The story behind those 'Allegheny' signs

April 10, 2002|BY BOB MAGINNIS

The story behind those 'Allegheny' signs

If you've driven anywhere in the Tri-State area, you've seen the signs: "Allegheny Power - Financially Sound, Morally Bankrupt."

At first they were homemade, painted on big sheets of plywood. Newer ones are smaller, professionally done plastic-and-wire affairs, like the ones political candidates use. But a slogan doesn't tell the story. To find out more, I spoke to Bill Sterner, president of Local 102 of the Utility Workers of America and to Guy Fletcher and Allen Staggers of Allegheny Power.

One thing neither side disagrees about is that Allegheny Power is profitable. In April of last year, the firm returned to the Fortune 500 after a four-year absence, with 2000 revenues of $4 billion, a 43 percent increase over 1999. The firm's stock price rose by 79 percent in 2000 and the firm posted record earnings.

In December of last year, Alan J. Noia was named "CEO of the Year" as part of the Platts 2001 Global Energy Awards for, among other things, his firm's acquisition of Global Energy Markets, which was expected to make Allegheny Energy Supply one of the nation's top 10 power marketers.


Despite that prosperity, Sterner said, the company is asking for concessions from its workers on things like health care and work rules, all while Allegheny managers get millions in bonuses.

On health care, Sterner said, "Their current level of contributions would be significantly reduced." But when pressed for a definition of "significant," Sterner declined to provide one, saying that "I don't want to report specifics in the newspaper.""

Allegheny officials also declined to provide too much detail about the health care proposal. But Fletcher said that Local 102 has its own medical plan, administered by the union, to which Allegheny contributes. The union's proposal would shift workers to a new plan, to which members would contribute less.

"In the first year workers would actually pay less," Fletcher said, adding that future years' costs would depend on how much health-care increases. Last year USA Today predicted that health-care costs would go up this year by an average of 13 percent.

On the work-rules issue, Sterner said that Allegheny is asking that 10-hour shifts be mandatory, while the union would like them to be voluntary.

That's not in conflict with what Allegheny wants, Fletcher said.

"What we have asked for is a voluntary four-day work week in which the employee would work, let's say, Monday through Thursday and then have four days off," he said.

But if enough people didn't volunteer then the company would need that to be mandatory, Fletcher said, so all the shifts would be covered to maintain service reliability.

On that issue, Sterner charged that the company has stretched out maintenance schedules, so that equipment is not getting serviced nearly as often as it did in the past. In addition, he said that the company is using contracted labor to do some jobs once done by the union.

It is true, Staggers said, that some schedules are different than they used to be and that some service intervals are longer than they once were. But Staggers said that's because after several maintenance cycles, many of the kinks have been worked out, so to speak, and new equipment that requires less attention has been installed.

On the contractor issue, Fletcher said Allegheny has always used some outside labor when necessary. Tree trimming along lines, for example, has been contracted out. But it's not correct to label that practice anti-union, he said.

"We highly value our work force. We have no plans to phase out the union," he said. In fact, Staggers said, the company last year successfully reached agreements with three locals of the International Brotherhood of Electrical Workers, including one at the R. Paul Smith plant in Williamsport.

Asked about the bonuses, Fletcher and Staggers said they're not bonuses, but something called "variable pay," available to non-union employees at all levels, based on the company's profitability.

Fletcher said the union had decided not to participate, but couldn't say whether they would have to give up their charter to share in that program.

Sterner also questioned why the annual shareholders' meeting is held at the Waldorf-Astoria Hotel in New York City, even though that's far from the areas Allegheny serves.

Because New York is "the financial capital of the world," Fletcher said.

Asked if there's a chance of reaching an agreement, Staggers cited the IBEW pacts inked in 2001 and Fletcher said that "Our goal is to resolve this through negotiation and reach a contract that is fair to both sides."

It's just a hunch, but given both sides' reluctance to get into the details on health care, that's probably the sticking point.

So many cents an hour and what time the shift starts is certainly of less concern to me than whether my children's illnesses will be take care of. But on the other hand, at a time when some medical procedures cost hundreds of thousands of dollars, businesses must be careful what they agree to. If both sides can resolve this issue, everything else should fall into place.

Bob Maginnis is editorial page editor of The Herald-Mail. newspapers.

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