What's he lookin' at? - Amalgamated Transit Union

Page 4 — Why FirstGroup MattersFirstGroup in North america: How transit contracting Works, Why It Mbig bus and paratransitFirst Transit is the mass transit arm ofFirstGroup, responsible for over 10% of themultinational corporation’s revenue.“A transit authority that wants to contractout its bus or paratransit (disabled) service willadvertise an RFP (or ‘request for proposals’) withthe details,” explains International Executive VicePresident Ron Heintzman.“First Transit and other transit contractorssubmit their proposals. If First has the winningbid, it will get a contract to provide the serviceusing First employees in place of public transitworkers.” (In some cases the contract will onlyrequire First Transit to manage a transit system,in which case only the managers work for First,while employees still work for the transit agency.)Transit contracting is a lucrative business.First Transit earns tens of millions of dollars peryear to provide bus service in major metro areasFast Facts3 %like Denver, Phoenix, Portland and Vancouver –and holds dozens of smaller contracts across theUnited States and Canada to provide not just busand paratransit service but also university andairport shuttles. Most contracts run for years andhave a built-in pay increase for the company of3% or more each year. According to FirstGroupcorporate reports, First Transit is a billion-dollarbusiness segment that turned in operating profitsof 7.6% in 2008-09.Many different labor unions represent FirstTransit employees somewhere in the UnitedStates, but ATU has the largest union membershipin First Transit. Still, thousands of First Transitemployees remain unorganized.why does it matter?Today more than 10% of North America’smass transit service has been outsourced to privatecontractors – and that portion is growing. Unlikepublicly operated transit systems, private contractorslike First have to earn a profit. That’s why wagesand benefi ts for operators employed by privatecontract operators are significantly lower than thoseemployed by public transit authorities. And whilemost public mass transit employees are covered bypensions, private transit contractors today almostnever offer pension benefits – and strive to eliminatethem where they already exist.first group affects your paycKecK…Even When You Don’t Work for Them!The lower wages and benefits offered by forprofitbus contractors like First are a problemfor all of us – even those of us still employed bypublic transit authorities. When your local unionenters bargaining with your transit authority,management always brings up the lower wagesoffered by First and others as an argument againstunion requests for a decent raise – and oftenthreatens to contract out YOUR work if you don’tgive them their way!first student: yellow busFirst Student is the student transportationarm of FirstGroup. Around four out of 10 yellowschool buses in North America are now operatedby for-profit, private contractors – and FirstStudent is by far the biggest of the lot. The hugedivision employs nearly 70,000 and is responsiblefor one-quarter of FirstGroup’s global revenue;it reported whopping 12.6% profits in 2008-2009.In a typical First Transit or FirstStudent contract, the company’stake from local taxpayersincreases more than 3% per year.Did you get a 3% raise this year?Photo: Jon Patton/iStockphoto4 IN TRANSIT www.atu.org