Jobs on line as Meridian restructures
New Zealand's biggest state-owned company is possibly being readied for sale.
Up to 100 jobs are on the line at electricity generator and retailer Meridian Energy, which has just begun restructuring its 700-strong work force and hopes to finish the task by the end of the year.
Chief executive Tim Lusk said it was too early to know the effects of the restructuring on the 300 or so staff in Meridian's Christchurch office and on the 80 staff at Twizel. "The jury is out on that."
While the Government has promised that no state-owned enterprises (SOEs) will be privatised in its first term, industry sources told The Press yesterday that the restructuring was the beginning of the "Telecomisation" of Meridian.
They noted that Lusk, a former Meridian board member, was Telecom New Zealand's wholesale general manager from 2002 to 2006. Meridian's chairman, professional director and investment banker Wayne Boyd, is also chairman of Telecom.
Sources said morale had plunged at Meridian since former chief executive Keith Turner left in March last year.
SOEs Minister Simon Power said the Government was continuing its "long-term hold" policy on SOEs.
The decision to carry out the review was made by the Meridian board and was an operational matter, he said.
Lusk, who began as chief executive in May last year, started the restructuring at the top, changing his executive team. He said it followed an internal review suggested by the board and previous management.
Labour SOE spokesman Clayton Cosgrove said the Government had made an assurance it would not sell SOEs only in this electoral cycle.
"So this is absolutely a restructuring aiming at the next term, so they've got 2 1/2 years to prime them [SOEs] up, gut them and trim them so you can sell them after the next election," he said.
Meridian is the largest of the country's 15 active SOEs in terms of its assets, valued at $6.7 billion in the financial year to the end of June 2008.
In that same year, 204 Meridian employees earned $100,000 or more, with 28 of those on $200,000 or above and eight earning more than $300,000. Lusk's salary was in the $1.4m to $1.41m band.
Last winter's electricity shortage and low southern hydro lakes hit Meridian hard. The SOE reported a net profit of $128.6m to the end of June, compared with annual profits of about $240m in each of the preceding three years.
Lusk said lessons had to be learnt from the shortage. "It was a huge year for the whole industry and particularly challenging for Meridian. It was a bit of a wake-up call across the company."
Meridian staff had been asked how they thought the company was performing, what could be done to make their lives easier and how to make customers happier, he said.
"I wouldn't use the word `restructuring'. My view is what we are doing in Meridian is making some ... continuous improvements around what we do and where we have our resource," Lusk said.
The changes would probably affect 10 per cent to 15 per cent of the Meridian work force, Lusk said.
That would not necessarily translate to between 70 and 100 job losses as some new positions would also be formed.