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Progress CEO seeks to reassure scared workers

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The message from Progress Energy CEO Bill Johnson to his jittery employees can be boiled down to: focus on your job and safety, change happens, be patient, trust me and I don’t know.

Plus: Do not talk to employees at Duke Energy.

Johnson did his best to calm, cajole and motivate about 1,500 Progress employees on Wednesday, two days after Raleigh-based Progress announced it would merge with Charlotte-based Duke to form the nation’s largest utility company. Hundreds of positions will likely be eliminated in Raleigh and in Charlotte as the two electric utilities consolidate operations to trim operating costs.

“For the majority, the vast majority of employees, this is a better opportunity,” Johnson assured his utility troops, according to a transcript of the meeting Progress filed with the Securities and Exchange Commission. “You get to grow your career in a bigger, more robust company, right? … Those are facts.”

For 70 minutes Johnson, and several of his senior level executives, fielded employee questions about the merger, which will take a year to finalize. Later that day, Johnson noted that the meeting was positive in tone -- a relief when considering that CEOs who sell their companies have become targets of opprobrium, even threats of physical violence, from employees and the community.

Many within and outside the company are still in shock over the bombshell that Progress will end its 102-year run as an independent company. Workers had assumed several years ago the subject was off the table after then-CEO Bob McGehee quelled takeover rumors and in a memo assured the employees he wasn’t shopping the company around.  

Now it turns out Progress couldn't keep the suitors away. As Johnson told the crowd: “We haven’t had to solicit any discussions, people are discussing things with us all the time.”

That was small consolation for the workers whose lives may soon be upended.

“I’m a single woman who lives alone,” came the first question. “I’ve never been through a merger before. I’m scared. I have a mortgage, car loan, other bills. What would you do if you were in my shoes, Mr. Johnson?”

Progress barred journalists from the session, held at the Progress Energy Center for the Performing Arts. But the company decided to release a transcript of the meeting to give all Progress employees access to the same information, said spokesman Mike Hughes. The transcript was not edited or abridged, Hughes said.

The transcript reveals that employees are scared, confused and doubtful about the planned corporate union. It also shows that some enthusiastically accept Johnson’s rationale for the merger: that it will create a bigger, stronger company, better positioned to finance nuclear plants, build digital power grids, finance pensions, boost stock value and meet other challenges.

For Johnson and his senior lieutenants, this is just Week One of a year-long process to acclimate employees to the impending change. Many workers are still in denial and will go through the various stages of acceptance. Johnson assured the workers that many jobs will be eliminated through attrition, retirements and vacancies. He never mentioned layoffs, which are almost certain.

If this merger follows the standard pattern, workers at Duke and Progress will have have to apply for openings once an integration plan is in place with a new corporate structure. It’s expected that some are already updating their resumes rather than deal with a year of stress and uncertainty.

In many cases, Johnson was unable to satisfy all of the workers' demands: How many positions will be cut? (To be announced.) How will you keep us motivated in the interim? (You have to engage yourself.) How will you prevent employees from being over-worked and over-extended? (Let your manager know if you need help.) What about the analysts who say Progress shareholders didn’t get a good deal? (Some analysts are focused on short-term gains.)

“So you know what’s happening at the Duke meeting?” Johnson interjected at one point. “They’re saying, ‘It looks like a great Progress deal. How about us?’”

The workers were told to resist the temptation of calling their friends who work at Duke to discuss the merger. Such contacts could run afoul of antitrust laws that require the two utilities to operate separately until the merger is approved by federal and state regulators. Employees at both companies will receive a legal memo explaining the restriction.

What the transcript makes clear is the sense of sadness that permeated the meeting as it sunk in that the end was drawing near for Raleigh’s homegrown Fortune 500 company.

“You know we have great sentiment about this company, none more than me,” Johnson told the audience. “We have a great attachment here. But the option for us to continue doing the same thing the same way doesn’t exist now.”

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Duke and Progress Energy

MR Rogers and Mr Johnson got together for lunch and decided that they both could retire very rich.  That was a very expensive lunch for somebody who was not there.

the bottom line

big bill is going to get his.............it starts with a $ sign ..............and has really big numbers that follow.

the employees are going to get theirs too............its called the shaft.

 

its business folks

No matter where you work, having a job is not a guarantee for life. The purpose of companies or govt is not to create and maintain full employment. Companies open and close every day.  Why is this a shock?

I have gone through this with a large company that i thought would be my last employer. The first few months are "stay safe". Everyone is scared. Then the folks in charge do what needs to be done to make the company profitable for the investors and remaining employees. I am now somewhere else.

If you are not continually looking for another position or dont have an exit strategy, then you are only fooling yourself. Dont blame your employer. He promises to pay you while you are there. Thats it and all it should be.

"efficiency"

Most of the "efficiencies" that will occur are from retiring all the older employees and then bringing them back as contract employees.  Then they don't have to pay any benefits like heath insurance.  Both companies have significant numbers of employees in this rank and it's just going to get worse.
 

The worst part....

Duke is ran from a ceo that copied ENRON.........duke is a lets spend and deal company; lets take risks and make lots more money kinda company and the stock has been very RISKY ie screwed  tons of investors...........Progress has been a stable level headed company with a good stock for the most part......... but the 1 minute crash it had 3 months ago---very strange??? 

So why is the bad comp. taking control of the good one?

 

I assure you this is not good for NC or anybody other than the PROFITTIERS!

The worst part....

oops

His answer to the single woman question

In the transcript, I read his answer to the single woman question "What would you do if in my shoes".  It was so predictable.  Basically, he said:  Focus on your job.  Really? 

Wonderful way to dispel the notion that CEO's are heartless and only care about their own bottom line.   It becomes more true every day.  Gimme a break.

Let's be candid...

Even if Johnson didn't have a sweet deal in the new merged company, he'd still be getting a golden parachute worth millions of bucks. So either way, he's set. This won't be the case for the minions. [Sigh.] What happened to trust busting? Did that go out of fashion in the first half of the 20th century? Anyone heard of Baby Bell or Standard Oil? I agree with mike27513, this merger will only mean less choice, lower service quality, and higher cost. I have zero confidence that efficiencies brought on by eliminating duplication of functions will be passed on to the consumer. Get real.

Since I have been told that

Since I have been told that companies choose to locate here because of the fabulous schools, I guess the only reason Progress pulled out and sold itself is because of changes in WCPSS.

@red_balloon

The quality of education has been a reference to higher ed in the Triangle, not public schools. Social engineering has ensured that they've been a bust for about 30 years now. Arguably higher ed is in the same boat these days.

Rots of Ruck

This merger only makes sense if the redundant overhead is cut.  That means people who hold jobs that are redundant.  The means people will lose their jobs.  That means that Raleigh will take the biggest hit.

Very regretful, but we will pay lower utility bills because of the merger.

I'm not sure Progress

I'm not sure Progress employees will take the biggest hit. the average age of their work force is younger than Duke's since Progress already weeded out the old folks. A lot of Progress employees will have to relocate but I don't think a higher % of them will be let go.

Not lower electric buills

Even though Dukie power has lower rates, the reported merger [N&O yesterday], Dukie will own Progress as a wholely owned subsidary and  will keep the existing Progress customer rates due to cost of capital/generation costs of existing plants.

Future Generation capacity may come with lower costs due to less overhead ,  But Progress customers will still pay the higher rate into the forseeable future. And I'm certain  in the future Dukie will find a reason to keep them high.

High Rates, mass layoffs and an empty Skyscraper in Raleigh. Sounds like a great deal , huh?
 

Game Over Progress Energy Employees!

Get your resumes out there Progress Energy employees, Oh wait, we are in Year Three of the Obama Depression, never mind.

Here's how it goes- the buying company[ Dukie]  does a rack and stack of only critical employees and only the REALLY needed ones stay until the Dukie employees can learn and duplicate what needs to be done, 80+% will be laid off in the next couple years.

Progress customers will see less customer service and the same or higher rates, plus a large vacant skyscaper in Raleigh.

Sounds like a great deal , for no one except the Progress CEO

to summarize: "we don't know

to summarize: "we don't know if you will be laid off or not, or where you will work, or what your severance package will be if you get laid off, but keep working hard and we'll tell you what we want you to know when we want you to know it."

Same old drill

I've been on both sides of layoffs. What makes this particularly galling is that everyone knows the outcome going in. Many employees are going to lose their jobs. Customers are unlikely to see ANY savings or improvements from the newfound "efficiency".

If the Progress CEO is out of a job, he will receive a multi-million $ seperation agreement, so it really doesn't matter how he fares.  However, he has the audacity to tell workers not to worry because "change happens". He should have substituted another word for change for all the concern he has for his employees.

This change will not benefit customers, employees, our community, or anyone outside of the executive hallway. We're supposed to swallow that this is somehow a good thing. If the regulatory agencies allow this to go through they should be replaced. 

If I were a Progress employee

I would be updating my resume and networking furiously. I am afraid that you folks are about to be sold down the river. 

The CEO can mouth all his B-grade biz-school platitudes about "opportunities" and "efficiency" but we all know what this means: letting go all those pesky humans with their demands for pay and benefits, so the top folks can continue to rake in huge bonuses.

His talk of being better positioned to fund nuclear plants and digital networks is a sham, of course. Those nuke plans will be backed by the feds and digital networks will never happen unless they are forced into it (reference AT&T and their disgraceful network despite the millions they made off the iPhone monopoly) by competition or the government. Since they are now big enough to ignore Bev and her gang of cronies, and since there is now no competition, you can forget that.

What a load of horse hockey. My condolences to the reporter for having to read through it. 

"The CEO can mouth all his

"The CEO can mouth all his B-grade biz-school platitudes about "opportunities" and "efficiency""

Exactly what I was thinking.  It's almost like he picked up a textbook from one of his old MBA classes and read it word for word.    Nothing but meaningless suit-and-tie talking-head BS from what I can tell. 

How much is Mr. Johnson getting?

How much money is the CEO getting? And all of his LT? I never liked Duke Power and we will get nailed. Good job Mr. Johnson.

How Ironically Appropriate

... that the meeting was held at the Center For The Performing Arts.

I have seen this drill many times........

Been there... done that.....

Worked at a place that was part of a similar situation.  Worked there for 13 years.  One day, we were told that we had been acquired .... but don't worry.... our department was safe.... no problem

Thirty days later we were gone.  Shown the door.. booted..kicked out.  Oh yeah, our CEO got $54MM and we got kicked in the butt.

Seems fair..... the CEO makes a deal and we get thrown under the bus.  CEO says... good for business..... Who's business might that be?  His of course...

He will continue to get immeasurably more rich, and at least in my case and the case of many more thousands of us...... we got the door.

Thank you for a lifetime of work and effort... oh yeah here is a company hat.. it had the outgoing company and the takeover company name on it...should have had a picture of a large machine screw on it... cuz that is exactly what it was..screwed

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About the blogger

John Murawski has been a full-time newspaper reporter since 1991, with stints at Legal Times and The Chronicle of Philanthropy (both in Washington, DC), The Philadelphia Inquirer and The Palm Beach Post (in South Florida) before arriving at the N&O in December 2004. At the N&O he covers energy (nuclear, coal, renewable, efficiency), hydraulic fracturing (or "fracking"), public utilities and health care. His beat includes PSNC Energy, Piedmont Natural Gas, Duke Energy Progress, PowerSecure International, GlaxoSmithKline, Merck, Novo Nordisk, Pfizer, Biogen Idec and others. He has also contributed more than 30 book reviews on topics spanning botany, history, science and religion. You can reach him at 919-829-8932 or e-mail him.
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