DWP Chief Holds His Ground on Layoffs

With contract talks at a standstill and time running out before the first wave of layoffs begins Monday, worried Los Angeles Department of Water and Power employees confronted the utility’s general manager Saturday, but won no commitment from him to protect their jobs.

Taking a hard line with a soft voice, S. David Freeman told a community meeting in South-Central Los Angeles that the nation’s largest municipal utility has no choice but to dramatically shrink its work force as it prepares for the coming free market for electric power in California.

“It’s literally a matter of life and death for the utility,” Freeman said.

In a sidewalk confrontation with a small group of workers after the meeting, he also refused to discuss the breakdown in negotiations over severance payments and enhanced retirement benefits for displaced employees. He blamed their union for the stalemate.

“I have negotiated for four months,” Freeman said before turning aside questions from the workers. “I’m not interested in a sidewalk debate with you.”

That did not sit well with the employees, who later accused Freeman of refusing to bargain in good faith and not telling the truth about the true impact of the job cuts.

Nearly 650 DWP workers, all of them members of the union representing engineers and architects, are expected to lose their jobs.

In an interview, Bob Duncan, executive director of that union, the Engineers and Architects Assn., said Freeman was exaggerating the savings that the layoffs would generate. And he said contract talks broke off Thursday night because Freeman couldn’t come up with money he had promised for a severance and buyout package.

The general manager denied the charge, saying he cannot offer more than the City Council has authorized.

Freeman’s stance toward the engineers group reflects a deep frustration with the deadlock between labor and management. The first group of 150 employees will lose their jobs Monday evening, Freeman said, unless the union can obtain a court order that morning to block the layoffs.

The scheduled terminations will mark a crucial turning point in a four-month fight between Freeman and the union over downsizing the work force of the city’s public power system.

The utility chief won approval from the City Council to offer a $346-million package of cash payments and enhanced retirement benefits for as many as 2,000 DWP workers who agree to leave voluntarily instead of being laid off.

The utility’s most powerful union, the International Brotherhood of Electrical Workers, and the organization representing the department’s managers have agreed to the deal, but the Engineers and Architects Assn. has not.

That group wants its younger members, who are not eligible for retirement benefits, to receive a year’s pay. Freeman has offered severance payments of $25,000 to $50,000, the same amount younger members of the other two unions will receive.

The difference between the two sides amounts to about $8 million. After having sweetened the package several times, Freeman has refused to go any further.

The veteran utility executive told a diverse audience of 100 people at Trinity Street Elementary School that unless the city pays off $4 billion in debt, most of it tied to a massive coal-fired power plant in Utah, the DWP will be unable to survive in a competitive market.

“If we don’t really cut our costs, we are going to be in more trouble than we’ve ever been,” he said. “We’ll probably be out of business.”

In an era in which the DWP is no longer building power plants, he vowed to reduce “the number of engineers down to what we need to keep the lights on today and tomorrow. . . . The work is no longer there,” he said. “It’s a traumatic thing to deal with, but we have to deal with it.”

That brought a sharp retort from a DWP engineer, who said he had never worked on designing power plants in his 14-year career at the utility.

The engineer, who declined to identify himself, said he and his associates, all of whom are threatened with layoffs, design the equipment needed to serve DWP customers from South-Central to Wilmington, including school campuses that are installing air conditioning. Soon, no one will be available for such tasks, the man said.

Another man told Freeman that any layoffs would have a devastating impact on minority and female employees, and he threatened to boycott the utility if the DWP turns from racial diversity.

“We are extremely sensitive to the problem you raised,” Freeman replied. “This utility has a more diverse work force than perhaps any utility in America. A majority of the people at DWP are not white males.”