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JUTC hunting top executives
published: Friday | November 23, 2007
Loss-making bus company won't cut staff File
Jamaica Urban Transit Company (JUTC), the loss-making government provider of in the capital, is on the hunt for seven top executives as part of its latest overhaul and its up-to-now elusive search for viability.
Launched in 1998 in an attempt to bring order to then shambolic bus system, the JUTC has consistently been in the red, losing for example, $1.2 billion in the 2006/2007 financial year and is projected to do even worse in 2007/2008.
And the company's new board, installed after the Labour Party (JLP's) victory in last September's general election, believes that a substantial part of the problem has to do with the failures of management.
"We have met as a board and have come to the conclusion that an operation that is run like this is a management problem," said Dennis Chung, the JUTC's deputy chairman, who is also a consultant in the island's Finance Ministry. "We have concluded that we have to look at it and reorganise it - not from the bottom but from the top down.
Last month, Ryan White, a former executive at the private sector firm, Issa Transport who became the JUTC's boss in February, was either pushed or jumped and Douglas Chambers, a who specialises in receiverships, was named executive chairman.
White was preceded in the job by several well-known names in Jamaican management, including Patrick McIntosh, who had been the top man at the Windalco alumina refineries here.
Running adverts
So now the JUTC is advertising for a president, but its corporate head-hunting doesn't end there. It is also , according to newspaper ads for:
A vice-president for human resources;
A vice-president for finance and administration;
A general manager for depot operations;
A manager for sales and marketing;
An accounting manager; and
A manager for human resources.
"We are looking across the wide sweep of the company," said Chung, the designated public voice of the JUTC's board on its transformation initiatives. "When we went in, there were some positions to be filled and some people have resigned."
What Chung described as the JUTC's "serious and worsening financial situation" is, in part, traceable to less-than-economic fares it has been allowed to charge, an inability to keep an optimum fleet on the roads and a failure to convince commuters that they should ride JUTC buses rather than its competitors, often ramshackle route taxis whose drivers/operators often pay little or no attention to the traffic code.
For instance, in 2002/2003 the JUTC had 96 million passenger rides, but five years later this had declined by 29 per cent to 68 million.
It had hoped that this would be increased by approximately six per cent during the current fiscal year to 72 million passenger rides.
The improved performance, however, was predicated on, among other things, an enhancement of its operational fleet by 100 buses and being more customer-focused.
At the start of this fiscal year, government documents indicated that JUTC had 424 operational buses from a fleet of 620. However, yesterday Chung told the Financial Gleaner that the company has 270 buses in operation, against a requirement of about 480.
"We are down nearly 50 per cent on demand for seats," he said.
Overstaffed
At the same time, he said, the JUTC has about 2,700 people on its payroll - again, far more than currently required to man and manage its operational fleet.
The plan though, is not to cut jobs but to build out the fleet to absorb the staff.
The upshot of this operational inefficiency and other problems is that the income, initially projected at approximately $3.8 billion this fiscal year, would have been insufficient to cover expenses. In fact, the projected loss of $1.169 billion is likely to be worse.
"Indeed, we might need some short-term support ahead of a fuller review of the needs of the company," said Chung.
"Hurricane Dean (in August) affected us and our revenues have been further affected by continuous rains Jamaica has experienced."
The squeezing of the company's cash flow translated in an embarrassing advisory to staff this week that their November salaries would be late, causing unease among workers.
A threatened strike was averted.
However, the proposed initiatives of the new board are not all having an easy passage and executive chairman Chambers is not with harsh critics among employees. Behind his back he is being referred to as 'Hurricane Chambers'.
"Chambers and his team are very disruptive and are seeing everything through political prisms," said a JUTC insider, who requested anonymity.
"Everything that was done by the previous board and management is being deemed to have been wrong and inappropriate. The fear is that you will get a politicised restructuring."
Strategic plans
However, according to Chung, apart from an interim review aimed at determining what immediate assistance the company might need to get it over immediate humps, the strategic plans for company is being approached a joint exercise "involving all the stakeholders".
"We didn't have proper planning and there was a lot of inefficiency in the company," he said.
"We are working on an a strategic plan, which should be ready by January, and it is important that we have input from the unions, workers and management."
The strategic plan, Chung expects, will not look at the JUTC only as a company providing commuter service, but as having a wider role in the national economy and in the context of energy conservation.
For example, the board is approaching the task on the basis that public transportation is critical to the functioning of an economy, and what contribution, if any, a society should make to an efficiency public transport system.
Additionally, with Jamaica transport accounting for about 30 per cent of Jamaica's oil bill of a projected US$2 billion, Chung argued that a good JUTC can help ease the crunch from oil prices, nearing US$100 a barrel.
"If we can provide an efficient, reliable and secure public transport, then perhaps we can get people to see JUTC buses as a viabl to using their cars on a daily basis, such for going to their jobs," he said.
Major ace
Hopefully, this could lead to a reduction in oil consumption by 10 to 20 per cent.
Chung believes that a major ace in the hands of the current JUTC board is Mike Henry, the minister who now has the transport portfolio.
Said he:"One of the problems that was faced by the JUTC is that it didn't have the strategic support at the political level. If you don't have that things can be difficult, especially to take difficult issues forward.
"We have tremendous support from the current minister, who often comes with interesting ideas and suggestions for consideration."
business@gleanerjm.com
JUTC hunting top executives
published: Friday | November 23, 2007
Loss-making bus company won't cut staff File
Jamaica Urban Transit Company (JUTC), the loss-making government provider of in the capital, is on the hunt for seven top executives as part of its latest overhaul and its up-to-now elusive search for viability.
Launched in 1998 in an attempt to bring order to then shambolic bus system, the JUTC has consistently been in the red, losing for example, $1.2 billion in the 2006/2007 financial year and is projected to do even worse in 2007/2008.
And the company's new board, installed after the Labour Party (JLP's) victory in last September's general election, believes that a substantial part of the problem has to do with the failures of management.
"We have met as a board and have come to the conclusion that an operation that is run like this is a management problem," said Dennis Chung, the JUTC's deputy chairman, who is also a consultant in the island's Finance Ministry. "We have concluded that we have to look at it and reorganise it - not from the bottom but from the top down.
Last month, Ryan White, a former executive at the private sector firm, Issa Transport who became the JUTC's boss in February, was either pushed or jumped and Douglas Chambers, a who specialises in receiverships, was named executive chairman.
White was preceded in the job by several well-known names in Jamaican management, including Patrick McIntosh, who had been the top man at the Windalco alumina refineries here.
Running adverts
So now the JUTC is advertising for a president, but its corporate head-hunting doesn't end there. It is also , according to newspaper ads for:
A vice-president for human resources;
A vice-president for finance and administration;
A general manager for depot operations;
A manager for sales and marketing;
An accounting manager; and
A manager for human resources.
"We are looking across the wide sweep of the company," said Chung, the designated public voice of the JUTC's board on its transformation initiatives. "When we went in, there were some positions to be filled and some people have resigned."
What Chung described as the JUTC's "serious and worsening financial situation" is, in part, traceable to less-than-economic fares it has been allowed to charge, an inability to keep an optimum fleet on the roads and a failure to convince commuters that they should ride JUTC buses rather than its competitors, often ramshackle route taxis whose drivers/operators often pay little or no attention to the traffic code.
For instance, in 2002/2003 the JUTC had 96 million passenger rides, but five years later this had declined by 29 per cent to 68 million.
It had hoped that this would be increased by approximately six per cent during the current fiscal year to 72 million passenger rides.
The improved performance, however, was predicated on, among other things, an enhancement of its operational fleet by 100 buses and being more customer-focused.
At the start of this fiscal year, government documents indicated that JUTC had 424 operational buses from a fleet of 620. However, yesterday Chung told the Financial Gleaner that the company has 270 buses in operation, against a requirement of about 480.
"We are down nearly 50 per cent on demand for seats," he said.
Overstaffed
At the same time, he said, the JUTC has about 2,700 people on its payroll - again, far more than currently required to man and manage its operational fleet.
The plan though, is not to cut jobs but to build out the fleet to absorb the staff.
The upshot of this operational inefficiency and other problems is that the income, initially projected at approximately $3.8 billion this fiscal year, would have been insufficient to cover expenses. In fact, the projected loss of $1.169 billion is likely to be worse.
"Indeed, we might need some short-term support ahead of a fuller review of the needs of the company," said Chung.
"Hurricane Dean (in August) affected us and our revenues have been further affected by continuous rains Jamaica has experienced."
The squeezing of the company's cash flow translated in an embarrassing advisory to staff this week that their November salaries would be late, causing unease among workers.
A threatened strike was averted.
However, the proposed initiatives of the new board are not all having an easy passage and executive chairman Chambers is not with harsh critics among employees. Behind his back he is being referred to as 'Hurricane Chambers'.
"Chambers and his team are very disruptive and are seeing everything through political prisms," said a JUTC insider, who requested anonymity.
"Everything that was done by the previous board and management is being deemed to have been wrong and inappropriate. The fear is that you will get a politicised restructuring."
Strategic plans
However, according to Chung, apart from an interim review aimed at determining what immediate assistance the company might need to get it over immediate humps, the strategic plans for company is being approached a joint exercise "involving all the stakeholders".
"We didn't have proper planning and there was a lot of inefficiency in the company," he said.
"We are working on an a strategic plan, which should be ready by January, and it is important that we have input from the unions, workers and management."
The strategic plan, Chung expects, will not look at the JUTC only as a company providing commuter service, but as having a wider role in the national economy and in the context of energy conservation.
For example, the board is approaching the task on the basis that public transportation is critical to the functioning of an economy, and what contribution, if any, a society should make to an efficiency public transport system.
Additionally, with Jamaica transport accounting for about 30 per cent of Jamaica's oil bill of a projected US$2 billion, Chung argued that a good JUTC can help ease the crunch from oil prices, nearing US$100 a barrel.
"If we can provide an efficient, reliable and secure public transport, then perhaps we can get people to see JUTC buses as a viabl to using their cars on a daily basis, such for going to their jobs," he said.
Major ace
Hopefully, this could lead to a reduction in oil consumption by 10 to 20 per cent.
Chung believes that a major ace in the hands of the current JUTC board is Mike Henry, the minister who now has the transport portfolio.
Said he:"One of the problems that was faced by the JUTC is that it didn't have the strategic support at the political level. If you don't have that things can be difficult, especially to take difficult issues forward.
"We have tremendous support from the current minister, who often comes with interesting ideas and suggestions for consideration."
business@gleanerjm.com
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