit expertise, and political skills in the world aren't as useful as they could be if there isn't a clear goal to which they can be applied.

I think the MBTA could really use a clear and far-ranging long-term vision. It won't be easy to achieve and it will take forever, but it's a measuring stick and something that they should be working towards with every little, local project they do.
 
Balerion said:
I agree with you. All the management skill, transit expertise, and political skills in the world aren't as useful as they could be if there isn't a clear goal to which they can be applied.

I think the MBTA could really use a clear and far-ranging long-term vision. It won't be easy to achieve and it will take forever, but it's a measuring stick and something that they should be working towards with every little, local project they do.
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I think this goes beyond the MBTA to encompass the MassDOT. Since we don't have a regional government around Boston, it falls on the MassDOT to set a transportation vision for the region, including the accommodation of growth without choking the city and the region in private automobiles. Basically setting up the transportation priorities for the region. I also believe that the MBTA needs a big seat at that table, but the priorities need to be multi-modal. (The MBTA transit vision needs to have context.)
 
JeffDowntown said:
I think this goes beyond the MBTA to encompass the MassDOT. Since we don't have a regional government around Boston, it falls on the MassDOT to set a transportation vision for the region, including the accommodation of growth without choking the city and the region in private automobiles. Basically setting up the transportation priorities for the region. I also believe that the MBTA needs a big seat at that table, but the priorities need to be multi-modal. (The MBTA transit vision needs to have context.)
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I agree. I've often said there's so much waste going on with indvidual transit agencies across the state. It would be far more cost effective to fold them all into one big agency where administrative costs are shared across the agency, and work together as a statewide/regional wide transit structure.

But of course, our politicians are so narrow minded.

(of course folding in W Mass transit agencies into one big agency, would prevent the W Mass politicians always voting no for transit funding because it would hurt themselves in the end also)
 
cybah said:
I agree. I've often said there's so much waste going on with indvidual transit agencies across the state. It would be far more cost effective to fold them all into one big agency where administrative costs are shared across the agency, and work together as a statewide/regional wide transit structure.

But of course, our politicians are so narrow minded.

(of course folding in W Mass transit agencies into one big agency, would prevent the W Mass politicians always voting no for transit funding because it would hurt themselves in the end also)
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+1

Been a proponent of this for a long time. Said it better than I could've.
 
WBUR has been doing more digging into Ramirez and Global Power Equipment Group, the Texas Energy Supplier he abruptly resigned from under somewhat sketchy circumstances in 2015. There's an article about it here and Megna Chakrabarti has an updated tweet storm about it here.

The long and short of it is that in 2014, the last year Ramirez was in charge and the one he points to in his LinkedIn profile as evidence of his "turnaround" skills, Global Power originally reported $11.1 million in net income. He abruptly left the following March, and two months later the new management told the SEC that it had to refile its earnings for the previous year. Once the corrected numbers came out, that $11.1 million in profit turned into $-47 million. Since this all has been revealed the stock of the company has lost 75% of its value and they've been kicked off the New York Stock Exchange. This is all because of accounting inaccuracies committed while Ramirez was in charge.

As CEO, Ramirez personally signed documents certifying that their SEC filings were "accurate and complete". They were not. The company is now the subject of an SEC investigation and he is named in a lawsuit that alleges "several employees told Ramirez directly about the financial problems at Global Power Equipment Group" but he "filed the original erroneous annual report anyway".

Nobody else hired Ramirez in the two plus years since this happened, until this week when the T made him their new GM.

I encourage you to read the BUR story and follow Twitter string. Maybe it was all an honest mistake and no wrongdoings were committed, but it's pretty clear there was no "turnaround" here. All in all, this looks sketchy af.
 
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