Workers Edgy About SoCal Edison’s Plan to Buy SDG

Workers are usually the ones who get bashed in the sort of big-money takeovers that Southern California Edison is planning, a deal that would make Edison the largest investor-owned utility in America.

Edison has a reputation as a kindly corporate giant. However, that reputation is belied by the fact that its executives are so cavalier about the concerns of thousands of its employees who are worried about their future if Edison’s parent, SCEcorp, takes over San Diego Gas & Electric, itself no midget in the business.

As in so many other financial maneuvers by corporate manipulators, the workers are not the only ones worrying about the takeover move. These things have broad ramifications.

Consumer groups are worried. State Atty. Gen. John Van de Kamp warned in a formal report to the Public Utilities Commission that Edison customers potentially face “especially severe” increases in monthly bills if Edison takes SDG&E; under its broad wings. Edison doesn’t think rates will rise.

Environmentalists are worried. They are protesting the possibility of increased pollution in the Los Angeles or San Diego area, depending on where power generation is consolidated to increase efficiency.

Some Edison shareholders are worried. They argue their stock value will go down because SDG&E; shareholders have been promised an increase in the value of their stock, apparently at the expense of Edison stockholders.

And many San Diegans, including Mayor Maureen O’Connor and members of the Chamber of Commerce, are fuming over the idea of “the Los Angeles raiders” absorbing the highly profitable, rapidly growing San Diego-based company.

Many of the company employees, though, say they are the most endangered by the takeover plan not only because that is the usual pattern in such cases, but because of Edison’s labor relations policies.

For instance, in its last proxy statement to stockholders, Edison promised it “will provide fair and equitable work force reductions for non-union employees” if it acquires SDG&E.;

Edison executives glaringly omitted their thousands of unionized workers from the promise.

When legal monopolies such as utilities are involved in a takeover, more is needed to complete a deal than just masses of money. There are other obstacles, such as winning the approval of the PUC.

So state Sen. Herschel Rosenthal (D-Los Angeles) wants the state Legislature to ask the PUC to make sure Edison includes its union workers in its promise of fair treatment.

Rosenthal introduced a bill recommending that the PUC look carefully at the impact of the proposed takeover on the environment, shareholders and on both union and non-union workers so that all are treated in a “fair and reasonable manner.”

Edison at first opposed the bill, and still is not supporting it. But the firm has dropped its official opposition, according to Michael Peevey, an Edison vice president. (Ironically, Peevey was once a strong union supporter and served as both research director and legislative representative of the California AFL-CIO. Peevey insists, though, that Edison’s policies are not anti-union.)

Perhaps the company decided to adopt a neutral stand because it knows it can count on the PUC to continue to oppose Rosenthal’s “fair and reasonable” provision.

The PUC, remember, is run by appointees of business-oriented Gov. George Deukmejian. And it argues, just as Edison did, that the company’s union workers don’t need the agency to look out for their interests because they are protected by their union contracts.

But based on Edison’s track record, its workers cannot comfortably rely on those contracts. It seems they have to fight every inch of the way to get what they think is fair treatment.

A hefty 200 grievances against Edison were filed per 1,000 members of the International Brotherhood of Electrical Workers Local 47 last year. Members of the Utility Workers Union filed grievances at even a higher rate.

To understand how bad that record is, note that only 32 grievances were filed per 1,000 members of the union at SDG&E.;

There are a seemingly endless number of other general complaints against the company that worry Edison workers.

For instance, as a monopoly, Edison’s profits are regulated by the PUC, but the company has found a way to partly get around that limitation on its income.

The federal government has ordered Edison and other utilities to buy energy from firms that produce it through solar, wind and co-generation methods. That encourages production of energy without using so much fossil fuel--a great idea.

The catch is that profits from the alternative energy sources are not controlled by the PUC. So to take advantage of that wrinkle in the law, Edison created a subsidiary, Mission Energy, and buys much of its energy with no PUC limits on profits from its very own Mission.

The unions are disturbed about Mission because much of the work at the subsidiary is done by non-union workers, diminishing the work available for both union and non-union workers at Edison’s primary facilities.

The unions blame SCEcorp President and Chief Executive Howard Allen for the troubled labor relations at the firm, and that’s why, they say, they worry about the future of workers when Allen and his team get vastly more power in a merged corporation.

All those worriers may be upsetting themselves needlessly. Maybe all will work out to everyone’s advantage.

But past experience in this merger-mania era strongly suggests that the worriers’ concerns may be well justified because there are many losers--especially workers--when more and more power is concentrated in fewer and fewer hands.