TVA director says job cuts will be selective
KNOXVILLE (AP) — The Tennessee Valley Authority’s current efforts to trim costs and payroll are nothing like the 1980s when then-Chairman Marvin Runyon laid off thousands, TVA director Bill Baxter said Wednesday.
“He used an ax. Today, we are using a scalpel,” Baxter told the East Tennessee Industrial Council. “There are still costs we think we can get smarter about and get efficient about. But we are not using an ax.”
Runyon became known as “Carvin’ Marvin” for starting a succession of job cuts that reduced TVA’s work force from about 34,000 to 13,245 employees today.
TVA, the nation’s largest public utility, on Monday extended early retirement incentives to further reduce its numbers.
The agency said it needs to cut costs to reduce its $25 billion to $26 billion debt by up to $5 billion during the next decade and prepare for electric utility deregulation.
TVA officials refuse to say how many employees they want to leave voluntarily or face layoffs.
“Well, we don’t know. Honest answer. Because it is a moving target,” Baxter told The Associated Press.
It is clear many employees will be exempt, including most of the workers directly involved in operating TVA’s three nuclear plants, 11 coal-fired power plants and 17,000-mile transmission system. That could be as many as 10,000 workers — a core group under TVA president and chief operating officer Ike Zeringue.
“The voluntary (retirement) programs will be limited and apply only to certain … functions,” Zeringue said in a memo.
“We’ve got to keep running the store,” Baxter said. “We are not going to compromise safety or the performance of the system.”
TVA’s average employee is 46.4 years old and has at least 17 years of experience. Baxter said 35 percent of them are within five years of retiring.
TVA is actively recruiting employees to replace senior workers in the plants, but the retirement incentives — one week of pay for every year worked over five years and two years’ medical benefits — could appeal to many.
“My instinct is that the vast majority of reductions we are going to have are going to be voluntary,” Baxter said.
“By the time we get to involuntary, we are looking at a relatively small number and it will be spread out across the TVA. No one area or community is going to feel an inordinate impact.”
Job cuts among full-time employees is only one of three areas TVA is analyzing. There also are contract employees that can be eliminated and big-ticket capital expenses that can be delayed.
TVA employs 10,324 contractor employees. Nearly, 8,200 are assigned to specific tasks, such as the five-year, $1.8 billion restart of a Browns Ferry nuclear reactor in Athens, Ala., scheduled to go online in 2007. They will be gone when their assignments end.
But TVA also employs 2,137 “staff augmentation” workers, from secretaries to engineers, who work alongside full-time TVA workers with no end to their assignments in sight.
“We need to reduce the number of contractors,” Baxter said, promising to end a practice of TVA employees taking early retirement and then coming back to the same job as a contractor. “You can’t let happen what has happened in the past.”
TVA managers have tentatively identified $247 million in capital expenses — about 16 percent of the 2004 capital spending budget — that can be postponed or scrapped. Baxter said the amount could change before the three-member TVA board votes on it.
March 15 is the deadline for employees to volunteer for early retirement and March 29 is the deadline for managers to approve or reject them. Layoff notices, if needed, would go out April 22.
TVA provides electricity to 8.3 million consumers in Tennessee and parts of North Carolina, Virginia, Kentucky, Georgia, Alabama and Mississippi.
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Tennessee Valley Authority: http://www.tva.gov
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