Hundreds of MBTA workers could be affected as T officials push the transit agency’s boldest outsourcing plan yet — privatizing maintenance on its sprawling bus fleet, a move consultants say could save up to $40 million a year.
The third round of cost-cutting privatization, it would be the first to target the agency’s core operations.
The recommendations, part of an internal report produced by T-hired consultants, also target the agency’s in-station customer service operations as an outsourcing “opportunity,” as well as additional maintenance of its new Red Line and Orange Line vehicles. MBTA officials are poised to take the recommendations to the T board as early as today, weather permitting.
Taken together, the T could save $65 million a year, according to the report. Its recommendations could affect more than 600 workers, with some possibly moving into similar roles under a private contract, officials said, while others might get other jobs at the T, retire or face layoffs. The plan would mark the agency’s boldest foray into the private market since lawmakers gave it a three-year reprieve from the so-called Pacheco Law.
“Competition is a good thing. It drives innovation, it drives pricing, it drives creativity,” said acting General Manager Brian Shortsleeve, who cited projected savings from previously outsourcing the T’s parts warehouse and “money room,” where cash is counted and processed. The T last year also cut a new $1.6 billion labor deal with the Carmen’s Union Local 589, which renegotiated its contract amid the specter of more privatization.
“We believe there’s significant opportunity beyond that,” Shortsleeve said.
T officials have not proposed a specific contract but say they want to send out a request for information from prospective contractors this month.
Last year, the T hired TransPro Consulting, a Florida-based firm, as well as McKinsey & Co. for a combined $996,000 to “assess the options” for outsourcing. They zeroed in on bus maintenance, for which the T was projected to spend $125 million last fiscal year, more than half of which went toward covering pay and benefits for about 525 full-time workers.
Among the report’s findings:
• The T could save as much as $30 million to $40 million by outsourcing maintenance at all nine of its bus garages, with a recommendation to immediately focus on its Lynn, Quincy, Fellsway and Arborway facilities, which are either temporary or deteriorating, and have a total of about 130 employees. TransPro CEO Mark Aesch said, “Our view is, these four would make sense to concentrate on out of the gate. As you begin to stand up a new system, then you can look to see if there are opportunities beyond that.”
• The T should seek private proposals to run its in-station customer service operations, which include about 200 workers. About 88 of those are Carmen’s Union members and are protected under their December labor deal, but there’s “potential” to save up to $11 million.
• The agency should outsource the “life cycle maintenance” of its forthcoming Red Line and Orange Line vehicles, work that’s done to update subway cars as they age. That could save another $14 million, according to the report.
“While the Local 589 agreement achieves $22 million in annual savings … it does not capture much of the potential improvements to the MBTA’s core operating productivity and cost base, particularly in bus maintenance,” Aesch wrote in a memo to the T’s Fiscal Management and Control Board.
The report, which the Herald sought through a public records request, was expected to emerge at today’s board meeting, if it goes ahead in today’s storm.
The agreement with the Carmen’s Union guarantees its 4,100 members who drive buses keep the 2.4 million hours they spend navigating their routes, all but eliminating the potential for outsourcing them short of expanding service.
But most of the mechanics working on T buses fall outside the Carmen’s Union and under the Machinists Union Local 264. Efforts to reach Craig Hughes, the union’s business agent, were not successful.
