THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, February 11, 1996 TAG: 9602100349
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Long : 218 lines
Standing deep in a stand of tall pines one night during last weekend's ice storm, Randy Buffington was reminded of how perilous working as electric-utility lineman can be.
He was getting ready to repair a damaged line off Blackbeard Road in Virginia Beach when the noises started. One crack. Two. Several more. ``Limbs were breaking all around,'' Buffington recalls. ``The only thing I could do was start running for the nearest opening.''
Buffington got out unscathed. And thanks to him and 800 other Virginia Power workers who hit the roads of southeastern Virginia during the unusually harsh weather, the utility restored lights and heat to nearly 140,000 local customers in just over four days.
It was a ``world-class'' response, says Thomas A. Hyman Jr., vice president of the utility's eastern division. ``I just couldn't be any prouder of the employees. . . . They have to feel good about the job they've done.''
The morale boosts that such accomplishments provide may prove short-lived.
Virginia Power, the very same utility whose managers heaped praise on employees for their response to the recent crisis, is drastically downsizing under a reorganization called Vision 2000.
In the past year, more than 1,000 of the Richmond-based utility's 10,500 workers have been told they're not needed anymore. It's the biggest wave of terminations in Virginia Power's history. And it's not over yet. Two of the company's three main operating groups just began the reorganization process.
Some employees caustically joke that a name change for the reorganization may soon be in order: to Victim 2000.
Beneath the dark humor, however, workers like lineman Buffington are raising serious questions about the ongoing changes at the state's largest electricity provider.
They worry about how they'll get their jobs done with fewer hands pitching in.
``I don't think we have enough people now to do the work that we've got,'' says Buffington, a 13-year veteran. ``We're only human beings.''
But the workers are also disturbed by what they see as the twilight of a proud period for their company.
During the 1970s, Virginia Electric & Power Co.'s skyrocketing rates, poor maintenance and slipshod service earned the then-VEPCO scorn from politicians, regulators and the public.
Renamed and re-energized, the new Virginia Power climbed to the top rungs of electric utilities in efficiency and reliability during the '80s. And when it came to pay, benefits, training and other things that are important to workers, it stood out as unusually benevolent during that decade which ushered in what many see as today's era of boundless corporate greed.
The utility's approach boosted worker loyalty and morale, which further amplified its culture of success. But now under Vision 2000, many workers believe, that culture is in danger.
``All of a sudden, there's been this drastic change,'' says Vernon Carr, a welder at Virginia Power's Chesapeake Energy Center and a 28-year veteran of the utility. ``People weren't ready for it. It's just hit everybody hard.''
Utility managers say they understand workers' concerns. But they say that just about everybody - customers and remaining employees included - will benefit from the changes.
``Obviously, there's some anxiety, yes. That's going through corporate America right now,'' says Hyman, who oversees 1,700 field and customer-service employees, mostly in Hampton Roads and northeastern North Carolina. ``But I honestly believe . . . that in our territory our employees think we're doing the right thing.''
``I think they'll work themselves through this,'' adds John W. Ely, a senior manager in Virginia Power's fossil-fuel and hydroelectric power group. ``I think that a larger portion of them than will admit it in the short term understand what we're doing and why we have to do it.''
The ``why'' is competition, Ely and his fellow executives say.
For utilities, it's already here when it comes to sales of power to wholesale customers like electric cooperatives and cities. They are free to shop for power from different utilities.
Now, regulators and lawmakers are cracking open the door to a free-market competition to sell power to retail customers like factories, shopping malls and homeowners.
As this new competitive era dawns, utilities are cutting costs and keeping a lid on rates. In a free market, particularly a commodity market like electricity sales, the lowest-cost player generally wins. And Virginia Power executives say they don't intend to lose.
Ely says the key question for the company's reorganization architects, including himself, is this: ``Do we have to do it as fast?''
Many, if not most, employees think not. They say the utility has time to try less drastic measures to reduce employment: attrition, early retirements, voluntary buyouts.
Virginia Power relied on such measures to eliminate 3,500 jobs in the decade leading up to Vision 2000's implementation last March. Workers say it's in the utility's own interest to try voluntary measures again to avoid destroying the esprit de corps that company leaders had worked so hard to achieve.
Ely disagrees.
The prevailing sentiment among top executives, Ely says, is that they must cut costs now. Competition is coming faster than expected, he says, and that demands action.
Ely and others involved in the reorganization of Virginia Power's coal-fired and hydroelectric plant were the first to initiate widespread ``re-engineering.'' Over several months last year, they identified what they described as vast inefficiencies in work processes that, when eliminated, will save tens of millions of dollars annually.
Ely says he and other managers considered relying on attrition or offering incentives to shed workers.
After sizing up the weak job market, they decided voluntary separation wouldn't accomplish the several hundred job cuts they'd decided were immediately necessary. There weren't enough high-paying jobs elsewhere.
So the decision was made: terminate.
For salaried employees, most of whom were let go in January, the firings were tumultuous. Most didn't know until they day they were fired if they'd survived the cut or not.
That's because their terminations weren't based on seniority, but on a range of other factors, including past performance evaluations. Cushioning the blow, however, the utility offered an unusually generous severance package: up to 18 months' pay.
For hourly employees, the guesswork was easier. Seniority guided who'd be fired, allowing many employees who were cut from one job to bump into lower positions.
That, however, started a chain reaction that spread elsewhere in the company. About 85 low-ranking employees in Virginia Power's field operations and nuclear power plants were among those bumped into unemployment.
The bumping employees, many of whom started their new jobs on Thursday, will take cuts to lower pay grades. Some mechanics who once earned $20 an hour in power plants now make about half that as meter readers. For others the pay-cut process will last years, 10 cents an hour every four months until they reach their new grade.
For hourly employees let go completely, the transition to unemployment was rougher. Unlike their salaried counterparts, many will get only get one month's severance pay.
The hourly workers' union, the International Brotherhood of Electrical Workers, was offered a package similar to the salaried employees'. But union leaders declined. It would have required them to to surrender members' seniority rights and let management pick and choose whom to terminate.
The offer deepened the mistrust that many hourly workers feel toward management. They saw it as a gambit to bust the union. ``Do away with seniority,'' says one worker at the Chesapeake Energy Center, ``and you don't have anything left.''
With Vision 2000, Chesapeake and its sister stations are now in the spotlight. Utility managers and rank-and-file workers are watching for signs of how well the coal-fired and hydroelectric plants operate at their new, smaller manning levels. As the year progresses, the utility's field operations and nuclear plants will re-engineer, too. Problems at the other plants could heighten sentiment against further restructuring.
At Chesapeake the going has been rocky. The plant, which lost 53 of its 183 employees over the past two months, has had an unusually high number of unplanned shutdowns of its four generating units this year, concedes production director Larry Cridlin.
And last Monday, when Virginia Power hummed at an all-time record generating pace, the plant could muster only 85 percent of its capacity, Cridlin says.
But he blames the harsh weather and freak occurrences for the problems. Several workers at the plant agree it's too early to attribute the problems to smaller staff.
Under the circumstances, the employees have performed well, Cridlin says. Because losing co-workers was hurtful, he says the plant will hold a special workshop in the next several weeks on ``healing wounds.''
There won't be a returning to old ways of doing things, he stresses. The plant will be run leaner and differently, he says. If a piece of equipment breaks on a weekend, for instance, craftsmen may not be automatically called in on overtime if its ``redundant'' sister is still working. By waiting until Monday, he says, the fix can be done on straight-time pay.
Some workers recoil at such talk. Joe Kifus, a former mechanic at the plant, says it's a prescription for trouble. ``It looks to me like we're going back to the '70s,'' he says.
Kifus says he's concerned that Virginia Power will scale back on preventative maintenance, endangering workers' safety.
But Ely, a senior utility manager, says that's where it will draw the line. ``We will not ask anybody to do something that they have not been trained to do or put them in a situation where they are going to injure themselves,'' he says.
Kifus, who is chairman of IBEW Local 980's executive board, is one of the many Virginia Power workers getting used to a new job. He's now a groundman, essentially a lineman's helper.
``I'm starting over,'' he says. ``From working on turbines and high-tech equipment to digging a ditch.''
He's trying to keep a positive attitude. At 31, he's young enough to advance. And he knows a lot of people in field operations from his position as head of the union local's United Way campaign.
Hyman, the Virginia Power vice president, says he's confident most of the workers will adjust to their new positions and be accepted by co-workers.
But the incumbent workers don't sound like they're in a position to lift their new colleagues' spirits.
``Morale is at an all-time low,'' says Ron Pomeroy, a Virginia Beach lineman with nine years' service. ``People feel like they're going to lose their jobs.''
As Vision 2000 moves through his division, Hyman can't make any guarantees. But he insists that customer service, not cost-cutting, will be top priority in his end of the business. He's convinced that the reorganization has already paid dividends along those lines.
The utility's storm response demonstrated the benefits of Vision 2000, Hyman contends.
Last Monday, the company's three telephone customer-service centers, which have been beefed up in the past year, handled a record number of calls. Often-frantic customers were kept on hold 23 seconds, on average. That's one-third the average wait time for all of 1994.
And each of Virginia Power's two dozen districts sent workers to help in Hampton Roads, he says, an unprecedented backup that proved ``turfs'' are being eliminated. With those 325 out-of-town hands to supplement his division's 475 people in the field, ``we were able to jump on this thing quick and heavy . . . and work harder into the night than we usually do.''
All this support was great for his crews' morale, Hyman says.
But one event may not be enough to sustain that high.
Kifus, the mechanic-turned-groundman, says the overarching theme at Virginia Power is to do more with less. In this environment, many workers now feel more like costs than assets.
It's sad, Kifus says.
``Company loyalty built this company to what it is today, and they've just about destroyed that.'' ILLUSTRATION: Color photo
BILL TIERNAN/Staff
A Virginia Power employee works to repair a damanged power line Feb.
2 in Norfolk. A utility executive called the response to the winter
storm ``world class.''
by CNB