Given the recent media coverage of FirstEnergy Solutions’ relationship with its union workforce, I thought it was important to set the record straight regarding our negotiations to date and our goals. The union workforce is a critical part of our team that ensures our power plants generate power safely and reliably. We cannot operate without these valuable workers and our goal is to reach agreement with them.

FirstEnergy Solutions has collective bargaining agreements with our unionized workforce at each of our five power plants. Prior to emerging from bankruptcy, FirstEnergy Solutions must reach modifications to the current agreements with each of our unions that will govern benefits earned going forward.

We have been negotiating with our bargaining units in good faith since March. As a result, we now have signed framework agreements at three of our five power plants including the Davis-Besse and Sammis plants in Ohio. We have continued to negotiate in good faith with our bargaining units at our other two plants (including the Perry plant in Ohio) and made updated proposals to each of them earlier this month.

I want to describe the contents of those proposals. The company has proposed to keep all wages, wage increases, and work rules the same as in the existing contracts. We have also agreed to keep all medical, dental, time off and other benefits the same for the employees as in our existing contracts. Through an agreement with FirstEnergy Corp., we have also ensured that all employees will receive any benefits they have earned under the existing FirstEnergy Corp. pension plan. We have been consistent with these statements since April.

The only open issue we have is retirement benefits after emergence, since we can no longer participate in the FirstEnergy Corp. pension plan at that time. No retirement benefits earned prior to emergence will be taken away.

Our power plants operate in a highly competitive market and must compete with other unregulated power generators in what is a tough economic environment. None of our competitors has started a new traditional pension plan or offers such a plan to new employees. Our proposal allows our plants to remain competitive, stay open, and continue to employ the workers we rely on to operate those plants.

We have offered an enhanced defined contribution plan. Recent data show that only 6% of large employers in all industries still offer traditional pension plans to new employees while more than 84% now offer defined contribution plans. Adding additional retirement funding to employees’ 401K savings plans gives the employee control over their investments and provides portability for employees if they leave the company.

We have offered an attractive and comprehensive set of retirement benefits for service after emergence, including continuing to offer the same 401K savings plan match program employees have today. The company matches $0.50 of each $1.00 contribution made by employees up to 6% of pay.

In addition, employees will receive additional contributions to their 401K based on their age and years of service. All service previously earned by these employees will be credited to them. The average additional contribution will be 7% of regular pay while long tenured employees will receive up to 9%. This is the same retirement benefit levels offered to FirstEnergy Corp. employees hired in the past several years. We are also offering bridge payments to reduce the impact of the changes to the retirement plan for employees nearest retirement.

We have offered a retirement program that is very competitive based on extensive benchmarking to competitors and industry in general. And because we recognize past service, it exceeds what employees could get if they moved to a new company.

We believe this to be a fair offer, since we kept other elements of the existing wages and benefits intact and all benefits earned to date will be paid.

Finally, I note that much of the news has focused on legal filings made by both the company and the bargaining units. These are designed to preserve each party’s rights in the event that negotiations fail. The content of the filings by FirstEnergy Solutions have been public since February of this year. While those filings were a legal requirement, it remains the company’s goal to reach an agreement outside of the courtroom and work with our union employees to build the future of the company.

 

Judge is the president and chief executive of FirstEnergy Solutions.