PG&E files for bankruptcy(latimes.com)
latimes.com
PG&E files for bankruptcy
https://www.latimes.com/business/la-fi-pge-bankruptcy-filing-20190129-story.html
54 comments
I suppose it's a way to extract most value for lenders and shareholders. If a bankrupt company has little staff and no departments besides administrative, there are little liabilities, and little post-dissolution hassle. All remaining assets are reasonably liquid.
If you look closely, quite a lot of the money often goes to senior management. Or it's extracted by a hedge fund in a takeover.
I wonder what their pension liabilities are for current and previous staff? And whether those funds are classed as company assets or seperate fro the bankruptcy?
You think PG&Es problem was outsourcing and not Californian law making them liable for wildfire damages even in the absence of negligence?
That's....a novel take.
That's....a novel take.
You have misunderstood what I have written. Outsourcing was not what caused bankruptcy. It is the bad decisions/management, negligence, corruption etc which might have caused bankruptcy.
What I am trying to point out is how misguided the management is. Instead of looking inwards and fixing their issues they think that the lower rank and file people are the problem (i.e. the people who do not have a say in how the company is run) and lay them off and try to cut costs. Next they outsource their operations which will decrease their efficiency even more which will further exacerbate their problems.
The outsourcing companies had a big push to get into energy and utilities (in short ENU) sector and such companies provided a good revenue until they didn't.
What I am trying to point out is how misguided the management is. Instead of looking inwards and fixing their issues they think that the lower rank and file people are the problem (i.e. the people who do not have a say in how the company is run) and lay them off and try to cut costs. Next they outsource their operations which will decrease their efficiency even more which will further exacerbate their problems.
The outsourcing companies had a big push to get into energy and utilities (in short ENU) sector and such companies provided a good revenue until they didn't.
Don’t forget decades of corruption. Remember when a few blocks of houses exploded a few years back?
Apparently, decades ago, PG&E employees simply pocketed the natural gas pipeline maintenance money instead of doing the work. Last I heard, PG&E was supposed to replace the entire pipeline network in California, since the fraudsters didn’t document which pipes were maintained, and which weren’t.
Just like the current bankruptcy will likely turn out, the only real impact of this on PG&E seems to be higher utility rates (which probably let’s them keep more for profit in absolute terms...)
Apparently, decades ago, PG&E employees simply pocketed the natural gas pipeline maintenance money instead of doing the work. Last I heard, PG&E was supposed to replace the entire pipeline network in California, since the fraudsters didn’t document which pipes were maintained, and which weren’t.
Just like the current bankruptcy will likely turn out, the only real impact of this on PG&E seems to be higher utility rates (which probably let’s them keep more for profit in absolute terms...)
> absence of negligence
As I understood things, that bit is being explored in court and it's looking rather grim for PG&E.
As I understood things, that bit is being explored in court and it's looking rather grim for PG&E.
The absence of negligence? There are many reports of missed chances to improve fire safety. The law has just sped the liability process up.
Interested to hear your full angle on this, not trying to flame bait here but genuinely curious.
My impression based on limited information is that many of the areas were so overloaded with dry dead vegetation that who sparked the otherwise inevitable fire should be irrelevant. The state forcing liability like it is amounts to nothing but a back-door tax propping up areas which should be uninhabited because of the risk.
>>State regulators point out that overall, only about 10 percent or less of the state’s wildfires are triggered by power line issues. But they acknowledge the state’s 176,000-mile system of overhead electrified lines has played a role in igniting some of the biggest and most destructive fires in recent years. https://www.sacbee.com/news/business/article221707650.html
So fires will happen. But also with 176,000 MILES of wires through all kinds of terrain, there's a limit on how much they can do. Summertime those forests almost don't even need a spark to light up, it's so dry and full of combustible material. And then, a tree from 45 yards away falls on the wires...
So fires will happen. But also with 176,000 MILES of wires through all kinds of terrain, there's a limit on how much they can do. Summertime those forests almost don't even need a spark to light up, it's so dry and full of combustible material. And then, a tree from 45 yards away falls on the wires...
My full angle is just that outsourcing of IT for a utility company seems, at best, two steps removed from anything of relevance.
PG&E outsourced something like 70 jobs from their IT department. They laid off under 2% of their workforce.
You have engage in all kinds of "this is a symptom of" third-degree effects stuff. But if you want to just say "they have bad management" why talk about outsourcing of an IT team instead of....their actual core business?
You know who else outsources? Apple & Google. (Apple spends $100 million a year on Indian outsourced IT, for instance) According to the OP's thesis we should expect Apple & Google to shutdown soon.
No one believes that because, really, none of us believe the OP's thesis that outsourcing a tiny fraction of your workforce is a sign of anything material.
PG&E outsourced something like 70 jobs from their IT department. They laid off under 2% of their workforce.
You have engage in all kinds of "this is a symptom of" third-degree effects stuff. But if you want to just say "they have bad management" why talk about outsourcing of an IT team instead of....their actual core business?
You know who else outsources? Apple & Google. (Apple spends $100 million a year on Indian outsourced IT, for instance) According to the OP's thesis we should expect Apple & Google to shutdown soon.
No one believes that because, really, none of us believe the OP's thesis that outsourcing a tiny fraction of your workforce is a sign of anything material.
Some of the recent fires were thought to be caused by PGE negligence. Once brought under control and investigated, it turned out to be your very standard sparks-on-the-road and dry bush fire, just grown to epic proportions. Nevertheless some maintenance issues were found in PGE’s service record and they are still being held accountable by the state, for a fire they didn’t cause. Right criminal, wrong crime.
I’m not a fan of PGE, and I’m personally very happy their filing for bankruptcy, but there does appear to be some political grandstanding and scapegoating here.
I’m not a fan of PGE, and I’m personally very happy their filing for bankruptcy, but there does appear to be some political grandstanding and scapegoating here.
You might want to read the article, its well written and addresses that point.
> If you see a company outsourcing everything and laying off its own workers it means that the company is not going to survive for long. Whenever the management feels that workers are a problem and not the way it operates its business that company will soon die in the next few years.
The same managers will run a very similar company with the same customers in less than 3 months.
The same managers will run a very similar company with the same customers in less than 3 months.
Workers are a cost factor. From an accounting perspective the belief is that eliminating that cost would put more numbers on the other side of the balance sheet. The financial and economic reality is that those people either performed a necessary task the business needs or they didn't and if they were needed it will cost more to eliminate them. These kinds of strategic failures are likely present in more than just labor.
With all those forests ready to scorch thanks to mismanagement and global warming it was just a matter time. Nothing to do with contractors or layoffs. Maybe, they might have gotten lucky this fire, but not the next and the next and the next.
a very large number of businesses outsource almost their entire functionality. Uber, Lyft, Robinhood, Comcast, Fedex/UPS, Netflix (i cant remember which one uses ICs for all of their trucks). aggregators/marketplaces/exchanges are just one of the many business models companies pursue.
Not saying you are wrong, but a single instance (or two) of an occurrance does not make a pattern.
Its an extremely common pattern, in tech companies it tends to manifest with laying off all the R&D staff, posting a few quarters of amazing returns, and the executives jumping ship to do it again before the whole house collapses.
Why is it acceptable to privatize profit, but socialize risk again?
A company shouldn't have carte Blanche to pass the cos of it's incompetence and neglect on to the customer. If anything, they should have their rates frozen until such time as they have made whole all those who have been harmed.
It is okay for companies to die. It should happen.
A company shouldn't have carte Blanche to pass the cos of it's incompetence and neglect on to the customer. If anything, they should have their rates frozen until such time as they have made whole all those who have been harmed.
It is okay for companies to die. It should happen.
That argument is completely misplaced here. PG&E is a rate regulated utility, which means its profit margin is based on its costs and investments. The rates are set to ensure a modest profit, generally between 5-10%. That means that to the extent PG&E underinvested in safety (lowering costs), it was ratepayers that benefited, because that kept rates low. Investors, by contrast, earned a low return on the stock, and will have their equity largely if not completely wiped out in bankruptcy.
This is a recurring story in rate-regulated utilities all over the country. Public utility commissions want to keep rates low, generally artificially low. So they set rates in a way that causes utilities to externalizations risk or pollution. For example, water rates in the US are very cheap because water utilities routinely dump untreated sewage into rivers. If you forced say DC Water to never dump into the Potomac again, it would have to invest massively in storm water management systems, which would in turn drive up rates.
This is a recurring story in rate-regulated utilities all over the country. Public utility commissions want to keep rates low, generally artificially low. So they set rates in a way that causes utilities to externalizations risk or pollution. For example, water rates in the US are very cheap because water utilities routinely dump untreated sewage into rivers. If you forced say DC Water to never dump into the Potomac again, it would have to invest massively in storm water management systems, which would in turn drive up rates.
Probably because the risk is such that no industry would go into that business if costs weren't socialized to a degree.
> If anything, they should have their rates frozen until such time as they have made whole all those who have been harmed.
So the fire apparently started because PG&E didn't have the resources to properly maintain rural lines. And the response is to further deprive them of funds?
This is what I'm talking about here. If PG&E is supposed to shoulder the burden of forest fires caused by downed lines, then electricity is going to get a lot more expensive. I'm not sure where this idea that utilities are supposed to take more responsibility for risk while simultaneously dropping or freezing rates. That's not how money works. More risk means higer costs.
> If anything, they should have their rates frozen until such time as they have made whole all those who have been harmed.
So the fire apparently started because PG&E didn't have the resources to properly maintain rural lines. And the response is to further deprive them of funds?
This is what I'm talking about here. If PG&E is supposed to shoulder the burden of forest fires caused by downed lines, then electricity is going to get a lot more expensive. I'm not sure where this idea that utilities are supposed to take more responsibility for risk while simultaneously dropping or freezing rates. That's not how money works. More risk means higer costs.
Which is why utility companies get tax breaks, direct tax funding, and legal monopolies.
What you’re saying is the current system of zero risk, high gain, is acceptable.
In this case pg&e deliberately chose not to perform maintenance on their lines, despite turning a profit (meaning they could afford to do more) and despite receiving tax payer money specifically for the purpose of that maintenance.
Instead the issued dividends to private people and orgs, and to executive bonuses.
Those people have now have that money, a lot of which already came from taxpayersz the same tax payers that have now been left with the bill for damage caused by pg&e not doing what it had agreed to do.
That is a pretty canonical example of heads I win, tails you lose.
In fact as long as companies are allowed to behave like this (eg with no criminal liability in management), there is no downside to this kind of theft.
What you’re saying is the current system of zero risk, high gain, is acceptable.
In this case pg&e deliberately chose not to perform maintenance on their lines, despite turning a profit (meaning they could afford to do more) and despite receiving tax payer money specifically for the purpose of that maintenance.
Instead the issued dividends to private people and orgs, and to executive bonuses.
Those people have now have that money, a lot of which already came from taxpayersz the same tax payers that have now been left with the bill for damage caused by pg&e not doing what it had agreed to do.
That is a pretty canonical example of heads I win, tails you lose.
In fact as long as companies are allowed to behave like this (eg with no criminal liability in management), there is no downside to this kind of theft.
Utilities do not generally get tax breaks, or direct funding. What they do is endure regulated rates and low profit margins in return for a low risk business (e.g. getting a legal monopoly). Forcing them to bear massive, unlimited risk, while having their rates regulated to ensure modest profits totally breaks the model.
At the end of the day, we depend on private capital to build our electric grid. It’s not public money building power lines and transmission stations. There is a business case for investing in a utility, where you might eke out 5-10% profits, but are guaranteed that your business won’t be obsolete tomorrow or be in the hook for huge liabilities. That can be an alternative to investing in say something like Facebook where you’ve got 25% profit margins but a business that could be obsolete in face of the next new thing. Low profits and massive risk of your shares becoming worthless makes it very unattractive to investing in that infrastructure.
At the end of the day, we depend on private capital to build our electric grid. It’s not public money building power lines and transmission stations. There is a business case for investing in a utility, where you might eke out 5-10% profits, but are guaranteed that your business won’t be obsolete tomorrow or be in the hook for huge liabilities. That can be an alternative to investing in say something like Facebook where you’ve got 25% profit margins but a business that could be obsolete in face of the next new thing. Low profits and massive risk of your shares becoming worthless makes it very unattractive to investing in that infrastructure.
The "private capital" you're talking about is largely on top of the massive funds from government sources. In most countries it was entirely built out by central governments.
Re: taxes - please look at your line items and notices the various "fees" you're charged.
I think the problem here is that you believe that utilities should be generating massive profits. Given they're backed by the state - PG&E literally got laws made to retroactively reduce their liability - then any profit that they make or distribute is tax payer money.
Let's put this super simply:
Let's say the company makes $X a profit, and distributes $Y to shareholder and executive remuneration (annually).
After N years they have made N$X, given out N$Y to owners, etc, their bank balance is Z=N($X-$Y) (obviously exact amounts change year to year, but we're being simple here). If Z is less than 0 then they've been running at a loss for N years, and we'd have no problem saying they should go bankrupt - they would have long since lost the ability to get loans, etc.
Now, let's say this is a public utility, then their annual profit is made up of:
1. Revenue in the form of below market resources costs (e.g. they don't pay market rates for land) 2. Revenue from state granted fees 3. Other tax related subsidies
So lets put these altogether and say $X = (actual profit) + $T (T=tax payer).
So after N years, they've received N$T funds. So if their bank balance is below $T, and $Y is greater than zero, they have been running at a loss, and they've been paying out the owners with tax payer money. Eg. they are taking tax money that is intended to support the utility and divesting it.
This is what PG&E did.
They took fees, and they took tax payer money. Then they "reduced" their expenses by reducing maintenance. That gave them a "profit" they divested to private interests. Now, when the costs of their failure to maintain infrastructure came due they couldn't afford it. Which means they're now taking even more tax payer money. Even if the company is taken apart, that money doesn't cover the costs they have inflicted.
Re: taxes - please look at your line items and notices the various "fees" you're charged.
I think the problem here is that you believe that utilities should be generating massive profits. Given they're backed by the state - PG&E literally got laws made to retroactively reduce their liability - then any profit that they make or distribute is tax payer money.
Let's put this super simply:
Let's say the company makes $X a profit, and distributes $Y to shareholder and executive remuneration (annually).
After N years they have made N$X, given out N$Y to owners, etc, their bank balance is Z=N($X-$Y) (obviously exact amounts change year to year, but we're being simple here). If Z is less than 0 then they've been running at a loss for N years, and we'd have no problem saying they should go bankrupt - they would have long since lost the ability to get loans, etc.
Now, let's say this is a public utility, then their annual profit is made up of:
1. Revenue in the form of below market resources costs (e.g. they don't pay market rates for land) 2. Revenue from state granted fees 3. Other tax related subsidies
So lets put these altogether and say $X = (actual profit) + $T (T=tax payer).
So after N years, they've received N$T funds. So if their bank balance is below $T, and $Y is greater than zero, they have been running at a loss, and they've been paying out the owners with tax payer money. Eg. they are taking tax money that is intended to support the utility and divesting it.
This is what PG&E did.
They took fees, and they took tax payer money. Then they "reduced" their expenses by reducing maintenance. That gave them a "profit" they divested to private interests. Now, when the costs of their failure to maintain infrastructure came due they couldn't afford it. Which means they're now taking even more tax payer money. Even if the company is taken apart, that money doesn't cover the costs they have inflicted.
I believe may be confusing investor-owned utilities like PG&E with government-owned public utilities. PG&E does not receive taxpayer money. They are a private company such that their entire revenue stream is dictated by a government commission [1]. The commision-fixed pricing benefits the consumer because we pay less than what electricity is "actually worth". The drawback is that PG&E cannot afford to mitigate risks such as forest fires. Presumably, if the "true price" of electricity included the costs required to prevent forest fires, it would be significantly higher.
[1]https://www.energy.ca.gov/pou_reporting/background/differenc...
[1]https://www.energy.ca.gov/pou_reporting/background/differenc...
As far as I can tell PG&E hasn't paid dividends since 2017. Legal monopolies also come with burdens. PG&E is disallowed to refuse service to high-risk regions. When they shut down power to places during high fire risk, the company receives penalties. It's a difficult trap. If you reduce exposure to risk, you reduce income - which further hampers ability to provide a safe service.
At the end of the day, people can't eat their cake and have it too. When delivering power to high risk areas, either of two things happen: either we accept the danger, or the utility charges higher rates to offset the risk of damage. There's no magic solution. A government take over of PG&E isn't guaranteed to change anything, other than making the taxpayers directly liable for any mishap.
At the end of the day, people can't eat their cake and have it too. When delivering power to high risk areas, either of two things happen: either we accept the danger, or the utility charges higher rates to offset the risk of damage. There's no magic solution. A government take over of PG&E isn't guaranteed to change anything, other than making the taxpayers directly liable for any mishap.
That would make it a mere 7 years after the failure to maintain pipeworks results in an explosion that killed 8 people.
It also didn’t stop giving bonuses to the executive board that make the budgetary decisions.
This is also a glib dismissal of the effects of decades of under maintenance resulting in ever increasing costs to bring things back in order. Essentially deferring maintenance until the point of failure, at which point you declare bankruptcy and get bailed out by the people you defrauded.
It also didn’t stop giving bonuses to the executive board that make the budgetary decisions.
This is also a glib dismissal of the effects of decades of under maintenance resulting in ever increasing costs to bring things back in order. Essentially deferring maintenance until the point of failure, at which point you declare bankruptcy and get bailed out by the people you defrauded.
There isn't zero risk the shareholders of PG&E lost 80% of the value of the stock since 2017.
Since I analysis systems for a living and for fun, it would be interesting to look at PG&E books. How much maintenance was deferred? It is possible to properly maintain their equipment with the current rate structure?
Maybe the company was put in an impossible situation by the Public Utilities Comission.
Since I analysis systems for a living and for fun, it would be interesting to look at PG&E books. How much maintenance was deferred? It is possible to properly maintain their equipment with the current rate structure?
Maybe the company was put in an impossible situation by the Public Utilities Comission.
The shareholders made huge returns in the prior decades. So how much of that loss was a correction caused by the market realising the way historic profits were created was going to start costing shortly?
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I think you missed part of the article:
"The utility company’s stock has lost more than 80% of its value since the 2017 fires broke out, and its credit rating has been downgraded to junk status."
How was the downside risk of the shareholders socialized?
PG&E doesn't have carte blanche, it is a regulated monopoly, any changes to the rate structure has to be approved.
As for the company dying, people in California will probably prefer to continue having the electricity
"The utility company’s stock has lost more than 80% of its value since the 2017 fires broke out, and its credit rating has been downgraded to junk status."
How was the downside risk of the shareholders socialized?
PG&E doesn't have carte blanche, it is a regulated monopoly, any changes to the rate structure has to be approved.
As for the company dying, people in California will probably prefer to continue having the electricity
"PG&E doesn't have carte blanche, it is a regulated monopoly, any changes to the rate structure has to be approved."
How often do the rate increases that they seem to announce virtually every month actually get rejected?
Do they even ever not get approved?
I have not done the comparisons myself, but I have heard that California's energy prices are some of the highest in the country. I don't understand how that can be if their prices really are held artificially low by the government.
How often do the rate increases that they seem to announce virtually every month actually get rejected?
Do they even ever not get approved?
I have not done the comparisons myself, but I have heard that California's energy prices are some of the highest in the country. I don't understand how that can be if their prices really are held artificially low by the government.
This is critical infrastructure. The risks must be socialized IMO. That makes you wonder if power infrastructure should be left to private enterprise to the extent it now is, but frankly I doubt a state-owned company would have been better prepared, either. People want cheap energy either way. Requiring companies to be able to cover the costs of natural disasters would be politically difficult because it would raise energy prices to the consumer, regardless of ownership model.
I wonder what model of governance would properly account for rare disasters. A disaster fund? Of course, if wildfires become more common, as it seems likely, then in a sense this problem should solve itself one way or the other because it will not be possible to run a company like PG&E very long without being able to cover the costs incurred.
I wonder what model of governance would properly account for rare disasters. A disaster fund? Of course, if wildfires become more common, as it seems likely, then in a sense this problem should solve itself one way or the other because it will not be possible to run a company like PG&E very long without being able to cover the costs incurred.
> Why is it acceptable to privatize profit, but socialize risk again?
We privatize profit because there would be no company if profits weren’t given.
We socialize risk because the government is permeable to manipulation, and they freely accept whatever argument that makes them pay for the risk. Govts don’t have to invest in private sectors. They don’t have to borrow in the name of their subjects. Yet they do it, without the consent of their subjects, because it is a non-working democracy, and because people accept it like business as usual. So yes, good taxpayers have to pay for badly managed private companies.
We privatize profit because there would be no company if profits weren’t given.
We socialize risk because the government is permeable to manipulation, and they freely accept whatever argument that makes them pay for the risk. Govts don’t have to invest in private sectors. They don’t have to borrow in the name of their subjects. Yet they do it, without the consent of their subjects, because it is a non-working democracy, and because people accept it like business as usual. So yes, good taxpayers have to pay for badly managed private companies.
There are too many state hands in the pockets; there is no way they allow it to go under.
Because modern capitalism is all about "ONLY UPSIDE, ZERO DOWNSIDE"
It’s not capitalism when your risks have the government as a backstop. Failure is a healthy market mechanism; socialized losses only hurt investors’ ability to make capital decisions and consumers’ ability to have agency via their individual choices.
socialized losses encourage risk taking as there’s no real cost to the people running companies (see the bank crisis), and a holy expect pg&e to survive bankruptcy without actually paying for the damage or returning any of the stolen tax dollars.
It's pretty meaningless to say that such-and-such implementation of capitalism isn't real capitalism because of a reason that a) is common to just about every implementation of capitalism, certainly every major one and every one celebrated as a success story of capitalism and b) seems basically unavoidable in the real world. This is real capitalism and we should admit that.
Reminds me of some other arguments about economic systems.
Reminds me of some other arguments about economic systems.
No this is clearly not real Scottish capitalism :)
Perhaps the only people less worthy of receiving a bonus of any kind than the Moody's and S&P analysts who as recently as three weeks ago rated now bankrupt PG&E as investment grade is the management of PG&E, which one year after the most destructive fire in California history sparked, literally, another "most destructive fire in history" with no hedges or fallbacks in place. And yet as part of its first day bankruptcy motion, the California utility that filed for bankruptcy early on Tuesday is seeking to pay employees about $130 million in performance bonuses for last year, an amount which is due to be paid in March 2019.
According to compensation and benefits court filing, the company - which is facing $51.7 billion in total debts - said that the bonuses "are critical to ensuring that employees stay motivated." About 14,000 employees are eligible for short-term incentive plan cash awards for 2018, for achieving performance targets and individual goals. The payouts range from about $5,000 to $90,000 per person, not including senior officers and directors.
PG&E also said it wants to maintain a rewards program that gives gift cards to workers who go "above and beyond" their regular duties, at a total cost of about $15.2 million a year; the company is also seeking to pay out $650,000 in outstanding awards.
In separate filings, PG&E said it will keep paying $327 million annually for pension benefits. The decision to keep paying into its pension plan means about 54,000 current and former employees are unlikely to be drawn into the bankruptcy case, company says in court papers.
The utility also pays $109.2 million annually in 401(k) matching funds for 22,000 current employees and $28.3 million annually toward retiree health care, and has asked the court to keep such payments.
Also of note, the company’s $5.5 DIP loan (which was arranged by J.P.Morgan, Bank of America, Barclays, Citi, BNP Paribas, Credit Suisse, Goldman Sachs, MUFG Union Bank and Wells Fargo) doesn’t set any deadlines for PG&E to sell assets or adopt a detailed reorganization plan, which gives the utility far more freedom than most companies operating in Chapter 11. In fact, one can almost claim that the only limitation imposed upon PG&E is for litigants to seek relief for the tens of billions in legal fees that they will be entitled to as a result of the deadly California fires.
According to compensation and benefits court filing, the company - which is facing $51.7 billion in total debts - said that the bonuses "are critical to ensuring that employees stay motivated." About 14,000 employees are eligible for short-term incentive plan cash awards for 2018, for achieving performance targets and individual goals. The payouts range from about $5,000 to $90,000 per person, not including senior officers and directors.
PG&E also said it wants to maintain a rewards program that gives gift cards to workers who go "above and beyond" their regular duties, at a total cost of about $15.2 million a year; the company is also seeking to pay out $650,000 in outstanding awards.
In separate filings, PG&E said it will keep paying $327 million annually for pension benefits. The decision to keep paying into its pension plan means about 54,000 current and former employees are unlikely to be drawn into the bankruptcy case, company says in court papers.
The utility also pays $109.2 million annually in 401(k) matching funds for 22,000 current employees and $28.3 million annually toward retiree health care, and has asked the court to keep such payments.
Also of note, the company’s $5.5 DIP loan (which was arranged by J.P.Morgan, Bank of America, Barclays, Citi, BNP Paribas, Credit Suisse, Goldman Sachs, MUFG Union Bank and Wells Fargo) doesn’t set any deadlines for PG&E to sell assets or adopt a detailed reorganization plan, which gives the utility far more freedom than most companies operating in Chapter 11. In fact, one can almost claim that the only limitation imposed upon PG&E is for litigants to seek relief for the tens of billions in legal fees that they will be entitled to as a result of the deadly California fires.
Santa Rosa, CA here.
You have no idea how hard those PG&E workers busted their ass up here in Nor Cal during and after the Tubbs fire - a lot of them lost their own homes, and they were still out doing their jobs before the firefighters were even allowed to start doing their jobs 24 hrs in.
On the gas side, they went to every house in the city - thousands of houses - and turned off gas, and then did the same thing to turn it back on. An army of workers went neighborhood to neighborhood just to make sure we didn't explode.
Factor in that there were no hotel vacancies, and the PG&E workers were willing to live in their trucks with 4 other dudes for 2 weeks straight, and yeah - I think they should be compensated.
You have no idea how hard those PG&E workers busted their ass up here in Nor Cal during and after the Tubbs fire - a lot of them lost their own homes, and they were still out doing their jobs before the firefighters were even allowed to start doing their jobs 24 hrs in.
On the gas side, they went to every house in the city - thousands of houses - and turned off gas, and then did the same thing to turn it back on. An army of workers went neighborhood to neighborhood just to make sure we didn't explode.
Factor in that there were no hotel vacancies, and the PG&E workers were willing to live in their trucks with 4 other dudes for 2 weeks straight, and yeah - I think they should be compensated.
thanks for jumping in with this I think its a pretty rare case that an employer facing tens of billions in claims keeps paying into the comp plan and im pretty happy with PG&E right now. I think that likely its a good sign that they want to keep the employees motivated.
one other thing OP talks about is that the payouts are up to 90k for senior members. that's a far cry from the millions that we see bank execs getting. I dont think we should treat this with such hostility.
one other thing OP talks about is that the payouts are up to 90k for senior members. that's a far cry from the millions that we see bank execs getting. I dont think we should treat this with such hostility.
Why should the senior execs get anything other than a pink slip and/or a very long look at the bad side of a prison cell door?
frankly, because they were promised it. if we create scenarios where employers can skip out on paying due compensation to employees who have already performed the work then our corporate system would be even more rigged then it is.
In the case of corporate governance, we hold board members accountable. not employees who do as they are paid.
In the case of corporate governance, we hold board members accountable. not employees who do as they are paid.
Woah there. You have 14,000 people that make the company go around, so let’s go after them and their families, their retirement, etc. These are the linemen who are out in storm to restore power, those maintain the comms system to keep the transmition system and grid running and the lights on, and 1000’s of other tasks. Surely in this group there are some that under perform, and some that over perform just like any company. Yes it’s a union shop, and I suspect you’ll find some insane union rules protecting people.
You can disagree with the management, and say they should be the first against the wall. But why are the 14,000 the less worthy? Should we blame the 16,000 employees of Uber the next time Travis Kalanick opens his mouth? ;)
You can disagree with the management, and say they should be the first against the wall. But why are the 14,000 the less worthy? Should we blame the 16,000 employees of Uber the next time Travis Kalanick opens his mouth? ;)
Interesting information. Do you know if the bonuses are part of the union contract?
"Approximately two-thirds of PG&E’s employees are covered by collective bargaining agreements with three labor unions: the International Brotherhood of Electrical Workers (IBEW) Local 1245, the Engineers and Scientists of California (ESC) IFPTE Local 20 and the Service Employees International Union (SEIU) United Service Workers West."
http://www.pgecorp.com/corp_responsibility/reports/2010/em06...
Maybe paying those bonuses is required.
"Approximately two-thirds of PG&E’s employees are covered by collective bargaining agreements with three labor unions: the International Brotherhood of Electrical Workers (IBEW) Local 1245, the Engineers and Scientists of California (ESC) IFPTE Local 20 and the Service Employees International Union (SEIU) United Service Workers West."
http://www.pgecorp.com/corp_responsibility/reports/2010/em06...
Maybe paying those bonuses is required.
"State Sen. Bill Dodd (D-Napa) said the situation is “extremely disappointing and underscores the need for change at PG&E in both its leadership and corporate culture.”"
Hypocrite. Senator Dodd just happens to be the author of the big PG&E bailout bill of just a few months ago (which became law).
Hypocrite. Senator Dodd just happens to be the author of the big PG&E bailout bill of just a few months ago (which became law).
If a ship is sinking it’s perfectly logical to first save the ship and then criticize the crew afterwards. Calling someone a hypocrite because they critique the captain but didn’t let the ship sink seems kind of odd.
Maybe California will have something better than third-world electrical infrastructure (quasi inexistent interruptions, secure, underground cables, etc.)
It looks like a pattern now. If you see a company outsourcing everything and laying off its own workers it means that the company is not going to survive for long. Whenever the management feels that workers are a problem and not the way it operates its business that company will soon die in the next few years.