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www.DukeEmployees.com - Duke Energy Employee Advocate

Open Forum - Page 2

"If your morals make you dreary, depend on it, they are wrong. I do not say give them up, for they
may be all you have. But conceal them like a vice, lest they spoil the lives of better and simpler people."
- Robert Louis Stevenson

Open Forum - April 2005

Employee Advocate - www.DukeEmployees.com - April 25, 2005

Paul Anderson, Duke Energy chairman and CEO, hosted the Open Forum in Houston, Texas on April 13, 2005. He said that his carbon tax proposal is good for the country and good for the company.

Anything that he proposes will likely be good for Paul Anderson and good for the company. It remains to be seen if anyone else benefits. But this is an improvement over the past regime. Under it, all the great proposals only benefited the CEO and devastated everyone else.

It is interesting that the tax proposal overshadows any efforts made by the energy companies’ boy in office - G. W. Bush. His administration has erased environmental gains, erased the budget surplus, and erased a peaceful coexistence with the rest of the world. Even though Bush gives energy companies everything they want, all his actions pose a long-term threat to citizens of the US and the world.

Mr. Anderson admitted “You've got an Administration in Washington that says it's not a problem and we're not going to participate.” He is also aware that the deficit is a problem. All G. W. Bush has done for the deficit is give tax cuts to the wealthy and starts wars. In fact, that is precisely what turned a budget surplus into a deficit.

The very wealthy and the energy companies are like children with G. W. Bush as an indulgent parent. The parent is so indulgent that the children get everything they want. They can stay up very late, skip school, eat candy for each meal, never bathe, play with firearms, curse with every breath, smoke, and use drugs provided by the parent.

For a time, the children think that they have it made. But at some point, the children begin to realize that the parent really does not have any concern for their best interest. Some realize that the parent’s indulgence has ensured their destruction. Thus, have some of the recipients of Bush’s largess come to realize that their leader is long-term poison.

Meet the New Boss; Same as the Old Boss

An employee asked for variable medical premiums, based on pay.

Paul Anderson said “If any component of our business becomes non-competitive, it actually hurts the employees in the long term.” He used the steel industry as an example of how bad benefits are for employees. He said “It would feel good in the short term for me to stand up here and say, ‘We're going to have free medical coverage from here on out.’ And I'd be the most popular CEO in the country.” Then he claimed that the company would go out of business in two or three years. He is enamored by “industry norms.”

CEO’s love industry norms, as long as they provide an excuse for taking away employee benefits. And yes, fully paid medical coverage was a benefit that Duke employees had for decades. Duke took it away right before buying PanEnergy and picking up Paul Anderson for the first time. He has dodged the problem of diminishing benefits for as long as possible. Mr. Anderson has been peppered with enough questions that finally he has been flushed out on the benefits issue. He has show his true colors. It seems that benefits retention for employees is bad, but over $11million in stock grants for the CEO is good.

More Money for Duke Executives

Why do the benefits of employees continue to be cut back, even as executive compensation continues to soar? Oh yeah - industry norms. It’s an industry norm for employees to lose everything while executives increase their take by millions.

The matter of lost health benefits for active employees is different from lost pensions and lost retiree health benefits. The difference with retiree benefits reduction is that these benefits have already been earned. Duke Energy took, and is taking, from retirees the benefits that have already been paid for with years of labor. The only thing a working person has to barging with is his labor. It is a sad situation when he is hoodwinked out just compensation for the only thing he has to trade.

The second part of the question was: “Also, would you favor rewarding shareholders or providing better benefits to employees?”

Mr. Anderson evidently thought that the answer to that one was much too obvious to mention. His sides are probably still sore from laughter. His compensation is solely tied to shareholders’ short-term interest. If employees make one-cent per year and have zero benefits, Mr. Anderson will profit handsomely.

An employee wanted more contracts for employees to enhance loyalty and certainty.

The response was that contracts are more costly.

You can see that when compensation, including benefits, is legally enforceable, it tends to give Duke less flexibility. It allows more flexibility to be able to renege on compensation agreements. It is really sweet for corporations when they can wipe out 30 years of promised compensation with one questionable move.

Mr. Anderson contends that contracts are bad for employees, but he has a contract. He says that contracts are bad for employees – not HIM! He knows that with a contract he will receive exactly the compensation that Duke promised him. Duke Energy will not be able to promise him specific compensation for years and then suddenly take it back. Contracts are good for Paul Anderson and contracts are good for employees. It’s just that contracts for employees are not good for Paul Anderson.

Taking back compensation that employees have earned "frees up" even more money to boost executive compensation. Corporations view it as free money. It’s free money to them so, why not give the executives a few more millions of dollars? Everybody’s happy – except the shortchanged employees.

Executives try to tune out any employee concerns. They have a good game going and do not want it messed up. They view employees as always carping about something. If they are not complaining about their lost pensions, they are upset because their retirement health coverage vanished. If employees would just surrender all benefits without objection, executive compensation could easily double – again.

One employee wants Paul Anderson to stay on beyond 2006.

Mr. Anderson said “I have told the board that whatever I do, I'm not going to leave the company prematurely or leave it in bad shape.”

You will notice that he never said what condition he would leave the employees in!

An employee asked “Is Yucca Mountain still a viable option, or is it too hot politically?”

Mr. Anderson said “Yucca Mountain is politically in a tremendous amount of trouble… I was told the likelihood of Yucca Mountain is very low. If that's the case, then the likelihood of another nuclear plant is very low.”

Every time someone does not get exactly what they want, they blame it on partisan politics. Politics has zero to do with the concerns about the proposed Yucca Mountain nuclear waste repository. The concerns have everything to do with the public not wanting the groundwater polluted with radioactive contamination.

The only reason Yucca Mountain ever made it this far is because of the flood of money pushing it along. The huge amount of money passed around papered over a lot of technical problems. Engineers that helped design the site have repeatedly exposed the many problems. Evidence has now emerged that fraudulent test data was submitted to rubberstamp Yucca Mountain. The problems are too great for money to continue to conceal.

Yucca Nuclear Dump is a Sham

Why hasn’t Paul Anderson express any concerns about Yucca Mountain? In short, he is not paid to. He is paid only to promote the interests of Duke Energy. Yucca Mountain would have only been in the short-term best interest of the company. But when money is involved, executives then to become incredibly short-sighted. Yes, G. W. Bush, Congress, and energy corporations were perfectly willing to push forward the hazardous proposal. Rallying around Yucca Mountain provided two things for the promoters – a temporary solution to a huge problem and money, money, money. When money is in the equation, everything else usually takes a backseat – even the well being of the public.

Some Duke Energy executives though that they could push through a new nuclear plant by “talking it up.” But the happy talk ran into reality. The only reason the existing nuclear plants were approved is because it was assumed the technology would eventually be developed to eliminate the waste problem. The assumption did not prove to be correct. The nuclear spent fuel pools are overrunning with waste. Radioactive waste is now being stored outside of the plants.

The nuclear waste situation is bad now. To put all of this radioactive waste in an even worse location would be insanity. Here is another bone to chew on. Even if Yucca Mountain were a safe place to dispose of the hazardous waste, it would still not hold all of the radioactive material! The problem is not going away anytime soon, if ever.

In spite of the fact that this very fundamental problem has not been solved, Duke Energy executives are screaming for new nuclear plants! Why? Because G. W. Bush is enabling them. His policy is to give the energy corporations anything they want. Like the overindulgent parent, he will give them everything they want – even if it kills them – and the public too.

It was suggested that incentives be based on profitability rather than meaningless gobbledygook.

Mr. Anderson talked in circles on this one, which probably means to expect more gobbledygook. Many people have built empires on tracking and trending the gobbledygook; they will not willingly give it up. Plus, some executives cannot resist the opportunity to “socially engineer” the employees.

Their efforts fall flat when employees do what must be done and completely ignore the incentive carrot. Employees willing to sell out everything for a short-term gain should fill out interest forms for executive positions.

Can't Sleep for Worrying About Safety

Mr. Anderson says that the issue of safety keeps him awake at night. It’s good that he is concerned about safety, but it is doubtful that he will ever fully understand all of the ramifications. He has business knowledge, but his knowledge of actual working conditions is about zero. The same is true of most of his underlings. Those who proclaim that they will bring about zero accidents on the job, zero deaths on the job, and zero sickness on the job have never even seen the conditions that employees must work under.

Fred Fowler Lectures Others

The few executives that visit nuclear plants get the VIP tour along the “yellow brick road.” How many have ever seen the inside of a reactor building? The yellow brick road ends abruptly there. Even getting there is no picnic. Two of Duke Energy’s three nuclear plants are designed to be compact. Less plant equals less construction cost. It all sounds very good that compact nuclear plants can produce the electricity of larger plants. But a cheaper initial cost often means hidden future costs.

Part of the hidden costs comes in more difficult maintenance. Just walking through some plants is a safety hazard. The compact plants were being constructed when the Three Mile Island partial meltdown occurred. Extra pipe bracing was added to areas that were already tight to walk through.

These plants were designed before CAD programs existed. Design employees have said that huge drawing were attached to walls and components were drawn in by hand by each group. Sometimes there would not be enough room to get everything on the drawing. The employee said that this problem was solved by erasing the components drawn in by another group. Short-term solutions have been around Duke for some time.

Each step can be treacherous in these compact plants. Beams and pipes are at head level. If one does not duck, he will collide with solid steel. Over the years, these conditions have taken a toll on employees’ cervical vertebras. It seems ludicrous to preach safety in plants that were not even designed to walk through safely.

Do not become too fixed upon the head hazards or you may overlook the floor hazards. Large concrete floor plugs provide an uneven surface and an excellent place to trip. Then there is the angle iron bolted to the floor.

One plant has a “love pipe.” It is a huge vertical pipe, located right in a high traffic area. The pipe is appropriately named. People must turn sideways and hug the pipe to squeeze by it. The pipe has international fame. A Duke employee was visiting a foreign country. He ran into someone who said that he was a nuclear vendor. When the employee told where he worked, the stranger said that he had been there and remembered the love pipe.

During refueling outages over a thousand vendors may be brought into the already compact plants, plus employees from other Duke Energy plants. Already cramped conditions become even more crowded. With people working above, below, and beside each other, the chance for accidents multiples. Add to that the fact that employees are exhausted from working 12 hours a day, six days a week.

These unsafe condition are not something that can be corrected by remodeling. Concrete walls three feet thick, fortified with number 11 reinforcement steel do not lend themselves to remolding. The only way to eliminate these unsafe conditions is to abandon the plants. That option will not be financially appealing to Duke Energy. In the mean time, employees will literally continue to butt their heads against walls – and pipes – and beams.

There is one thing more unyielding than a three feet thick, reinforced concrete wall. That is the belief by Duke Energy executives that they have never made a mistake and have the solution to all problems.

When accidents inevitably occur, management responds with tips on how the accident should have been avoided. These tips are really hilarious because of their absurdity. They only serve to add insult to the injury of the unlucky employee. These tips always point out how the injury was somehow the employee’s fault. They never address unsafe working conditions, due to poorly designed plants. These pencil jockeys claim to know how to prevent each injury, but always after the fact. Just think if we had these Monday-morning-quarterbacks in Iraq. The injury rate and death toll would undoubtedly be zero!

The compact plant design necessitates the use of an ice condenser for accident mitigation. The ice condenser presents another hazardous place for employees to work.

The hazardous working conditions are only part of the hidden costs of building compact nuclear plants. Another cost will be felt in the event of a nuclear accident.

The Nuclear Regulatory Commission has stated: “Ice condenser plants are relatively more vulnerable to the risk of hydrogen combustion events in the containment because (1) the containment volume is smaller, leading to higher hydrogen concentrations, and (2) the smaller, thinner containment and lower ultimate capacity cannot withstand the same degree of internal pressure as large dry containments.”

Charlotte, N.C., Nuclear Plants Cause Concern

What could possibly make matters even worse in these compact nuclear plants? For one thing, burning plutonium fuel could be a problem in the event of a nuclear accident. Although plutonium burns “hotter” than uranium, it will not make an accident more likely to happen. But should a severe accident occur, there is the additional plutonium in the core to be belched into the atmosphere and possibly contaminate the ground water.

And what plants will Duke Energy use to burn the MOX plutonium fuel in? Why the two compactly designed plants of course!

Selling Off Employees

An employee wrote in to complain about workers jobs being shifted to contractors, with no provisions for severance payments.

The answer was “Based on the provisions in many of our current severance plans, employees who are offered a job by the contracting company are not eligible for a severance payment.”

Employees have written to the Employee Advocate about this method being used to force workers out of the company. Some former Duke employees accepted jobs with the contractors, only to be laid off later. Anytime employees are shuffled from one company to another provides an opportunity for even more benefits tinkering.

File this one under unusual complaints. An employees went from being exempt to non-exempt, but that’s not the problem. The complaint is that he now gets paid biweekly instead of monthly. You heard right. He is complaining about being paid too often. He said the change “wreaked havoc with my finances.” He wants to go back to being paid monthly to save the company money. Oh yes, he wants to receive his overtime pay mid-month.

The answer was that pay periods are governed by law. Not only that, but even if it were legal, the software customization needed would prove costly.

The Employee Advocate’s advice is to take you money as soon as you can get it. If you can get paid weekly, take it. Getting paid daily would be even better. The pension plan and health care benefits ordeal should have taught employees something. The longer due compensation is in the hands of Duke management, the greater the chance that you will never see it. If you are offered payment by the hour, take it! Get it in cash if you can.

One employee wants Duke to offer an annuity option for the 401(k) plan. He said “Many employees are not investment-wise and don't trust the financial services industry to serve our best interests.”

Duke does not plan to offer such a feature and does not think that many employees would be interested.

The Employee Advocate suggests that this employee reexamine his thinking. It is wise not to put too much trust in the financial services industry. But abdicating your options to Duke may be jumping from the frying pan into the fire.

How much money is in your cash balance plan? How much medical coverage will you get at age 65?

The less you have Duke Energy helping you, the better off you will be! Anyone can buy an annuity. But it is like buying anything else, not everyone will get a good deal. Corporations have zero incentive to get the best deal for employees/retirees. They do not care if excessive fees are paid – it’s you money - not theirs! Some corporations may have sweetheart deals that pockets them “soft dollars” for the business pushed to certain companies. The only interest a corporation has is in getting the best deal for the executives. Learn what you can and find someone you trust, but get it out of Duke’s control.

Duke said it spent $14.7 million in fees to its external auditor to prepare for complying with the Sarbanes-Oxley (SOX) law. It spent twice that in other related fees. Corporations can thank themselves for the SOX law. It was pass due to the many illegal shenanigans pulled by executives. The only problem is that it was not effective in stopping all the corporate corruption. Even so, corporations are begging for it to be repealed. It does not need to be repealed; the screws need to be tightened even more!

What is really needed is a “SOX on Steroids” law to cover employee benefits.

Open Forum - March 2005

Employee Advocate - www.DukeEmployees.com – March 14, 2005

Duke Energy President and COO Fred Fowler hosted the Open Forum on March 9 in Charlotte, North Carolina. He did not waste any time mentioning that Duke was listed as number 3 on the 2005 Fortune Most Admired list.

A reasonable question is: “Admired by who?” The companies on the list are not those most admired by employees or customers. They are companies most admired by assorted executive types. These are the people who often see pension raiding, book cooking, and price gouging as good things.

Duke is back to running “feel good” ads. By an amazing coincidence, these ads are running in Fortune magazine.

On Jun 28, 2001, the Monterey County Weekly had this to say about Duke and the Most Admired List:

Freudian Peek On Friday, June 22, three former workers at a plant in San Diego testified to state senators that Duke Energy had manipulated electricity supplies--a fact reported by the Herald on page one on Saturday.

“On Monday, a full-page sheet of propaganda paid for by Duke appeared-- aimed to ‘correct’ these charges. Because of an apparent typo, the ad contains the following sentence: ‘Our record of superior plant operations in California and around the world peaks for itself.’ (Squid's italics.) Ha!

“The ad also brags that Fortune has ranked Duke ‘America's’ Most Admired Electric and Gas Company’ for the past three years. Um, maybe that's not the best source for an endorsement, since the profits that make Fortune readers drool have been ripped from millions of angry Californians.”

Mr. Fowler admonished employees to "take to heart" the driver distraction guidelines. These guidelines were introduced by CEO Paul Anderson in the last Open Forum. One sure way for an executive not to put his foot in his mouth is to tout his superior’s programs.

There is nothing wrong with Mr. Anderson’s emphasis on driving safety. He is 100% correct in stating that allowing more travel time will result in safer driving. And driving is one of the most dangerous activities that most people do on a daily basis.

In February, Mr. Anderson said this about risky driving: "It's driven by the fact that you've rushed yourself and haven't allowed enough time."

He may not be aware that for many years Duke pounded employees with the opposite message. Employees were more than encouraged to arrive on time, no matter what the cost. Some departments issued “occurrences” for being late for or absent from work. An absence netted one occurrence. One-half of an occurrence was issued for being tardy for work. If an employee accumulated a certain number of occurrences in 12 months, he was terminated.

The number of occurrences allowed was not great. Some employees stopped all medical care, except the most urgent, out of fear of racking up too many occurrences. A dental visit would cost at least one-half of an occurrence and would cost a whole occurrence if it took all day.

An employee would say “Whatever happened to Joe?”

Someone would say “Packman got him.”

That would mean that Joe had been terminated for accumulating too many occurrences. Early in the year, one worker had acquired the maximum occurrences allowed. If he came in late, even one time, the one-half occurrence would result in his termination.

Do you think this encouraged the employee to drive safely to work? Do you think this encouraged the employee to seek proper medical care? If he went to the doctor, he would get an occurrence and be terminated. If he came in late, he would get one-half occurrence and be terminated. If the traffic light was about to turn red and he was short on time to get to work, he had to floorboard it and blast through the intersection. If he saw a car run off the road, could he stop and render aid? No, he would have been terminated for being late for work.

By some miracle, this employee made it through the 12 month period without being terminated due to occurrences. Once such behaviors become engrained, after years of threats, they tend to become permanent.

The message was clearly: “Get to work each day and on time or die trying.” And some did. Employees have been killed in wrecks while driving to work. Of course it would be impossible to prove that they were driving recklessly out of fear of getting occurrences.

The occurrence program was abandoned, but other programs have taken its place. The zero tolerance for lateness to training classes is one such program. At some plants, if an employee is late for a training class by a few minutes, he is locked out of the class. To make it more interesting, classes are often scheduled early in the morning.

He we go again. If an employee is running short of time to get to a class, is his mindset to drive safely? No, extra risks will be taken, so that he does not get the door slammed in his face. If an employee is killed trying to get to class on time, the company will shed a few crocodile tears and send flowers.

Another Duke policy that does not encourage safe driving is 12-hour work shifts. Many employees are forced to work 12-hour shifts. These long hours become even more unsafe when working nights. It gets even worse for the unfortunate employees who must constantly shift between working days and nights.

What if it takes an employee one-hour to commute to work? Driving to and from work will eat up two hours. If he is fortunate enough to get 8-hours of sleep, that leaves him only 2 hours a day to do everything else he must do. When these hours are worked for long periods, something has to give somewhere. People end up driving and working without adequate rest. Sometimes the only options to squeeze more hours out of the day are to sleep less and drive faster. Duke management need not be too shocked when employees have accidents going to and from work. Management need not pretend to be shocked when tired employees have accidents at work.

It is very easy to say that allowing more travel time results in safer driving. It is also true that a well rested driver is a safer driver. But when the company sucks up excessive amounts of the employees’ time, there is no extra time available to add.

The same conditions apply to Mr. Fowler’s proclamation that there will be no more death, injuries, or sickness at Duke Energy. If dead tired employees survive the trip to work, they may or may not make it through the day or night. Grandiose pontifications will not alter the facts.

Resurrecting Past Failures

In spite of all the company rhetoric about safety, Duke is unwilling to admit the negative impact that long work hours have on safety. The cotton mills were light years ahead of Duke. They knew that to work around the clock, three shifts were needed. The mills could run 24/7, and no one ever had to work over 8 hours a day. But operating three shifts would require one-third more employees. That would require spending more money. Money is always the sticking point. Just run the zombies you have until failure.

Mr. Fowler addressed mergers by saying that utilities could be reduced from 100 to 10. Then 90 CEO’s would be unemployed. He said that regulated utilities are usually required to let ratepayer share in any savings for a period of time.

Now you can understand the big push for deregulation. There is no desire to share savings with ratepayers. The wheeling dealing, unregulated utilities want all the profits. The promise of lower electric rates was only sucker bait.

The Electric Deregulation Flop

Open Forum – February 2005

Employee Advocate - www.DukeEmployees.com – February 28, 2005

Duke Energy Chairman and CEO Paul Anderson hosted the Open Forum on February 8 in Houston. He told of the uncertainty he felt moving to Australia in 1998 to head BHP. He said that he knew no one in the company or the country.

It is enlightening that he should point this out, since he could have remained with Duke Energy. But there would have been a steep price to pay. To stay, he would have had to continue to work for Duke Chairman and CEO Rick Priory. He made a great move in jumping off the train before the wreck!

Someone mentioned that the employee survey indicated that management isn’t always excited about hearing bad news. It is no secret the Duke management loves happy talk. It was much worse under the previous regime. If management did not like the truth, it would take out newspaper ads in an attempt to spin it away.

Mr. Anderson said that he’ll take the bad news. “We need to think about how we send that signal. You’ve got me thinking.”

The last sentence shows that Mr. Anderson comes to the Open Forum to learn from the employees. The previous regime never once listened to any employee concerns. The old Noon Meeting was only a steam-rolling session for management. And a remnant of the old regime is still with us.

Question: I’ve been with the company 28 years. When I was hired, I was told that if I retire with 30 years service, my insurance would be paid for. But that policy has changed. Why weren’t employees who were hired prior to the date of the policy change grandfathered in under the old plan?

Rather that giving a silly song and dance, Mr. Anderson referred the question to HR. The question was asked by a Duke Power employee, so Duke Power HR provided the silly song and dance:

Answer: For many years Duke Power provided retiree medical benefits at no cost to the retiree. This was a practice and not policy. In the early 1990s, that practice was changed to meet two objectives: to encourage skilled, knowledgeable employees to remain in the workforce and to discourage other employees from leaving in large numbers for early retirement. Also, significant changes in accounting requirements helped drive the change.

Grandfathering in all or a group of employees would have been cost prohibitive for the company and could have resulted in the company losing its skilled, knowledgeable employees to early retirement.

Years ago, when hiring managers or HR representatives told prospective employees that the company provided medical coverage at no cost to retirees, they were describing the current practice at that time. It was not a promise that conditions would never change.

Employee Advocate: That was a pretty cheap answer, no? Using semantics to explain away a violation of the implied contract with employees was a throwback to the tactics of the old regime. What if zero employees showed up for work tomorrow. The results would be catastrophic. Duke management would start to have seizures. Management would began to frantically call employees:

Management: Fred, you have not missed a day in 20 years. Can I count on you to come to work today?

Fred: No, I am not coming to work today. You see, working every day was a practice and not policy. I never promised that conditions would never change. I just made an unilateral decision to change the practice! Bye.

What a nice way to encourage employees not to retire. Cutting retirement benefits with the cash balance pension conversion further helped encourage employees to work until they drop dead.

Hiring managers and HR representatives most certainly did tell new employees that fully paid medical benefits would be earned after 30 years of service. It was also spelled out in company booklets. Management only came up with the “practice and policy” lunacy after the fact. Classify it under “G” for grasping at straws. It rates right up their with the “young mobile employee” as an excuse for the cash balance plan.

Duke put a price on the medical care: 30 years of service. Duke collected the price, but did not deliver the stated goods. There is a term to describe such unethical conduct.

The problem with Duke management is that you never know which face will be talking. One face says that senior employees are too valuable to let retire. The other face says that senior employees are of no value and packages should be offered to get them to retire.

One face says that senior employees can be forced to continue working if their pensions are cut. The other face says that they will be in a layoff and not have the opportunity to continue working.

Benefits have been under a full scale assault by Duke senior management for years. It is bad enough that significant earned benefits have not been delivered. But then, we have to listen to these laughable excuses. It must be the same people who come up the silly slogans, such as, “Smart People with Energy.” It does not take smart people to dream up such inane slogans and excuses. It takes “Dumb People Full of Gas.”

Suing for Breach of Implied Contract

Open Forum - January 2005

Employee Advocate - www.DukeEmployees.com - January 25, 2005

On January 17, Duke Energy Chairman and CEO Paul Anderson hosted the Open Forum in Charlotte, North Carolina.

Duke Energy North America (DENA) was once touted as being a potential huge money maker. In 2000, the profit growth rate was projected to be 50%. That was before the energy trading, derivatives dealing, and mark-to-market revenue boosting house of cards crumbled.

DENA turned out to be a major rat hole, sucking up hundreds of millions of dollars. Mr. Anderson had some good news about DENA. This year it should lose about $150 million less. Also, the mark-to-market risk has been reduced. In the May 2004 Open Forum, Mr. Anderson said it was the DENA mark-to-market position that kept him awake at night.

Safety will again be emphasized this year. The top 700 management types will forfeit 5% of their incentive pay if there is any work related fatality in 2005. Mr. Anderson is to be commended for his continued drive to improve on the job safety. But still, something seems a little unsettling about this program.

The plan implies that those in Duke management will only try to reduce fatalities if they are threatened with penalties. And what happens if there is a fatality early in the year? Does that mean that there will be no interest in preventing further fatalities? The 5% incentive pay penalty will be extracted if one death occurs or 1,000 deaths occur.

The big “Zero Accidents by 1998” drive went on for years prior to 1998. When 1998 arrived, a fatality occurred early in the year. That program was dropped like a rock and never mentioned again.

Resurrecting Past Failures

Mr. Anderson’s has good intentions, but will Duke never be able to rise above tacky programs? Executives often have a hard time grasping the concept that everything does not have a price tag on it. But if money is ones sole motivation, he will assume that it is everyone’s only motivation.

The new policy says that members of management are so callous that they have been allowing fatalities to occur because there was no penalty for it. Evidently since there is now a penalty for fatalities, there will be no more.

What happens if an employee is struck by lightening and killed? Will members of management be penalized five percent because they allowed it to happen?

The drive for a safer work environment started with an impressive speech by Mr. Anderson. Then it deteriorated with COO Fred Fowler’s preposterous prediction of preventing all workplace injuries, deaths, and sicknesses. Now Mr. Anderson has brought out the stick to use on management.

Who else can be beaten? It is no use to beat dead employees; they won’t feel a thing. The safety initiative has been cheapened.

Mr. Anderson said "For once you have a boss who does not have any pre-conceived notions about how your work should be done."

That is a very good thing. Duke once had a CEO who had pre-conceived ideas about everything. The problem was that all of his ideas were disastrous!

It was mentioned that a total collapse in crude and liquid markets would hurt Duke. That is another example of an external force that can damage Duke. Last month, Fred Fowler commented about the company being in control of its future -- and not dependent on external forces.

Mr. Anderson went on to say “I’d say the next biggest risk would be a surprise at DENA.”

He fully recognizes that Duke is very much affected by external forces.

Duke Power is back to running ads. These are not the “I’m Not a Crook” ads. Still, it seem strange for a monopoly to have to advertise at all. The customers pays for the ads to hear Duke tell them how great their service reliability is. How receptive will the customer be to such ads after being without power for days or weeks? The money could be spent toward actually improving reliability rather than just boasting of it.

The answer to an e-mail question was: “We do not anticipate any enterprise wide reductions in the immediate future.”

The statement was followed by enough qualifiers, exceptions, and loopholes to choke a mule. It ended with the boilerplate statement to ask your manager or HR representative. Who says Duke does not have a sense of humor?

Before the last layoff, an employee did just that. He was considering retiring and ask his HR representative if Duke was planning on offering any early retirement incentive packages. HR repeatedly said that there were no such incentives planed for the future. The employee retired and then Duke offered the early retirement incentive package.

A short time later, the employee was back at Duke, working as a vendor. He told of how he asked HR about any futures incentives and was told that there were none. He believed what HR told him and it cost him a nice chunk of money.

Open Forum - December 2004

Employee Advocate - www.DukeEmployees.com - January 11, 2005

Duke Energy COO Fred Fowler hosted the Open Forum on December 8, 2004, in Houston.

Fred Fowler said that the company is now in control of its future -- and not dependent on external forces.

Mr. Fowler always gets a little too carried away with his bluster. It is common knowledge that almost everything has improved since the return of Paul Anderson. But it is going too far to say that Duke in not dependent on external forces. No entity is immune to the influence of external forces.

What if an energy generating device is brought to market that can power a home or small business and costs only $1,000? What if technological developments allow this device to be operated for $200 per year? Could such an external force have an effect on Duke’s power sales? Could this development put a kink in the gas business also?

What if the terrorists find a way to drive a bunker-blaster through a nuclear reactor dome? Could that external force possibly be felt by Duke?

What if the devastating tsunamis had hit the Atlantic Coast? Would Fred Fowler and cronies be insulated from that external force?

Mr. Fowler could have said that Duke is more in control of its future -- and not as dependent on external forces as it once was. He could have said that he wants to help employees reduce accidents. But he proclaimed that all on the job accidents, deaths, and sicknesses would be eliminated! His bluster knows no bounds.

Fred Fowler Lectures Others

The accomplishments of 2004 have been a little bit one-sided:

  • Debt was paid down by billions of dollars in 2004.

  • Employees have not been made whole regarding pension losses.

  • Duke has $2.9 billion cash on hand.

  • Earned retirement health benefits are still eliminated at 65.

  • Assets sales are exceeding expectations.

  • Retirees that still have health coverage are paying more and more for it.

  • Many legal issues have been resolved.

  • Zero benefit issues have been resolved.

Mr. Fowler said “We also need to craft a regulatory policy strategy and be a stronger voice in that process.”

The fox always wants to write the rules for hen house raiding.

Mr. Fowler started to get warm when he said “I’ve had meetings with small groups of employees. I know that some employees are frustrated, feel a lack of empowerment, feel like they are not listened to and are being asked to do more work with less resources.”

More to the point: Employees are asked to retire with less pensions than they have earned and are entitled to receive. Employees are asked to retire with zero health coverage after they had earned lifetime coverage.

It was pointed out that Duke documented 1,400 processes to comply with Sarbanes-Oxley. But a large bank had 80 percent less processes.

It is good that senior management is learning what employees have known all along. And, the 1,400 processes are just the “official” processes. Many employees have created their own alternatives because the Duke processes are too complex, cumbersome, and poorly implemented to be useful. The priority always seems to be to just get the process on-line (work the bugs out later). It is as if someone believes that a huge number of processes will compensate for their lack of quality.

It is certainly not efficient to have a multitude of redundant systems. But employees have been forced to make do the best way possible. Inscribing information to a stone tablet with a chisel is not efficient. But when the information is needed, it will always be there.

Open Forum - November 2004

Employee Advocate - www.DukeEmployees.com - November 23, 2004

The November Open Forum was held in Charlotte, North Carolina. It was hosted by Duke Energy Chairman and CEO Paul Anderson.

Mr. Anderson said that media speculation about Duke Energy's plans has alarmed and confused employees needlessly. The Employee Advocate emphatically disagrees. It is not the media that has caused alarm, confusion and real damage to employees. Duke Energy senior management is the real cause of the problems. Paul Anderson does not deserve blame for the initial treacherous scheming to take earned pension benefits from employees. But he will be held accountable for pretending not to see the mastodon in the room.

The new chairman and CEO has inherited all the problems caused by the greed of his predecessor. He has made great strides in overcoming the many problems except for the matter of the employees’ lost benefits. He has enjoyed a one-year honeymoon with employees. The easy thing for him to do is ignore the injustice that employees have suffered. That will work if no one pushes the issue. But there is a strong likelihood that the issue will be pushed, or shoved, or power driven. Paul Anderson has done something for everyone except the employees.

If it were not for the media reports, Duke employees would be the very last to know what fate is to befall them. In 1988, Duke was keeping the planned massive layoff hidden from the employees. Only after The Charlotte Observer broke the story did Duke make a hasty layoff announcement. Some believe the layoff would have been more drastic if the story had not forced Duke to acknowledge its plans. Duke will come clean only if the media forces its hand. Otherwise employees can always count on being left in the dark.

Mr. Anderson did not like the headline in The Charlotte Business Journal that suggested layoffs would be used to cut costs. Executives are notorious for using cryptic words, innuendoes, evasions, and leaky languages to keep everyone guessing. It is up to employees and the media to fill in the blanks the best way possible. Even if the speculations are not 100% accurate, sometimes they serve to flush out the hidden corporate agenda. Such was the case with The Journal article. Paul Anderson said that the focus on layoffs was wrong. Bingo! We have an answer.

Of course the strong implication that there will be no Duke layoffs carries a legal weight of zero. Duke could layoff half of its workforce today and just say “The plan changed.” It is not a matter of questioning Mr. Anderson’s veracity. It is simply a matter of recognizing that, when dealing with Duke, one cannot count on anything that is not legally enforceable. Duke Energy will exploit every loophole to the employees' disadvantage.

Everyone knows where executives always look first to cut cost. Seldom are exorbitant executive bonuses and stock options curtailed. Rarely are “figurehead” executives, who have no viable function, shown the door. No “white cow” giveaway programs are ever dropped. Any cutbacks will be in employee benefits, employee salaries, or the elimination of the employees. Duke Energy has even gone so far as to take away deferred compensation that employees have already earned! So, The Charlotte Business Journal article did not make any totally inconceivable assumptions.

If the words of Duke executives made it so, all employees would still have their full pension benefits. There would be no pension losses because of a cash balance plan conversion. There would be no years spent in a “wear away” period, with no pension accruals. All employees would still have their full retirement health care benefits. Benefits would not stop at age 65. Retirees with thirty years of service would not be paying health care premiums that keep going up. They would pay zero premiums because they have already paid for it once with many years of labor.

Just because your benefits are in writing does not mean they you will actually receive them. All of our benefits were in writing, backed by the good word of Duke executives. Duke now claims the written promises are not enforceable. And it turns out that the good word of Duke Energy executives is worthless.

The Journal does an outstanding job of uncovering news that others miss. It brought the Duke Power buyout rumor out of the closet:

Is Duke Power on the Block?

The Journal let us know that a certain customer will get special price breaks:

Duke Cuts Rates?

When things are murky, who should employees believe – the media or Duke executives? Remember, the media has never used shady loopholes and slight of hand to take benefits from Duke workers.

Mr. Anderson was not too happy with a Dow Jones article about Duke Energy possibly selling DENA. He said "This article was focused all wrong. It was an upsetting article to a number of employees at DENA and to me."

Dow Jones used to run nothing but fluff articles about Duke. But that was when Duke was buying full page ads in The Wall Street Journal, advising the public to believe Duke and not their lying eyes! Incidentally, the media was proven to have been on the right track. Most of the executives claiming “complete exoneration” are no longer around. A few are Lying low and hoping that no one remembers.

Duke’s former CEO used to blame all of his problems on the media. But all the media did was report the facts. There was very little good news to report about Duke in those days. So the executives decided to buy full page ads to promote their own spin. How did that work out? It was disastrous. The ads were so silly that they only made matters worse.

Duke Wall Street Journal Ads

When Paul Anderson arrived, the program of silly ads and goofy slogans was terminated:

A Silly Slogan Dies

The Charlotte Observer ran an article about how the company has been turned around by Paul Anderson. For some reason, Mr. Anderson really liked that article! He had absolutely no complaints about it. The article was factual, but contained no information that Duke employees did not already know. The Observer has been playing Duke for years. It will pamper Duke with fluffy articles. Then, when least expected, it will nail Duke hard. Duke never sees it coming.

Duke Energy’s Ethics Examined – Again

Fluff for Christmas

It was said that a “meaningful energy policy” is needed. You can forget about a meaningful energy policy as long as the Bush administration is in office. The Bush/Cheney energy policy is nothing more that a giveaway program for corporations. And V. P. Cheney is still hiding the information from the secret energy meetings with industry CEO’s back in 2001.

Energy Task Force Meetings Still Secret

Mr. Anderson is in favor of a broad-based energy tax. Since he does not hold political office, he can use the word “tax” without being tarred and feathered. A tax is not always a bad idea. But the current administration is only interested in tax cuts for the wealthiest individuals and corporations. A responsible tax is better than an irresponsible tax cut. Foolhardy tax cuts coupled with an expensive, uncalled for war, quickly turned a budget surplus into a massive deficit.

Mr. Anderson noted that the current deficits could lead to higher inflation and rising interest rates. If Paul Anderson and G. W. Bush were to swap positions, the United States would be ten thousand times better off. Of course, Duke Energy would promptly go bankrupt!

Duke intends to jump on the bilingual language bandwagon. This whole craze is baffling. Would you move to a foreign country and expect to never have to learn the language? Would you expect everyone else to have to learn your language because of your lack of initiative? But what has political correctness ever had to do with logic?

Unlike his predecessor, Mr. Anderson does not want to see Duke stock go too high, too fast. He is savvy enough to know that unbridled growth is seldom sustainable. He said that one would have to take increased risks to fuel such growth.

Mr. Anderson is far too kind to his predecessor. He talked as if Duke once being perceived as a growth stock were some sort of accident that pulled the former CEO under. That was not the case at all! Converting from a blue chip to a growth stock was a deliberate ploy by the former CEO. He was too naive to see that soaring growth would sow the seeds of a washout. His day trader mentality almost destroyed the company. Do not feel sorry for him. He carted off millions of dollars in the process of making everything worse for everyone else.

Mr. Anderson said that he feels good about:

  • Maintaining the dividend and making the financial plan work,

  • Not bringing in any senior level management,

  • And regaining some credibility with various constituents.

He should feel good about correcting the many mistakes of the former CEO. Hacking away at the dividend was another part of the foolish conversion from a blue chip stock to a growth stock. The former CEO was even foolish enough to promise certain growth rates! This was after breaking benefit promises make to employees. When Mr. Anderson resolves the benefits issue to the employees' satisfaction, he will really have something to feel good about.

A question was asked about partner benefits to the gay employees of Duke Power and Duke Energy. A decision should be announce around the first of the year.

Two questions were asked about voluntary severance packages. Duke pointed out that severance packages are a benefit that have been used to manage workforce numbers. You should know by now that any benefit from Duke has a hook in it. To get this “benefit,” an employee must sign a waiver and release form, agreeing not to sue Duke for any reason, including a violation of civil rights! Duke has taken many things from employees. But some workers will never let Duke take away their right to sue. There are just too many questions that cry out for a legal answer.

The Layoff Package

Duke got in a disclaimer about layoffs. No additional enterprise-wide reductions are anticipated this year, but some employees may still be laid off. Have you ever heard of a more worthless statement? It only covers enterprise-wide layoffs and it only covers this year. This year is almost over. Even if it were enforceable, which it is not, it would still be useless. Refer to the comments about executive promises at the beginning of this forum.

Duke's helpful advice was to call your human resources representative if you have any questions. That is the corporate equivalent to "Drop dead." If senior executives cannot answer your question, what can their underlings tell you? Ask any HR representative a question and chances are they will have to call to find out. HR is a corporate stalling mechanism. If no policy fits your situation, one can be created on the fly. And you can be sure that it will not be in your best interest. Save your time. Just call the Psychic Hotline first!

A question was asked about the Employee Opinion Survey and low morale. It will be business as usual. It is not likely that you will ever see the raw data. You will only see a summary that can very easily be distorted.

Someone even wanted a Health Savings Account. Such accounts are designed for companies with extremely cheap health benefits. These accounts encourage people to skimp on health care to save a few dollars. Complaining about not having a Health Savings Account is like complaining because you are not drawing any benefits from Social Services. Be glad that you are not eligible for them!

Duke made a $250 million dollar contribution to the Retirement Cash Balance Plan (RCBP) to fully cover its obligations to date. Remember, these are the watered down pension obligations since the plan was converted. Duke did not take physical dollars out of the plan with the cash balance conversion. It reduced its pension liabilities. But for all practical purposed, it’s the same thing. The employees will not get the benefits that they have earned. The missing dollars will go to the corporation. The executives will not make less money because of the tinkering. Employees will have smaller pension checks. Employees will be able to go broke after retirement.

Someone wanted a straight answer about Florida Power & Light buying Duke Power. Duke Energy is not going to give one. Suggestion: Keep tabs on The Charlotte Business Journal.

Open Forum - October 2004

Employee Advocate - www.DukeEmployees.com - October 19, 2004

Duke Energy President and Chief Operating Officer Fred Fowler hosted the October Open Forum. It was held October 11, 2004 in Charlotte, North Carolina.

Addressing merger and acquisition rumors, Mr. Fowler said "Talking about rumors internally is OK. But it should stay internal. Talking about rumors externally can sometimes hurt the company's progress. Let's keep that kind of talk to ourselves."

Perhaps Mr. Fowler should be talking to the executives. It was an anonymous Duke Energy official who provided the rumor for the Charlotte Business Journal merger article. This official told the Journal that selling Duke Power would provide resources to buy more speculative businesses. When you read about a rumor in the newspaper, it is no longer an internal rumor – it’s public.

Is Duke Power on the Block?

Mr. Fowler said that complying with Sarbanes-Oxley is complicated and time consuming. He said that Duke is going to spend more time to make sure the reports are correct. Good! That is exactly what the law is supposed to promote – truthful reports. Corporations were cooking the books so much that something had to be done.

The best part about the tougher requirements is that it was the corporations' own boy who promoted them. The only reason G. W. Bush supported tougher rules on corporations was to distance himself from “Kenny Boy” Lay. Enron even furnished jet planes for Bush’s 2000 campaign.

When Enron was caught in scandal after scandal, Bush had to sacrifice Kenny Boy for appearances sake. But even with tighter regulations on corporations, it is hard for the government to police everything. Right now the Securities and Exchange Commission (SEC) is investigating six large corporations for pension and health benefits accounting improprieties. The SEC said the investigations are not random.

SEC Investigates Pension Accounting

Mr. Fowler said that California and Enron brought deregulation to a screeching halt. He failed to mention Duke’s part in the California energy crisis. Duke was an Enron copycat. Former CEO Rick Priory wanted Duke to be more like Enron. Now Duke executives do not like to use “Enron” and “Duke” in the same sentence!

Duke’s Attempted Market Manipulation

Duke executives thought that by acquiring PanEnergy, more “flexibility” would be achieved. But the new affiliate rules removed the advantage of owning both regulated and unregulated energy affiliates. These rules are also in place because of corporate greed.

A question was sent in about the Retirement Cash Balance Plan. (It’s time to break out the dancing shoes.)

The answer mentioned steady build up of benefits. The answer did not mention that the “steady build up” is at cheap rates. It did not mention that some employees will be locked forever in a “wear away period.” Their pension benefits are literally being worn away. The answer did not mentioned that employees did not receive the full value of their accrued benefits in the opening cash balance. There was no mention of the lost early retirement subsidy. It was not mentioned that the IBM cash balance plan has been ruled age discriminatory. What Duke does not tell you is often more important than what is said.

Someone wanted to know why vesting occurred in the Retirement Savings Plan (RSP) prior to vesting in the Retirement Cash Balance Plan (RCBP).

The answer was that it takes five years of service to be eligible to receive a RCBP benefit "at retirement."

The cash balance plan benefits could have just as easily started accruing benefits on the first day of employment. The plans are billed as catering to the “mobile” employee. A very large percentage of employees do not last for five years. Each one that leaves before vesting represents pension money that the company gets to keep. The pension carrot was dangled in front of these employees, but they will receive nothing.

The early retirement subsidy and specific dollar amounts were dangled in front of employees. The cash balance conversion ensured that employees will never get what was promised to them. Employees paid the price to receive the deferred compensation, but they will never collect it – without outside intervention.

Duke does not like to have problems with nuclear regulations, because outside groups offer help. Duke does not want this help. Duke’s abusive and possibly illegal cash balance conversion is an invitation for help in doing the right thing.

Duke has had every opportunity to do the right thing, but has only stonewalled. Duke has taken a hard nosed position on keeping the pension money taken from employees. IBM also took a hard nosed approach to keeping the pension money illegally taken from employees. But its hard nose is becoming downright pulpy!

Open Forum - Page 1