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1.
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Is this acquisition and merger considered “hostile?” It’s been referred to that way in the media.
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No, despite at least one media outlet referring to it that way a few times, this is not a hostile takeover. A hostile takeover is the acquisition of a company not through a purchase and sale agreement negotiated with the target company’s management, but by going directly to the company’s shareholders or fighting to replace management. In this case, Gaz Métro offered a bid superior to the offer from Fortis, CVPS management negotiated improvements to that proposal, and the CVPS Board of Directors voted unanimously to accept the Gaz Métro offer.
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2.
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During the announcement meeting and in subsequent written and televised coverage, people said Rutland will become the “Headquarters for Operations and Energy Innovation.” Can you clarify the term “operations?” There has been significant confusion as to whether CVPS and GMP use the term “operations” (forward facing vs. back office) in the same way.
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Both companies use the term “operations” to mean field-focused and customer-facing activities. More details on the Headquarters for Operations and Energy Innovation will be provided in the months ahead as the transition team works through the issues.
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3.
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An editorial in the Times-Argus and Rutland Herald stated the following: “In the end, GMP agreed that personnel reductions through attrition would be proportional between northern and southern Vermont. GMP also agreed that the Rutland headquarters would be more than a branch office: It would be headquarters of operations, customer service and energy innovation, functions that could entail larger numbers than the corporate functions remaining at the headquarters in Colchester.” Is customer service guaranteed to be part of the Rutland headquarters?
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As we said in the last Q-and-A, no decision has been made about the exact location of a call center, but we expect our call center staff will play a prominent role in the new merged company. Advanced phone technology allows call centers in different locations to function as one coordinated unit responding to customers. Given our commitment to no layoffs and no long-distance relocations, it is likely that call center functions will reside in both northern and southern Vermont. This issue will be more clearly addressed during the transition process, and we will communicate any decisions directly to employees when we have more specific information.
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4.
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What will happen in areas where there are redundancies, with more people than are needed to do the work? For example, if there are two people who do the same thing now, one each at CVPS and GMP, and the new merged company requires just one person to do the job, will they both have to apply for it? And if so, what will happen to the person who doesn’t get the position since there aren’t any layoffs?
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These are issues the transition team will have to consider. We understand it may be disconcerting that we can’t give a more specific answer now, but we are committed to not using layoffs. We will answer this question with more specifics once the transition team has analyzed the issue. But it bears repeating that, other than some executive officers, no one will be laid off or forced to commute long distances to keep their job. And while it might seem there could be a fair amount of duplication, it’s also important to note that CVPS’s and GMP’s attrition rates are expected to be higher than needed to achieve the desired savings, and that the transition itself will entail a lot of work as the companies’ various systems and departments merge.
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5.
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Are pay cuts or a pay freeze a possibility for some employees? Are reductions in work hours a possibility for some employees?
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6.
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How will temporary employees and interns be treated during the merger? Will they be looked at on a case-by-case basis, or do they fall under the overall umbrella of “no layoffs”?
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First, we should note that the sale isn’t expected to close for at least six months, and possibly a year. The process of how interns and temporary employees are employed is expected to continue. Temporary employees and internships, by their nature, are typically for a defined period of time. When that time ends, the employment is complete and not considered a layoff. Both types of positions will continue to be handled on a case-by-case basis as workloads require.
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7.
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I’m looking for information about operation supervisor positions in each district. I hear that GMP has no line supervisors in their shops, only working foremen. So with that being said, what will become of supervisors in our districts? The field technicians also have a similar question.
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This, again, is an issue that will have to be examined by the transition team. As we’ve said previously, the team will look carefully at district staffing. Both companies’ district operations staff provides excellent customer service, and the ultimate goal is to provide our collective customers with service that makes us proud. Mary Powell has been very clear that she wants the best of both companies to be merged into one even better unit.
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8.
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How will the new board of directors be selected?
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The board of the new merged company will be selected by the new shareholder of CVPS, Gaz Métro Limited Partnership (Gaz Métro), which will consider current members of the CVPS board for membership on the new board. CVPS board members may also be considered for membership on the boards of Northern New England Energy Corporation, GMP’s parent company, or Vermont Gas Systems Inc., which is a sister company.
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9.
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How will the integration team be selected?
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Mary Powell and Larry Reilly will lead the committee. Because there are very specific skill sets and significant time demands required, they will select other members of the team from their respective companies in the coming weeks. Once the process gets going, there will be a series of sub-teams to look at different parts of the business. These teams will include employees of both companies and will be focused on harnessing the best systems, processes and skill sets from each company and using the GMP/CVPS combination as an opportunity for even greater efficiency.
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10.
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Are there further details that we could see about the $144 million in cost savings? The last communication only provided one example. What are others?
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As we have said, we think GMP and Gaz Métro’s numbers add up. They have provided us with a high-level overview of where they expect to find savings, and their forecasts are realistic and based on real numbers. It is important to remember, however, that the cost savings analysis to date has been at a high-level and that the transition teams will be charged with identifying specific cost savings opportunities That said, in addition to the approximately $3 million in annual savings related to CVPS no longer being a New York Stock Exchange-traded company and decreased employment over time, we expect significant savings opportunities due to a reduction in the total number of officers, reduced regulatory and consulting costs, more efficient distribution of resources, equipment and facilities through rationalization of service territory, and improved purchasing leverage with vendors and service providers. And these savings would ramp up over time.
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