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www.DukeEmployees.com - Duke Energy Employee Advocate

Open Forum - Page 3

“It does not matter how well a plan is funded if you get shortchanged!” - Employee Advocate

Open Forum - March 2006

Employee Advocate – www.DukeEmployees.com – March 17, 2006

Chairman and CEO Paul Anderson hosted the Open Forum in Charlotte on March 10, just after the special shareholder meeting. He announced that this would be his last Open Forum, unless incoming CEO Jim Rogers needs him to fill in for him. After the merger Paul Anderson will be the chairman of the board, but not chairman of the company.

Employee: During the last Open Forum, there was some discussion about the change in control contracts that affect Cinergy's executive leadership. There was also discussion about Duke Energy's decision to convert to a cash balance account. It seems you are talking out of both sides of your mouth. On the one hand, we honor those commitments that had been in place. But on the other hand, we made a different decision as it relates to employees' pensions. Could you just clarify the spirit of what you were trying to say?

Paul Anderson: I think we're comparing apples to oranges here. Whatever your thoughts are on change in control payments, it's a contractual obligation entered into by the Cinergy board and its executives.

The pension plan changes that were made at both Duke Energy and Cinergy over the last several years were necessary to sustain benefit costs that keep the company in a position to operate profitably over the long term. We have all read recently about industries that did not have the foresight to address this issue and are suffering financially today and are taking drastic measures to fix the issue. Our intent is to not let this happen at Duke Energy or to our employees.

Advocate: The employee’s point was crystal clear. Duke Energy will bend over backward to see that executives always get everything that was promised to them, no matter how excessive.

But employees are fair game for any amount of trickery and deception. Absolutely no thought was given to honor and integrity when the pension was converted. The driving force was a relentless quest for profits, by hook or crook. Benefits are a part of each employee's compensation. The cost of these benefits are calculated from day one. The company could well afford them or they would have never been offered.

The cost of honoring the benefits promises (deferred compensation) is not what caused Duke Energy’s financial difficulties. It was trying to mimic Enron that almost drove Duke Energy into the ground! Chasing deregulation, derivatives, energy trading, merchant energy, and trying to dominate world markets are what caused the problems.

But all this came after the cash balance conversion! Duke Energy took hard earned deferred compensation from employees to help finance the rolling of the dice. And, Duke Energy lost.

Even if Duke Energy had won the gamble with employees’ pension money, it would have benefited only the executives. The pension fund had already been razed. Duke Energy had no intention of giving back a dime to the employees who had earned it through decades of work.

Duke Energy is no better than any other company that freezes a pension or declares bankruptcy to avoid paying pensions. Duke Energy only took the money sooner that some other companies. The actual method of raiding the pension fund is immaterial. The result is always the same: Employees do not get the full value of the pensions that they have earned.

To avoid the possibility of taking “drastic measures” later, Duke Energy took drastic measures in 1997. What bold “leadership.” “We know we want to clean out the pension fund. Let’s do it now and save the employees the inconvenience of having their pensions reduced later.”

The executive crowd will try to sell anything as a benefit, even raiding the pension fund. If this it the best rationalization it can come up with, then it has no defense. Corporations are not exempt from pension laws just because they want to pad the bottom line at the expense of employees.

A number of experts hold that cash balance plans are inherently age discriminatory. One plan has already be ruled to be illegal and age discriminatory by a federal court. The illegal aspects of cash balance plans can be avoided – if the company takes special efforts to do so, such as offering everyone a choice of plans. Duke Energy did not go to the trouble.

Pension Victory for Employees

It was a calculated risk. By not taking special actions to avoid discrimination, Duke Energy was able to take a lot more money out of the plan.

It was assumed that employees would never figure out what happened. It was assumed that even if employees caught on to the game, they would never have the tenacity to effectively challenge it. It was assumed that employees might complain for a few weeks, but would soon be distracted by sporting events, soap operas, six-packs, and reality shows. So much for the company’s assumptions.

Pension Lawsuit Filed Against Duke Energy!

“Safety culture” question sent in:

I attended safety culture training today and over half of the class had just been told that contractors would do their jobs in the future, as a part of the merger plan. Contractors do not share the care and concerns about safety that Duke Energy employees have. That class focused on "culture, culture, culture." We were told that it takes 5 to 7 years to change a company's culture.

How are we going to teach culture to a contractor in their three months at the company? There are a lot of employees who are not happy with their jobs right now. They have lost their job satisfaction and their empowerment. This has happened every two years since I have been here. Are we headed in the right direction?

The answer was that Duke Energy believes the company is headed in the right direction and will be sure to let you know if your job is outsourced.

Hey, what a company!

It was pointed out that Duke Energy's senior management has held safety meetings with major contractor firm’s executives.

Heck, that’s nothing. A safety briefing is required just to sit in a chair at a Duke Energy shareholder meeting!

2006 Special Meeting of Shareholders

This question brings a lot of insight into how the company really works. Right before employees are to be subjected to safety culture indoctrination, over half of them were told that their jobs would be outsourced! How many do you think were interested in hearing about safety culture after that?

According to Duke Energy, it takes 5 to 7 years to fully indoctrinate employees. Will an powwow of paper shufflers magically imbue working contractors with a safety culture in a few days?

Of course not; it’s all gobbledygook!

Hiring contractors has nothing to do with safety. It has everything to do with maximizing profits. Contractors will only be hired if they can do the work cheaply. A sure way to lower the bid is by cutting corners. There will always be a Chinese wall between Duke Energy and the contractor, which offers plausible denial. “We didn’t know they would all get killed; we had a safety meeting.”

Another Worker Killed at Duke Energy

Open Forum - February, 2006

Employee Advocate – www.DukeEmployees.com – February 17, 2006

Paul Anderson hosted the Open Forum in Charlotte, on February 9, 2006. On the voluntary separation benefit, he said "We are trying to offer as much choice as possible. I know a number of people are disappointed they don’t have the opportunity of the voluntary window in their area."

How bad is morale at Duke Energy? Rather than being distressed about possibly being laid off, a number of employees are disappointed that they will not be eligible for it! So many people just want out. They need the voluntary separation benefit to make up a small portion of the retirement benefits taken from them. And, speaking of morale being in the gutter, morale went out the door when the cash balance plan came in.

Anyone eligible for the separation benefit and considering taking it should read the article linked below:

Do NOT Take Severance Package Before Reading This!

Everyone has heard all the hype about how much money Duke Energy will make from the merger. The merger will also shower over $180 million on Cinergy executives. Jim Rogers will pocket $23 million.

180 Million Reasons to Promote a Merger

Someone asked the pertinent question “what's in the merger for employees?

Paul Anderson said “a vast majority of employees are unaffected… I remember when I came back to this company three years ago. There were a bunch of angry and disappointed people saying, ‘What's going to happen to this company?’… We don't want to get back into that mode. So what's in it for you? It's a healthy company that's an industry leader.”

Translation: The merger is to benefit executives only; employees are promised a warm fuzzy feeling.

There is still a bunch of angry and disappointed people saying, “What happened to my pension?” Under Paul Anderson, Duke Energy has resolved many problems caused by former executives, but employees have been left out. Employees have never left the mode of being disgusted over their lost pension benefits. Nice try on attempting to put a positive spin on everything, but it’s not going to work. The pension problems have NOT been resolved.

Duke Energy is trying to gobble up another corporation without solving all the problems created by the last merger. The cash balance conversion was requisite to buying PanEnergy, following Enron, and trying to dominate the world energy market. Duke Energy failed at world domination and is lucky to have survived at all. Enron did not fair as well. Two of its former CEO’s are on trial and are facing decades in prison.

Duke Energy stonewalled all requests by employees for the company to honor its written pension promises. Duke Energy refused to provide any meaningful explanations of the details of the missing pension benefits. All appeals to the company for a pension resolution were dead ends. As a last resort, employees were forced to sue Duke Energy in federal court over the cash balance conversion.

Pension Lawsuit Filed Against Duke Energy!

Much of the touted financial benefits of the merger will come from the 1500 employees who will be eliminated. Some Cinergy employees are already facing a pre-merger squeeze on benefits. Enjoy the warm fuzzy feeling!

Cinergy Employees Being Squeezed

The complexity of the merger regulation was questioned.

Paul Anderson said that regulatory complexity is the biggest challenge to the merger. He did admit that his faith in it evolving into “a more cooperative, simpler relationship… might be wishful thinking.”

Could be. Some have suggested that the merger should be delayed until the pension lawsuit is resolved. Duke Energy has suffered a major morale problem since the cash balance conversion. It has tried to ignore the unrest by hiding employee survey results, endlessly spinning the facts, and general stonewalling. Some Cinergy employees have expressed dread at being consumed by Duke Energy. They recoil at the thoughts of the inevitable benefit reductions and attempts to weaken their labor unions.

The merger will be a windfall for some executives, but it could maximize misery for all employees.

The windfall merger payouts to executives were questioned.

Paul Anderson said that he does not have a change-of-control provision in his contract.

But he does have a contract that guarantees that he will receive every cent that Duke Energy promised him. The contract effectively frees him from the inconvenience of ever having to sue Duke Energy to collect his compensation, after he has earned it.

Why does Duke Energy frown on employee contracts? Oh yeah, contracts would make pension raiding and benefits reductions so very difficult!

Paul Anderson said “Duke has been on the leading edge at reducing and eliminating these (change-of-control) provisions.”

It's well known that Duke Energy has been on the leading edge of reducing and eliminating employee benefits.

It was not too long ago that Duke Energy was loading up its executives with “poison pill” provisions. (At the same time war was declared on “employee entitlements”.) The selling line was that the provisions discourage hostel mergers. Maybe so, but they also encourage “lovey-dovey” mergers. Mr. Anderson has already cashed in on one change-of-control provision when Duke Energy bought PanEnergy. The endless chain reaction of mergers serve to trigger endless change-of-control payouts to executives. They get millions of dollars for doing nothing and then scream “We’re going broke; we must raid the pension.

The Duke Energy Cash Balance Plan Lawsuit

Of all things, someone asked about the Duke Energy pension lawsuit, which was filed three days before the Open Forum.

Chris Rolfe, human resources VP, was brought in to explain it all away. He said “This is a complex, technical nuance of law...I believe our conversion was appropriate, fair, reasonable and rational.”

Did you expect him to say “The dirty dogs stole our pensions and I’m mad about it too”?

No matter how much pension money the PR types lost, they will always say that they love the cash balance conversion. They will also say the world is flat or anything else that they are instructed to say.

Saying the suit is over a technical nuance of law implies that there may have been some minor oversight or a slight misinterpretation of the law. The cash balance conversion conflict is anything but the result of some slight misinterpretation of the law or a minor mistake. Cash balance plans are no accident. They were deliberately crafted, word by word, to take pension money from employees, without subjecting the corporation to any penalties for their transgressions.

Actuaries exploited the fact that there were no specific laws against cash balance plans. There is a very good reason why cash balance plans are not addressed by law - they had not been invented when ERISA laws were enacted! Cash balance plans were specifically designed because of and to evade ERISA pension laws.

Management consulting firms promoted cash balance plans to corporations as a way to take money out of the pension plan without penalties. The consulting firms knew exactly what they were selling and the CEO’s knew exactly what they were buying – a key to the pension fund vault.

  • Actuarial firms have profited immensely from selling cash balance conversions to corporations.

  • Corporate executives have collected huge bonuses, for implementing cash balance conversions.

  • Corporate lobbyists have made a lot of money from touting cash balance plans to Congress.

  • Politicians have reaped a lot of corporate campaign contributions for lending a sympathetic ear to cash balance proposals.

  • Employees have paid the bill for all of the above through reduced pensions.

The more one reads the history of cash balance plans, the worse it becomes. Government officials have tried to sneak wording into tax regulations that would legalize cash balance plans. Then the same people left the government to sell cash balance plans. It works the other way also. Promotors of cash balance plan have moved in to government positions to regulate pensions.

Pension Skullduggery

Government officials have tried to legalize cash balance plans by altering Treasury pension regulations.

Prestigious Potomac Pension Plundering Party

There have been attempts to legalize cash balance plans by slipping amendments into congressional bills.

Congress Zeros In On Cash Balance Plans

Even today, certain members of Congress are plotting to retroactively legalize cash balance plans.

John Boehner is Death to Pensions

Paul Anderson said “I have looked at what's been done, and I think it was absolutely the right thing to do.”

Paul Anderson has long avoided facing the pension issue. Now he is forced to face it. But he previously tipped his hand on his view of employee benefits:

Meet the New Boss; Same as the Old Boss

Paul Anderson has the most powerful position in Duke Energy, but he still works for the board of directors. The directors were complicit in the cash balance conversion. If Paul Anderson had said anything else, he would have been admitting Duke Energy culpability. The directors would have taken him out behind the woodshed.

In spite of all the good work Mr. Anderson has done, his statement reveals him to be the enemy of all employees.

And, don’t expect prospective new CEO Jim Rogers to buck Paul Anderson and the board of directors. The battle lines are drawn.

The health of Duke Energy’s pension plan was questioned.

Mr. Rolfe said the Duke Energy plan is well funded.

What he did not say is that it does not take nearly as much to fund the Duke Energy plan since the cash balance conversion. It takes a lot less money to fund the plan because employees will get a lot less! That is why Duke Energy was able to go for years with no contributions at all to the pension fund.

Mr. Rolfe said the Cinergy pension plan is “somewhat under-funded.” He said the plans could not be merged for a period of time. That is great news for Cinergy employees. At least some of them were able to choose to keep the original pension plan. Duke Energy forced all employees under the age of 50 into the cash balance plan when it was converted. The fact that all employees aged 40 and above are protected under age discrimination laws was disregarded. By setting the cutoff age at 50, Duke Energy was able to take more money out of the plan.

An employee wondered if there was any guarantee that he would get the money in his cash balance plan when retired.

Duke Energy says the benefits are insured by the Pension Benefit Guaranty Corporation (PBGC).

There have been many problems with the PBGC lately. With more companies walking away from their pension responsibilities, the PBGC is running out of money. Also the PBGC does not guarantee to replace the total value of your lost pension. If you have any pension money anywhere, someone is scheming to find a way to get it. The schemers often turn out to be the company executives.

A younger employee wanted to know if the pension plan would even be available when he retired.

The answer was “the company reserves the right to terminate or otherwise amend any of its benefit plans.” But “has no plans to change the Retirement Cash Balance Plan at this time.”

If you have no contract, nothing is guaranteed. Corporation have even found that they can break contracts by declaring bankruptcy. The executives get rewarded for their mismanagement.

An employee questioned the disparity between executive and employee compensation. He charged that Duke Energy executive compensation increased by 15.8 percent in 2004, according to the November/December issue of Energy Biz magazine. Duke Energy employees’ compensation increased by about 3 percent. He charged the Duke Energy CEO gets 400 times the compensation of the employees.

The answer was, in part: “Routine analysis is conducted to ensure an appropriate earnings sharing ratio between employees and shareholders and that a good correlation exists with respect to the level of incentive payouts between executive and non-executive employees.”

Well, there you have it. Duke Energy thinks everything is just fine!

Open Forum - January, 2006

Employee Advocate - www.DukeEmployees.com – January 26, 2006

No Open Forum was scheduled for December and the January Forum was cancelled. But answers were posted to some of the questions sent in to the January Forum by e-mail.

A suggestion was sent in on how to prevent workplace injuries: Mandatory, gory safety videos, once a year, would scare employees into not having accidents.

The surprising thing is that Duke did not immediately buy into this idea. Duke’s answer was that such videos are counterproductive. It was not known that Duke Energy ever let being counterproductive stand in the way of rolling out any “bold, new safety initiatives.” At least fifty percent of the current safety boondoggles are counterproductive, but that doesn’t stop Duke from promoting them!

Of course, if a “wheel” had made the suggestion, we would all probably be watching gory safety videos once a year!

Open Forum - November, 2005

Employee Advocate - www.DukeEmployees.com - December 5, 2005

Paul Anderson hosted the Open Forum in Charlotte on November 14, 2005. He got straight to the point "We have failed on our objective of zero fatalities this year. You can't have more fatalities than the industry average and blame it on 'bum luck.' We have a serious issue here and we need to focus on it."

This is what separates Mr. Anderson from his horn tooting, flag waving, cheerleading, spin doctoring underlings. He made no attempt to sugarcoat an obvious failure.

He admitted the problem and wants to correct it. What more can anyone ask? He does not have to waste energy trying to create an unbelievable illusion and then waste more energy trying to perpetuate the illusion.

Efforts to make the job safer are commendable. However, the effort to sell the illusion that there will never be another injury, illness or death at Duke Energy is definitely NOT commendable. It represents the deceitful side of Duke Energy that is still alive and well.

Since the last Open Forum, there has been another contractor fatality at Duke Energy:

Another Worker Killed at Duke Energy

Someone asked Mr. Anderson to grade his performance over the past two years. He said “I think the company has surprised itself. When I arrived, the questions were, ‘Are we going to cut the dividend? How can we survive?’ They were defensive. Now, the questions are: ‘Where are we going? What are we going to be?’ The mood has changed. I would give the company an A, except for the safety component. On safety, we'd probably get a D.

“For myself, I'd probably say a B, because no one deserves an A! With 20/20 hindsight, everything could have been done a little better. So it's very hard to grade yourself once you know what all the outcomes were.”

The Employee Advocate agrees with his assessment, but would have given Mr. Anderson an A+, if he had not ignored the pension and benefit issues.

Meet the New Boss; Same as the Old Boss

Open Forum - October, 2005

Employee Advocate - www.DukeEmployees.com - November 1, 2005

The October 18 Open Forum was held in Houston. It was hosted by Duke Energy Chairman and CEO Paul Anderson and Cinergy Chairman and CEO Jim Rogers.

Jim Rogers said that he hoped that as many DENA employees as possible could be transferred to other jobs within the company.

Paul Anderson put forth a valiant effort to save DENA, but he eventually had to let it go. He said "We will do our best to find jobs for people, to treat people fairly who don't end up with a job and to keep everyone informed as we go along."

Question: “Are retirement benefits for Duke employees going to change when the merger takes place? I've heard rumors and I would like facts rather than speculation.”

Answer: “The merger integration process is still in the analysis phase, which includes the review of retirement benefits. When decisions are made, any changes will be communicated with employees.”

Advocate: Management has been avoiding that question every since employees were forced into the despicable cash balance plan. There’s one thing to remember: Employees do not have to tip around like mice, waiting to see what crumbs will hit the floor next. Workers can create their own future, but not with silence.

Duke Energy has been trying for years to sell the illusion that employees are really happy with the cash balance plan. The time is ripe for this illusion to be shattered. Silence is always consent.

Open Forum - September, 2005

Employee Advocate - www.DukeEmployees.com - October 14, 2005

The Open Forum was held in Charlotte, North Carolina on September 29. It was hosted by Duke Energy Chairman and CEO Paul Anderson.

It was said that the merger with Cinergy would not be like the mergers of 1997 and 2002.

That’s nice. 1997 was the year of infamy at Duke Energy. Employees were forced into the despicable cash balance retirement plan, Duke Energy acquired PanEnergy, and Rick Priory became the CEO. Doom was inevitable.

Mr. Anderson said “Employees need to keep an open mind and focus on what we are creating."

Executives would do well to keep open ears and focus on what they have already destroyed. It would be unwise to enter yet another merger, while still carrying the baggage of past mistakes. Employees are due compensation for benefits earned, but never received.

Despite company happy talk, the proposed merger has its share of opposition.

Attorney General Opposes Duke Energy - Cinergy Merger

Duke Energy finally cut the cord on the loser, DENA.

Duke Energy to Dump DENA

The answer to a merger benefits question: “The merger agreement states that neither side will change their benefits in the first year. So nothing will happen in 2006. But ultimately we will have to harmonize the benefits.

“There are all sorts of differences between the two plans. The most significant is that Cinergy went to a cash balance pension plan -- as Duke Energy did -- but they grandfathered some people and allowed them to stay on a defined benefit plan. All new employees go to the cash balance plan. There are some differences in health care -- regional differences, for example, between the Midwest and the Carolinas. But for the time being, it's not going to affect anybody in either organization for at least 1-2 years.”

If this is the case, Duke Energy employees will be locked into their pension and retirement health care losses for at least another year. That scenario bars the intervention by an outside force, such as Congress or a federal court.

Duke Energy has much experience in “harmonizing the benefits.” When two groups are merged, the one with the better benefits always seems to lose.

Cinergy management comes in as morally superior to Duke Energy management. Grandfathering senior employees in the existing plan is one method of avoiding the inherent age discrimination of a cash balance pension conversion. The greediest of corporations never grandfather employees. The employees’ pension money is then available to pad the executives’ compensation.

It is very possible that IBEW representation at Cinergy helped preserve the workers’ benefits. There is some IBEW representation at Duke Energy, but it is miniscule. An organizer said that IBEW tried to fight the Duke Energy cash balance plan, but Duke steam-rolled them. Employees went without a contract for a year, protesting the cash balance plan. Duke Energy would not budge. IBEW had to finally accept the cash balance plan or have no contract. The episode may have ended differently IF Duke Energy had been heavily unionized.

The bottom line is: Duke Energy employees have hated the cash balance plan since the day it was forced upon them. Duke Energy executives will never escape the repercussions of their excessive greed.

Duke says “There are some differences in health care.”

In 1999, the retirement health care earned by future retirees vanished. It was a lot like the pension benefits; it was there one day and gone the next.

Question: “Will the Cash Balance Plan remain intact with the evolving Duke Energy?”

Answer: “In the near term we don't anticipate changes to the benefits plans at either predecessor company. As we go through the transition and integration process, we will determine how the benefits of the two companies will come together.”

Advocate: Duke Energy would be most happy to keep its employees in the cash balance plan and to also force the Cinergy employees into it. Duke has already dipped into their employees’ pensions. If they could only get their hands on the Cinergy employees’ pensions, just think of the executive bonuses that could be given!

Cinergy employees will be well advised to “hit the ground running” to protect the pensions that they have earned. If the newly acquired employees blink, their pensions will be gone. If they blink again, they may find that they are outsourced, with even less pay and benefits.

If there is any way possible, Duke Energy will try to drive the IBEW out of Cinergy. A better alternative is to saturate Duke Energy with union members. Duke Energy employees can take a lesson from the Cinergy employees – the ones not stuck with a cash balance plan!

Question: “I attended the August Open Forum, but didn't have a chance to ask my question. This is for Jim Rogers: Please describe Cinergy's current (pre-merger) pension plan for working folks. You may recall that Duke switched over to a cash balance pension plan in 1997. Has Cinergy done likewise, or has Cinergy retained a traditional pension plan? What will be Cinergy's post-merger pension plan?”

Answer: “Beginning in 2002 and ending in early 2006, Cinergy provided their various employee groups with the choice between the traditional final average pay pension plan and a new cash balance program. The choice period was spread over that time period due to various contract expiration dates and subsequent negotiations with various unions.

“Currently, approximately 19 percent of Cinergy employees participate in the cash balance option, while 81 percent chose to remain in the defined benefit plan. All new employees who were hired as early as Jan. 1, 2003 (again, depending on the employee group) can only elect between two cash balance programs.

“How the two companies' retirement plans, health care plans and other benefits will be integrated -- and when -- will be determined during integration.”

Advocate: Duke Energy executives would have you believe that everyone is delighted with the cash balance plan and that the subject never comes up. The truth is that employees universally despise the cash balance plan. The pension losses forced upon Duke Energy employees by the cash balance conversion is a topic of daily conversation. Employees have repeatedly expressed to management, in no uncertain terms, their contempt for the cash balance plan.

One Duke Energy executive said that he has never has a meeting with employees, without hearing complaints about the cash balance plan. Management cannot dance this one away. This is no time to let up. This is the time to press for the benefits that you have already earned!

Cash Balance Problem Denial

Why do you think 81 percent of Cinergy employees are still in the old plan? No one ever chooses a cash balance plan – they are always forced into one. You can bet the 19 percent in the cash balance plan had no choice!

Paul Anderson has failed in only one area - addressing the employees loss of benefits. He did not create the problem. But each day that he is content to ignore it, he becomes more tainted by it.

Mr. Rogers will come in clean. But if he is happy to ignore the benefits issue, he will also become tainted by it more and more each day.

Tip: It is easier not to become tainted than to ever get clean. It all never washes off. “He robbed employees of their pensions” does not make a good epitaph.

Open Forum - August, 2005

Employee Advocate - www.DukeEmployees.com – September 6, 2005

Cinergy Chairman, President, and CEO Jim Rogers hosted the Open Forum in Charlotte on August 16. He will become the president and CEO of Duke Energy when the companies merge.

Mr. Rogers noted "People have not been afraid to say what's on their minds."

On his management style, he said “It's a little like an inverted pyramid — and I'm at the bottom. My job is really to make sure you have the resources, the training, the support and the help that allows you to do what you do best. In two words, I would say ‘servant leader.’ I serve you.”

On surprises, he said “What has surprised me is how direct the 36 people I've talked to are. I find that refreshing because healthy companies are about people who are open and having fun. People are not afraid to tell you like it is. You might not like it, but you respect it. I'm still listening and learning. I've got more work to do to fully understand the organization.”

Mr. Rogers said that there have been conflicts between Cinergy management and their unions over safety.

So, do not expect him to waltz in an solve all of Duke Energy’s safety issues. If he comes in babbling about “zero injuries,” you will know that he has knuckled under to Duke Energy's wishful thinkers and the truth stretchers.

He said “I view shaping regulatory and legislative policy to be a core competency — just like operating power plants.”

That sounds like it might have come from the "Kenneth Lay Handbook of Enron Excellence." Of course, Mr. Rogers once worked for Enron. Kenny Boy knew if he spread the political contributions around enough that favorable laws would be enacted. He and other energy executives pretty much dictated the corporate giveaway program, called the energy bill. Dick Cheney has been keeping whole affair a secret since 2001.

The Energy Bill Monstrosity

Getting laws made to favor corporations should be no problem, as long as G. W. Bush is in office. Part of the Bush agenda is to give corporations anything that they want.

Mr. Rogers mentioned avoiding “us versus them,” and the merger anxiety among Cinergy employees. It is understandable that Cinergy workers do not want their benefits destroyed as Duke Energy did to its own employees. If Duke Energy will scheme to take benefits from the employees who built the company, just what would it do to newly acquired workers?

IBEW members, who were given a choice of pension plans, do not want Duke Energy to force them into an abusive and possibly unlawful cash balance plan. Duke Energy should clean up its own house before meddling in the benefits of others. If Duke Energy continues to ignore the benefits problem, you can expect big time “us versus them” attitudes and plenty of merger anxiety from the Cinergy employees.

Cinergy Employees Will Keep Benefits

Open Forum - July, 2005

Employee Advocate - www.DukeEmployees.com - July 29, 2005

Duke Energy President and COO Fred Fowler Hosted the Open Forum in Denver on July 20, 2005.

More important than anything Fred Fowler said was what he did not say. A fatal accident occurred on a Duke Power job the day before the Open Forum. Another death happened on the day of the Open Forum. If Mr. Fowler even mentioned the deaths of these workers, it was not included in the electronic version of the meeting.

In the June Open Forum, Mr. Fowler said "DEI is proving that a zero-injury culture is achievable."

The Employee Advocate rebuttal was “But DEI is proving nothing!”

This is standard operating procedure for Mr. Fowler. He only broadcasts the things that promote his agenda and make him seem right. He simply ignores the rest.

Mr. Fowler did write comments to employees on July 25, 2005 about the accidents. He wrote: “Across Duke Power…employees and contractors have taken ‘time outs’ to reflect on these accidents...”

There was a time out taken after the first fatality. In at least some areas, there was no time out the next day for the second on the job death.

Mr. Fowler wrote: “This week, all Duke Power employees and contractors will watch a video during their regularly scheduled safety meetings, to hear directly from Ruth Shaw and other leaders about these incidents and safety expectations."

All employees did not watch such a video and some do not have regularly scheduled safety meetings.

Mr. Fowler added: “Clearly, it is going to take all of us working together to achieve a zero illness-and-injury culture.”

Last year, he stuck his foot in his mouth by claiming that he and his Safety Steering Team would prevent all accidents, illnesses, and deaths at work. Evidently he is partially getting a clue that he and the Safety Steering Team can actually do very little. Now he wants help from everyone.

It is true that everyone must work together to make the workplace as safe as possible. Fred Fowler and his Safety Steering Team cannot do it.

It is also true that all accidents, illnesses, and deaths at work will never be prevented! That’s what Fred Fowler said he could do. That’s what a “zero illness-and-injury culture” implies. Implying is lying. Nothing based on a lie is ever truly successful.

As a result of the two deaths, the zero illness-and-injury culture safety program was changed. But the change was “underwhelming.”

The “Zero Injury/Illness Culture” became the “Zero Injury/Illness Campaign”!

A pocket of the old regime is alive and well. It believes that any problem can be resolved with semantics and spin doctoring.

'Earth-shattering' Safety Changes

An employee mentioned the turnover rate at Duke Energy Field Services (DEFS). “Some of the common themes for leaving have been better advancement, better pay, better benefits, workload and work-life balance.”

The answer: “...The board asked Field Services to do a comprehensive study to make sure our pay is competitive in our sector. That's one part of it. It's not all compensation. People want to work somewhere where they're valued and respected...”

The problem with Duke Energy compensation surveys is that they are always used as a way to take benefits from employees. That is what happen to the pension plan. Someone had a cheaper plan and Duke Energy had to follow. Ditto with health benefits.

Another DEFS question: “We hear a lot about DEFS being a top-performing company. But it seems we've got mediocre pay compared to others in the industry. Top people are leaving the company for better pay and benefits. Are we looking to get a pay raise that’s greater than the cost of living?”

Does there seem to be a pattern developing with these questions? Keep in mind that these questions do not apply only to DEFS!

The answer: “That will be an outcome of the salary survey results...”

It looks like DEFS is doomed, along with everyone else. The more surveys taken, the less benefits employees have left. Not surprisingly, the shrinking benefits phenomenon does not apply to the executive level.

Another good question: “Mr. Fowler said that some employee concerns hadn't moved in 10 years, and that concerned him that someone wasn't listening and/or doing something right. Many of us can't remember when we were able to see the results. Is there a reason they are secret? Is it really a surprise that some employee concerns haven't improved in 10 years?”

The answer mentioned a “summary.” A summary allows a lot of spinning to take place. And, even the summary is only available for a brief period of time. Don’t worry; there is going to be “benchmarking.” It was said that some categories are low and remain low. “An example is the responses to pay-related questions.”

A question was asked about Retirement Cash Balance Plan funding. People tend to get hung up on funding. It is important, but under funding is only one potential problem.

It does not matter how well a plan is funded if you get shortchanged!

“Well-funded” means there is money in the fund. It does not necessarily mean that you will ever see a dime of it.

IBM employees did not like losing up to half of their pensions, due to a cash balance plan conversion. That is why they sued IBM for age discrimination. The employees won the suit. IBM has made partial settlements, but is appealing the age discrimination ruling.

$314 Million Pension Settlement

Open Forum - June, 2005

Employee Advocate - www.DukeEmployees.com - June 29, 2005

Duke Energy COO Fred Fowler hosted the June 15 Open Forum in Houston, Texas.

Mr. Fowler said "DEI is proving that a zero-injury culture is achievable."

But DEI is proving nothing! One cannot cherry pick departments and claim that as proof that Duke Energy has zero accidents. Duke Energy has never achieved zero accidents, and never will. When Mr. Fowler proclaimed that his committee would prevent all accidents, sicknesses, and deaths on the job, he guaranteed his own failure.

Management keeps it quiet about employees who have lost body parts this year. Duke pulls the shade on accidents in the United States, while boasting on the safety record in Ecuador.

Mr. Fowler has not mentioned zero deaths in a while and has slipped in the weasel word “culture.” But it is still an attempt to deceive.

Fred Fowler Lectures Others

Mr. Fowler wants employees to complete the Employee Opinion Survey before July 5. He said “When I look at trends in the Employee Opinion Survey, what frustrates me is we’ve had some employee concerns for 10 years that haven’t moved on the survey. I find that frustrating. I don’t think we’re trying hard enough. We should really listen to what people are saying here, and do something about it. If you haven’t moved the needle in 10 years, you’re obviously not doing something right.”

That is probably the most profound statement that Mr. Fowler has ever uttered. For a number of years, Duke made zero effort to correct any of its blunders. All the effort was spent on spin doctoring, deception, and denial. But it fooled only the most gullible. That’s why the very same problems are still here a decade later.

The Employee Advocate also wants employees to compete the survey.

2005 Employee Opinion Survey

Duke pleads ignorance on what will happen to retirement benefits after the Cinergy merger. But Cinergy IBEW union members will have their benefits protected for five years after the merger.

Cinergy Employees Will Keep Benefits

Some employees are still complaining because the company instituted domestic partner benefits. Many employees are silent when their own benefits are taken away. Yet, they complain loudly when others receive benefits. Such defeatist attitudes make it duck soup for Duke to play one group against another. The game goes on in the corporate office and in Washington. Employees are losing everything, as they gleefully fight each other.

An employee wrote in: “Perhaps I've just missed it, but top management doesn't speak very frequently on the importance of ethics to the company. Will they begin to do so more in the future? (Tone from the top is important for getting the results we want on safety. I think it's equally important for getting the results we want on ethics.)”

Duke says that Ethics has not taken a backseat and is as important today as it was a few years ago.

That is an interesting spin. A few years ago, there was about zero ethics at Duke. There was much lip service about ethics. The Code of Business Ethics was introduced after the cash balance pension conversion. What more do you need to know to realize what a joke that was!

In fact, if one is not going to practice ethics, it is better not to even mention the subject. One who is unethical can be called a scoundrel. One who is unethical, but preaches ethics, can be called a scoundrel, a liar, and a hypocrite. Those who live in glass houses, should not launch mortar shells.

Duke says “We encourage flexible schedules and work-life balance for employees.”

In a way, that’s true. Employees working outages must work 12 hours a day (or night), 6 days a week. Where the flexibility comes in is that they may have to work longer hours and 7 days a week. At Duke, “work-life balance” is managing to get just enough sleep so that you do not kill yourself driving to work or driving home. Once employees get to work, nothing can happen to them. Mr. Fowler has promised zero accident, injuries, and deaths at work. Still, getting to and from work can be a killer.

An employee wanted to know why Duke Energy did not promote the next CEO from within.

Duke wisely said “The organization looks for the most appropriate candidate.”

Just look at the last two CEO’s Duke promoted from within. They were both complete disasters! Employees have never lost so many benefits. The last home-grown CEO almost blew Duke Energy off the map, not to mention the employees.

The Employee Advocate fully agreed with the decision to hire Paul Anderson as CEO, and agrees with the decision to promote Jim Rogers to CEO. All prospective candidates within Duke have been tainted by the past policies of failure. The board was forced to look elsewhere.

Jim Rogers will not be lambasted before he even gets here. If he gets roasted later, it will only be because he earned it. He needs to know that he will not be demonized by default. He will control his treatment by his own actions.

Someone thinks Duke’s insistence on employees coming to work in any kind of weather is at odds with all the safety preaching.

Duke tried unsuccessfully to dance around the concern. It is easy for some armchair cowboy to come up with a grandiose proposal. But management is often unwilling to pay the overhead of the grand plan. It is easier to just say things will be different, but actually do nothing.

To be reasonably safe, employees would never drive to work in hazardous conditions and never work with only a few hours of sleep. Even if these conditions were met, workers would still get injured and get killed on the job. Only the rate of injury and death would go down. Claiming to eliminate all injuries at work, while keeping all the known unsafe policies is total absurdity!

Someone is always complaining about the Sarbanes-Oxley (SOX) law. But it was created for a very good reason – to curtail runaway corporate greed. We need more laws to bind greedy executives. Even with SOX, many corporations are not exactly squeaky clean.

It’s the same deal with the Public Utility Holding Company Act (PUHCA). Someone always wants it repealed because it is a depression era law. It is a depression era law for a very good reason – to try to prevent another depression! Those who say “It’s different this time” are always wrong. Human greed is never different. Without laws to keep the reigns on corporations, the big ones will eat the little ones every time.

Believe it or not, Duke Energy has come to realize that the Yucca Mountain nuclear waste repository has a few problems. Previously, Duke tried to spin away all the problems as political. When scientists admit that they faked the test data, it is not merely a political problem.

Yucca Nuclear Dump is a Sham

Open Forum Number 2 - May 26, 2005

Employee Advocate - www.DukeEmployees.com – June 6, 2005

A second May Open Forum was held on May 26, 2005. It was in held in Houston and was hosted by Duke Energy President and COO Fred Fowler.

Mr. Fowler does not want employees to be sidetracked by the announced merger with Cinergy. He said "We need to keep our focus."

He is absolutely right! Employees need to remain focused on regaining the benefits that Duke Energy has taken away by hook and crook. Cinergy employees need to focus on keeping the benefits that they already have.

The Cinergy, IBEW website stated that union employee will have their benefits protected for a period of 5 years after the merger. Non union Cinergy employees will be protected from benefits grabs by Duke Energy for only one year. A Duke Energy employee said that Duke probably already has the paperwork drawn up to take away the Cinergy employees' benefits. He said that all Duke will have to do is put a date on it. One year and five years after the merger, you may hear a giant benefits sucking sound, as Ross Perot might say.

Cinergy Employees Will Keep Benefits

It seemed like a flashback to the days of CEO Rick Priory when Mr. Fowler said "We have made a lot of promises to Wall Street. We need to deliver our results."

Mr. Priory went so far as to make promises to investors of specific rates of earnings growth, every quarter. It was only a matter of time until the foolish promises blew up in his face, but he could never see it. Employees were not too impressed with Wall Street promises. Duke Energy broke every promise ever made to workers in an attempt to become a worldwide energy giant. Breaking promises to one group in order to make outlandish promises to another group creates a huge credibility gap.

Mr. Fowler followed in Mr. Priory’s footsteps by fretting because Duke Energy’s quarterly earnings did not get enough press coverage. The fatal mistake was once made of playing to the press instead of running the business. Mr. Fowler leaned well, but he learned a losing game.

When Duke Energy made mistakes, the press was blamed because it reported them! See this silly game: Blame the press for not reporting enough and blame the press for reporting too much. Mr. Fowler would do well to run the business and stop worrying about the media. It is not necessary to blow one’s own horn over every small accomplishment. Trying to game the system did not work before and it will not work now.

Open Forum - May 10, 2005

Employee Advocate - www.DukeEmployees.com – May 31, 2005

The Open Forum was held May 10, 2005, in Charlotte, North Carolina. It was hosted by Chairman and CEO Paul Anderson.

Jim Rogers is the CEO of Cinergy. The Duke Energy/Cinergy merger is planned to happen in one year. Mr. Rogers will then become the CEO of Duke Energy and Mr. Anderson will remain as chairman.

Mr. Anderson and Mr. Rogers will chair a task force to look at how the companies will be integrated. Everything will be on the table, including benefits.

This is a golden opportunity for senior management. All the benefits mistakes of the past could be corrected. Or, the benefits mistakes could be compounded. The devil is always in the details.

There has been no decision to separate the electric and gas businesses, after the merger, but it is a possibility.

Mr. Anderson sees workforce reductions in corporate areas, electric back offices, and merchant businesses. Corporate jobs were eliminated in the last big layoff, but here’s the interesting part. Former Duke Energy employees have complained that they were transferred to corporate areas - just before the layoff!

Mr. Anderson is discouraging any discussion between Cinergy and Duke Energy employees. He may have no ulterior motive, but the use of isolation has been a tactic of management for years. By telling a different story to investors, customers, regulators, employees, and the public, Duke executives have profited from the ignorance of all.

Mr. Anderson said “The worst thing that can happen is for everybody to free lance. That would completely derail the whole process. It's not that we don't want people talking to each other. But we don't want independent discussions as to how we would coordinate future activities.”

No, aggressive employee involvement is the very best thing that could happen! If employees passively wait for senior management to do what’s best for them, what do you think will happen? Where did your retirement money go? Where is you retirement health coverage? Where are the 101 smaller benefits that have vanished?

Employees must make it known that the continued erosion of benefits is not acceptable. It must be made crystal clear that it is time for benefits to start returning!

It should be clear by now that there will be no improvement in benefits unless employees make the improvement happen. Ignoring the situation will only make it worse.

If employees appear disinterested in the merger and benefits details, they will end up with even less benefits and senior management will end up will even more millions of dollars. Management has no power to revoke your constitutional rights. If someone must suffer in silence, let it be management.

Open Forum - Page 2