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Allegheny stays

many jobs won't

October 08, 2003|by JULIE E. GREENE

julieg@herald-mail.com

Allegheny Energy Inc.'s corporate headquarters will remain in Washington County even though more than half of the jobs there are expected to be transferred to Greensburg, Pa., by March 1, a company spokesman said Tuesday.

The energy utility is consolidating its finance and accounting offices in Greensburg, which is southeast of Pittsburgh, said Allegheny spokesman Guy Fletcher. Positions from some other divisions at the headquarters also will move to Greensburg, but most of the jobs are in finance and accounting, he said.

The consolidation will result in 52 of the 92 jobs at the corporate headquarters moving to Greensburg, starting in December, Fletcher said.

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The move follows the late filing of Allegheny's 2002 annual report on Sept. 25, after company officials found accounting errors in financial statements and conducted a lengthy review before releasing the report.

Correcting those errors added $20.1 million to the company's net loss for the first quarter of 2002, according to a statement the company released with its annual report.

In recent months, company officials have stressed the need to strengthen internal controls as part of the company's financial improvement plan, Fletcher said.

"We believe relocating these will obviously allow us to run our operations more efficiently and effectively," Fletcher said.

Moving the 52 positions to Greensburg does not necessarily mean those 52 employees will move to Greensburg, Fletcher said.

Some employees may be transferred, while others may have to apply for positions in Greensburg or other jobs with the company, he said.

"Obviously, we're disappointed that jobs are leaving Washington County, but we understand the importance of Allegheny. ... We understand for the company to improve their internal finance and accounting departments, they're making this change," said Tim Troxell, executive director for the Hagerstown-Washington County Economic Development Commission (EDC).

Fletcher said Allegheny's presence in Washington County is not just in name.

"Our commitment to the area remains strong," he said.

Allegheny employs more than 400 people in Maryland and will employ 204 people in Washington County after the move occurs, he said. Besides the corporate headquarters on Downsville Pike southwest of Hagerstown, Allegheny has 113 employees at the Williamsport Service Center and 51 at the R. Paul Smith Power Station in Williamsport, he said.

Company-wide, Allegheny has 5,192 employees, Fletcher said.

Washington County Commissioners Vice President William J. Wivell, who is a regulatory specialist for Allegheny in the corporate offices, said he did not know whether the company will move his position to Greensburg.

Allegheny's top executives, including President, Chairman and Chief Executive Officer Paul J. Evanson, will split their time between their Hagerstown-area and Greensburg offices, Fletcher said.

"We looked at the need to have people in this part of the world and recognized the need to have finance and accounting areas in the same location," Fletcher said.

Troxell said the EDC is negotiating with a company looking to move its finance and accounting department to the Hagerstown area. If that happens, the company would be transferring and hiring people, he said.

Hopefully that move will occur, giving Allegheny employees who choose not to relocate another job opportunity, Troxell said.

The prospective company's finance and accounting department is similar in size to the number of jobs Allegheny's corporate headquarters is losing, Troxell said.

Fletcher said Allegheny still could sell the corporate headquarters building, but the plan would be to lease back space for the headquarters. The financially troubled company has been selling assets to raise cash to pay back a $2.4 billion financing deal secured in February that kept the utility from filing for bankruptcy protection.

Fletcher could not say whether jobs were in jeopardy at the Greensburg office.

"I can't speak to the individual performance of anyone or any group," Fletcher said.

Fletcher said company officials are not making a statement about one group being bad or good, but are making a structural change to consolidate the two operations to improve the company's financial performance.

Most of Allegheny's finance and accounting employees already are in the Greensburg Corporate Center, Fletcher said. Allegheny's 800 employees in Greensburg include a wide range of corporate support positions, such as human resources and information services.

Allegheny has 253 employees at a leased facility in Monroeville, Pa., east of Pittsburgh. The headquarters of Allegheny's energy trading subsidiary, Allegheny Energy Supply Co., is in Monroeville.

Fletcher said the move will not affect customer service.

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