[BETA] Fortnightly

Downsizing

"The short answer is 'yes'. . . . Utilities think they have to cut their costs in order to compete. The easiest way to cut costs is to downsize, get rid of people . . . which means they stop doing the work. And the result is a threat to the reliability of service.

"Pacific Gas & Electric (em this was back in 1994 (em the state commission [announced plans] to introduce competition, and PG&E reacted in a way that to cut costs, to lower their kilowatt-hour rate, was to cut out a lot of people.

"In early 1995, the company said they didn't get enough takers [for early retirement] and therefore they were going to institute layoffs. . . . Heavy storms occurred in early part of 1995 . . . finally the company called off those layoffs. I think then they began to realize some of the problems they were beginning to have, and, of course, they sat down and this is when we formed our partnership."

s Harmony

"What we did, it was like calling a truce to our war, and the company said, 'Look, we want to bring in an outside consultant in terms of maintenance,' and they brought us into that right away and we were part of interviewing those people. When they did their report, the report was announced to us simultaneously. Basically, the report was very critical of some of things that PG&E was not doing. Then, as a result of that, we have worked with them . . . so we have been workers as partners with PG&E, putting in place some maintenance programs and systems to take care of the distribution system. . . . They're bringing us in right at the beginning on a lot of these issues. It's a partnership."

s Working It Out

"[PG&E] is talking about performance-based ratemaking and if you set that up in a way that rewards the company for properly maintaining its system, then that's what our interest is because that's jobs.

"The area where we are going to have some problems is in the area of generation. . . . [The California Public Utilities Commission] wants them to divest all their generation. . . . I had suggested to them the idea of ESOPs, employee stock-ownership plans.

s The Future

"A unionized workforce can be cost-competitive. . . . This is the mutual gains approach to issues where we are working with

different committees, these

different departments, on how to be more competitive or be more cost-conscious." t

Jack McNally is business manager/ financial secretary of the International Brotherhood of Electrical Workers Union Local 1245, representing 20,000 members, including those at Pacific Gas & Electric and Sierra Pacific Power Co. He also is vice president and executive council member of the California State Federation of Labor.

s Downsizing

"I would say 'yes' . . . and the reason is because utilities are under such pressure to cut costs. All industries are. But we're not that different. Everybody's

downsizing. . . . Now the realization