(Updated, 3:00 p.m.)
WALTHAM, Mass. – Electric and natural gas utility National Grid is planning a reorganization of its U.S. business that will eliminate 1,200 jobs in management and administrative positions, the company said Monday.
The utility expects that the job cuts and restructuring the company along geographic lines rather than business lines to save about $200 million by March 2012.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
Learn More
In an interview Monday afternoon, National Grid U.S. President Tom King said it is too early to know where the reductions will take place. But, of the approximately 900 National Grid workers in Rhode Island, about 200 are considered management and subject to potential elimination, King said.
The company said it employs 18,000 people in the United States and the layoffs will affect about 7 percent of its work force.
The plan will transition National Grid “to a more state-focused management from the existing global line-of-business organization established in 2007,” a news release said.
In an interview with reporters, King called the move necessary to keep electric and gas rates at levels approved by state regulators. Unwillingness by regulators to grant requests for rate increases has provided the utility a “clear indication” of how much National Grid can expect to collect. Now, the utility must arrange its organization accordingly, King said.
In Rhode Island, the utility was “barely” making a profit, he said, adding: “We’re not delivering the financial performance that we need to in Rhode Island right now.”
In November, National Grid, based in London, said it was targeting an 8 percent growth rate in its dividend. The company also anticipated its operating profit and cash flows would rise in 2011 and called the risk from regulation “low.”
But on Monday, King said the expected growth would not come from National Grid’s U.S. business but rather from its operations in the United Kingdom.
“Our objective is to ensure that investors are confident that the U.S. has the ability to contribute [financially],” King said.
Part of the plan to accomplish that includes appointing regional presidents. National Grid picked Tim Horan, a senior vice president, to lead the utility’s operations in Rhode Island and New Hampshire. King said that Horan would also be charged with completing selling off National Grid’s business in New Hampshire.
Separately, the utility named Marcy Reed, another senior vice president, as president of Massachusetts.
King said that these new regional presidents would be focused on responding quickly to local concerns and charged with identifying the positions that will be eliminated during the reorganization slated to commence in April.
And while the company may be restructuring along state lines rather than business lines, gas and electric bills will continue to arrive separately in Rhode Island. Spokesman David Graves said such a move would require the approval of regulators and a major upgrade the company’s billing software.
National Grid is Rhode Island’s largest utility where it delivers electricity to 482,000 customers and natural gas to 223,000 customers.
I’ve watched National Grid install my service. 2 guys working and 4 guys without a clue. Had to deal with 4 different contacts prior to anything getting done, AND send them $13K. I would like to see them reduce the payroll 67%, keep the good workers and lower our bills. PS your union is killing US.