Should DWP Lay Off 2,000 to Pay Debt?

To pay down its $4-billion debt and prepare for the impact of energy deregulation, Los Angeles Department of Water and Power officials have unveiled a reorganization plan calling for the layoffs of 2,000 employees, the most in city history.

About three-quarters of those laid off are expected to be engineers and managers, with front-line, blue-collar electrical worker jobs expected to be spared.

Those opposed to the plan believe that DWP workers will be paying the price for bad management decisions in the past, while proponents claim that layoffs are necessary to save the utility.

Are DWP layoffs the best way to resolve the agency’s debt problem?

Bob Duncan, executive director, Engineers and Architects Assn.

“Now that we’ve had a chance to review the thousand-plus positions [DWP] anticipates cutting back, I believe these layoffs are ridiculous and ill-conceived. . . . They’re eliminating the people who protect the environment. They’re cutting back chemists, lab technicians, material-testing techs. How are we going to comply with the federal regulations? . . . We’ve done lots of affirmative action hiring. I’m afraid the women and minorities will go out the door first. Now we know what the numbers mean. They mean disaster.”

S. David Freeman, DWP general manager:

“We have a short period of time to pay off $4 billion of debt. Every day that we delay in getting started, it gets harder to pay off. Roughly speaking, the layoffs will save about $150 million a year. If we took the residential rates and increased them 20%, we’d get the same amount of money. But imagine the hue and cry if I did that. . . . I could cut everybody’s salary at DWP, but it would take a 25% cut in pay, and that would run off all the people I need to keep the lights on. . . . What we’re doing is not out of line with the other utilities. . . . If we don’t become competitive, we’re out of business and everyone will lose their jobs.”

Los Angeles City Councilman Mark Ridley-Thomas: “This is a predictable way to resolve an impending crisis. The question I asked the general manager of DWP is whether this is the fairest way to handle it. My concern is whether we’re equally concerned with equity and efficiency. . . . It is imperative that DWP take immediate steps to ensure that the affected workers are offered those services which will allow them to transition to new jobs, retirement or pursue other options. . . . By recognizing that quality-of-life issues cannot be ignored in difficult times of transition, the DWP is acknowledging that many of these employees are not only city employees, they are city residents.”

Brian D’Arcy, business manager, International Brotherhood of Electrical Workers:

“[Layoffs are] the only way at the moment to begin downsizing an organization that’s been out of control for some time. We have to bring down costs; it’s a matter of necessity. . . . [Downsizing] is usually done on the backs of the blue-collar workers, but . . . this time it’s the managers and engineers. . . . I’m thrilled that someone’s had the guts to eliminate the layer upon layer of personnel. . . . We’ve taken our hit; it’s time for them to join the party now. . . . I hate for anyone to lose their job, but the longer it’s dragged out, the worse it is for everybody.”