THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, September 7, 1994 TAG: 9409070423
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By TOM SHEAN, STAFF WRITER
LENGTH: Medium: 51 lines
Virginia Power estimated Tuesday that it will save $200 million over the next six years from early-retirement and voluntary-separation programs offered to its employees earlier this year.
Virginia Power, the state's largest electric utility, said 1,155 employees have departed under the programs and predicted that another 245 or so will leave shortly. Together, that equals almost 12 percent of Virginia Power's work force before the programs were announced.
Virginia Power, whose work force reached a peak of 13,900 in 1989, said it expects to have 10,800 employees by the end of this year.
Among those leaving are more than 200 management-level employees, including four vice presidents and 16 managers, the Richmond-based company said.
Response to the two programs was greater than expected, but the utility will maintain its existing level of service, James T. Rhodes - Virginia Power's president and chief executive officer - said in a prepared statement.
The pace of cost-cutting at Virginia Power became an issue in a raucous dispute earlier this year between executives of Virginia Power and its parent company, Dominion Resources Inc.
In mid-June, state regulators launched an investigation into relations between the two companies, saying it was concerned that friction between Virginia Power and Dominion might trigger an exodus of veteran managers and threaten the reliability of Virginia Power's service.
Dominion and Virginia Power settled their differences in mid-August.
``The dispute may have played a role'' in the stronger-than-expected response to the early-retirement and voluntary-separation programs, said William H. Byrd, a Virginia Power spokesman. ``But it is difficult to say how much. A lot (of the responses) came after the settlement announcement on Aug. 15.''
Virginia Power figures the two programs will cost $75 million but expects to recover that amount by the third quarter of 1995, Byrd said.
The early-retirement program added five years to an employee's actual age and five years to his or her credited service for calculating retirement benefits. Those taking early retirement also received six months of separation pay and six months of company-paid medical insurance.
The company's voluntary separation program offered six months' pay and $5,000. Participants also received six months of company-paid health and life insurance. by CNB