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.”