Redflex CEO resigns as market for traffic cameras weakens
As US Cities Drop Camera Programs, Revenues Fall For US Company
James Saunders of Redflex Traffic Systems will leave to "pursue other opportunities," according to a statement distributed Monday by the company. He will stay with Redflex through the end of June, though company officials said they could shorten the timeframe of his departure. There's no word yet on his replacement.
Redflex, a maker of red-light and speed cameras, has faced financial turmoil as cities across the United States have shed automated traffic-enforcement programs. Citing a hostile legislative environment, the company warned investors earlier this month that it estimated losses of $10.5 million this year after posting a $5 million gain in fiscal year 2014.
Even among its still-existing clients, the company said that it faced "lower than anticipated incident rates," in a presentation to investors.
Saunders will leave the company, a subsidiary of Australia-based Redflex Holdings Limited, in much the same position as he found it – troubled. He took over as president and CEO in July 2013 amid a housecleaning that resulted from allegations the company had bribed Chicago officials in order to win $124 million in contracts.
His predecessor, Karen Finley, was indicted by the Department of Justice last year for her role in the scandal, which allegedly included bribes of $570,000 in cash and other improper benefits for an assistant city transportation official. Another defendant in the case has pled guilty. Finley is awaiting trial.
Traffic experts have increasingly questioned the merit of traffic cameras. Proponents believe they make roads safer, though several studies have shown mixed results; they find cameras reduce right-angle car accidents at intersections but increase rear-end crashes.
Critics believe the cameras are nothing more than cash cows that generate revenue for financially strapped municipalities and the company, which often receives a cut of the revenue that can run as high as 40 percent (revenue sharing can vary from contract to contract).
As a result of increased attention from motorists and politicians alike, the number of traffic-camera programs has decreased. The number of US red-light camera programs peaked at 540 in October 2012; today it stands at 464, according to figures from the Insurance Institute for Highway Safety.
Speed camera programs have increased from 112 to 137 today in the same timeframe, but they peaked from a high of 140 six months ago as politicians and voters have soured on both forms of automated enforcement.
Redflex officials said Saunders played an important role in maintaining relations with government customers and seeking out additional revenue streams.
In a written statement announcing his departure, he said, "the company is pursuing exciting new markets and is well positioned with a strong management team and engaged board. I leave Redflex in good hands."
- Most and least efficient car companies
- Fastest-depreciating cars in the United States
- Find and compare 2017 Models