Union says 'no' to IEC job cuts

Israel Electric wants to cut costs by slashing some 1,000 positions by 2010.

iec biz 88 224 (photo credit: Ariel Jerozolimski)
iec biz 88 224
(photo credit: Ariel Jerozolimski)
The Israel Electric Corporation workers' union said Sunday it would fight the company's plans to seek to "retire" some 1,000 workers by 2010, increasing by 700 the number of employees who have already signed agreements to take early retirement. "This is only something that is written on paper, there is no substance to it," David Zarfati, IEC workers' union head, told The Jerusalem Post. "We have no intention of approving such a plan and for us, to even consider it, would be a waste of time. It is nonsense. What is real are the negotiations that we have been conducting concerning our wages and the planned reforms." Under the reforms, the IEC will be split into a number of firms handling electricity production, distribution and transport by 2009. By mid-2015, the production and distribution firms should be 49 percent privately owned. The reforms are aimed at creating real competition and a reduction in prices and were originally supposed to begin in 2013. While the IEC board approval of an early retirement plan comes soon after the country's largest energy producer announced that it lost NIS 353 million over the third quarter, the company insisted plans to give early pensions to 1,000 employees have been in the works for a while. "This is not a new idea for the company, but we have been formulating it for quite some time," an IEC spokesman told the Post. "Additionally, it's not like this is going to happen right away -nothing is going to happen until we arrive at an agreement with the workers." The spokesman, noted that the company has not even begun negotiations with the workers, but intends to do so within the next few weeks. The company currently employs approximately 13,000 workers and was ordered in August to present an efficiency plan as well as trim its costs, including cutting the number of employees, as part of the Public Utilities Authority's (Electricity) decision to allow a 5% rise in electricity rates. The IEC had originally requested a 15% rate increase. The Authority, which is responsible for setting electricity prices, will reexamine its decision in January. The IEC has come under recent fire from State Comptroller Micha Lindenstrauss, who revealed in his November Comptroller report that among the managers of the company's manpower division, the proportion of employees having relatives working for the company is as high as 64%. He also found that 27% of IEC employees have at least one relative working in the company. Separately, the IEC said on Sunday its directorate has approved the go-ahead for "Project D," a unique $1.8 billion coal-driven power station in Ashkelon with two 600MW generators that will be equipped with flue gas desulphurization and combustion systems in order to reduce pollution. The company has begun the tender processes for the major equipment. The company estimates that it will complete construction on the project sometime in 2014 and expects to begin producing energy in 2015.