Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 1, 1995 TAG: 9508010048
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
E. Linn Draper Jr., AEP's chairman, president and chief executive officer, said the job cuts are part of a previously announced restructuring of the Columbus, Ohio-based company aimed at making it competitive within a changing power industry. Competition already has come to the wholesale power market; and thanks to deregulation, power companies face the prospect of competition for power sales directly to consumers and businesses.
The 1,200 jobs that will be cut represent 23 percent of the 5,200 people working at AEP's fossil-fuel power plants. AEP began holding informational meetings with workers and union representatives Monday.
In Virginia, 10 jobs each will be eliminated at the company's Clinch River plant in Russell County and Glyn Lyn plant in Giles County, the company said. In West Virginia, 505 jobs will be cut at six plants, four of which either are owned by Apco or held by Apco in joint ownership with Ohio Power, another AEP subsidiary. The remainder of the jobs will be cut at plants of AEP subsidiaries in Ohio, Kentucky and Indiana.
John R. Jones, AEP's senior vice president for fossil fuel and hydro power generation, estimated that the job cuts would save AEP at least $25 million yearly. But until the number of workers who accept the company's severance offer or take early retirement is known, it is not possible to put an exact figure on the savings, he said.
Jones said the company hoped many workers would find the company's severance plan attractive, eliminating the need for involuntary layoffs. The company also allows workers with at least 10 years of service to take early retirement at age 55 and be eligible for retiree medical coverage. But no incentives are being offered for workers to take early retirement.
Under the severance plan, workers will receive a half-month's base pay for each year they have worked, up to a maximum of the equivalent of 12 months pay. The company also will pay its share of workers' medical insurance premiums for 12 months. The plan allows workers to continue medical coverage for an additional six months and group term life insurance for up to 12 months at their own expense.
The jobs cuts will begin in early October and extend into 1996. AEP has asked workers to let the company know by the end of August if they plan to take the severance package or early retirement, Jones said.
Elimination of the jobs is the result of studies on improving performance that were made at individual plants beginning in early 1994, Jones said.
In the past, generating units have shut down for maintenance on a yearly basis; but, in the future, maintenance shutdowns will be held only once every two or three years, Jones said. Now, the plants are staffed for both "running maintenance," conducted while a plant is operating, and for maintenance during shutdowns. In the future, the plants will be staffed only for running maintenance, Jones said.
The change in the way maintenance is done and a move toward a team management approach have allowed AEP to cut the size of its work force, Jones said.
In June, AEP announced that it was restructuring its business across its seven-state service area into functional groups that generate and deliver power. The company plans to sell power under the AEP brand name; and the company's subsidiaries such as Apco will continue to exist only as legal owners of AEP property.
The job cuts announced Monday are not included in among roughly 200 jobs Apco President Joseph Vipperman said in June would be eliminated from the company's 4,600 full-time work force in Virginia and West Virginia. Those cuts are the result of an internal study. About 50 of those jobs already have been cut, said Wayne Hasty, an Apco spokesman.
Apco serves roughly 840,000 customers evenly divided between Virginia and West Virginia. They are among 7 million people served by AEP units in those states and in Ohio, Indiana, Michigan, Kentucky and Tennessee.
by CNB