Peter Torrellas, who officially took over as president of Cubic Transportation Systems last week, has made what is believed to be his first major personnel move, dismissing the former senior vice president of engineering and products Galen Chui, Mobility Payments has learned. More dismissals expected as the large fare-system supplier seeks to rebuild market confidence and win more contracts.
Cubic Corp. has millions in quarterly debit-service payments to make and ratings agency Fitch was not impressed with progress by private-equity owned Cubic, which is also a defense contractor. Fitch in late July revised Cubic’s credit rating to negative from stable and downgraded its rating to B-, a low rating.
Peter Torrellas, who officially took over as president of Cubic Transportation Systems last week, has made what is believed to be his first major personnel move, dismissing the former senior vice president of engineering and products Galen Chui, Mobility Payments has learned.
Torrellas announced Chui’s departure today to Cubic employees (see message on this page). Chui, who will leave the company Nov. 10, has served in a lesser post, as general manager of the Asia-Pacific region, for the past few months after he ceded the top engineering job at Cubic Transportation Systems, or CTS.
With Cubic struggling of late to win new contracts and keep business it already has, some company insiders believe Chui will not be the only executive losing their job in the near future.
He was considered a protégé of outgoing CTS president Jeffrey Lowinger, who had brought Chui into Cubic from Ireland-based power management company Eaton. Chui was director of emerging technology for Eaton, considered a more junior position than the job he would take at Cubic.
Without Lowinger at the helm, Chui’s days were considered numbered at Cubic, and Torrellas wasted little time in dismissing him. In his message to employees today, Torrellas credited Chui with developing “strong customer relationships,” as well as mentoring colleagues “both in and outside of his function.” He added that Chui had “initiated the McMaster academic engagement, led the SAFe transformation (which sought to make CTS teams more agile and effective in the market) and grew the engineering center of excellence internationally.”
But with the most senior engineering role in CTS–a post he held for three years–Chui would inevitably receive a good part of the blame for Cubic’s current problems, including losing a major contract in Melbourne, Australia, earlier this year and falling behind on delivery of several projects.
As one insider put it, Cubic has failed to sufficiently advance its technology and innovate its products, hurting the company in the market. And as the problems arose, Chui was not seen as acting assiduously to correct them, said a source.
More Execs Headed for Exit?
Some believe Torrellas is also looking at dismissing senior executives or directors of business development, engineering and products. That includes bringing about accountability for the contract losses in Melbourne and one more recently in the U.S. city of Atlanta, where it was the incumbent vendor, as Mobility Payments reported.
Some industry observers expect another round of layoffs, following one that made an estimated 225 employees redundant in late summer–though a company spokeswoman denied that more layoffs are planned.
Cubic Corp. has millions in quarterly debit-service payments to make and ratings agency Fitch was not impressed with progress by private-equity owned Cubic, which is also a defense contractor.
Fitch in late July revised Cubic’s credit rating to negative from stable and downgraded its rating to B-, a low rating.
While the ratings agency projected CTS would see low double-digit revenue growth in both 2023 and 2024 and liked the vendor’s “revenue visibility” from its largely sole-sourced contracts with transit agencies lasting several years, it was concerned by Cubic’s risks. Among those were whether Cubic would adequately carry out its “remaining cost-cutting initiatives,” as well as winning its contracts up for renewal, navigating supply-chain issues and maintaining a “technological advantage over competitors.”
Mobility Payments has learned that Cubic is again renegotiating its agreement in Boston for the much-delayed Massachusetts Bay Transportation Authority fare project, which is being financed as part of a public-private partnership by John Laing.
Cubic is also facing major tests for whether it can keep large contracts in cities where it is the incumbent vendor–in London, Sydney, along with Miami–as well as whether it can win new contracts for procurements in Ireland, Philadelphia and Toronto, as Mobility Payments reported.
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