President Trump pushed to oust TVA CEO: If you outsource jobs, 'you're fired'
President Donald Trump took the first steps of a major shakeup of Tennessee Valley Authority leadership over the issue of outsourcing jobs, a move that could ultimately cost CEO Jeff Lyash his job.
Trump signed an executive order forbidding federal agencies from outsourcing jobs overseas, a move that was a direct result of TVA’s decision to outsource at least 120 information technology jobs to three software development contractors headquartered outside of the United States.
In signing the order, Trump pushed for the TVA Board of Directors to remove Lyash. He called the CEO’s salary — the highest of any federal employee — a disgrace.
“So, let this serve as a warning to any federally appointed board. If you betray American workers, then you will hear two simple words, ‘you're fired. You're fired,’” Trump said.
In addition to his comments about Lyash, Trump also said he had removed the TVA board chairman and another board member.
Each of the nine TVA board members are appointed by the president and are Senate-approved. Trump does not have the authority to fire TVA's CEO; that is a board decision.
Chairman James "Skip" Thompson — a Trump appointee — and board member Richard Howorth — appointed by President Barack Obama — have been fired, Trump said.
“If the TVA does not move swiftly to reverse their decision to rehire their workers then more board members will be removed. We have the absolute right to remove board members, and the board makes that decision," he said. "I don't make the decision.”
The board was already down two members and after Monday only has five active members. Trump nominated former Tennessee Speaker of the House Beth Harwell and East Tennessee State University President Brian Noland to the board in January. Neither has been approved by the Senate.
Trump indicated that Lyash had called and offered a “very strong willingness to reverse course.” However, when asked by Knox News if Lyash's comments indicated TVA would take a different direction on the outsourcing, a TVA spokesperson declined to elaborate.
TVA gave formal notice to 62 IT workers in Chattanooga and Knoxville that their jobs are ending in 90 days in June as the nation’s largest public utility continues its move of outsourcing more data and programming work, according to the Chattanooga Times Free Press.
Since TVA announced last year it would outsource some of the computer programming work being done at its Chattanooga computer center and its headquarters in Knoxville, nearly half of the 120 jobs being cut have already been phased out as workers found other jobs at TVA or left the agency, the newspaper reported.
The parent company of each of the three software development contractors being hired by TVA are headquartered outside of the United States, the Times Free Press reports.
About the executive order
The president’s order will require all federal agencies to complete an internal audit and assess whether they are in compliance with the requirement that only U.S. citizens and nationals are appointed to the competitive service.
The order, simply put, will prevent federal agencies from replacing U.S. labor with cheaper, foreign labor.
The order explicitly lists TVA’s decision to outsource IT jobs as the reason for the action. TVA’s decision could cause more than 200 highly skilled American tech workers in Tennessee to lose their jobs to low-wage, foreign workers hired on temporary work visas, according to a release from the White House. TVA’s decision is also expected to cost the local economy tens of millions of dollars over the next five years, the release said.
"We understand and support today’s Executive Order," TVA spokesperson Jim Hopson said in a statement to Knox News. "We want to ensure that U.S. employees have good opportunities through our employment and supply chain practices. We look forward to working with the White House, continuing a dialogue and supporting future policies in this direction."
The local chapter of the International Federation of Professional and Technical Engineers – the union representing TVA workers – applauded the president’s actions.
“This executive order will finally force the TVA to do the right thing and abandon its misguided effort to discard hundreds of workers who have dedicated their careers to TVA and the Tennessee Valley community,” Gay Henson, president of the local group, said.
Burchett at executive order signing
U.S. Rep. Tim Burchett, R-Tenn., was the lone member of Congress present when Trump signed the executive order. He was joined by a host of TVA employees, Vice President Mike Pence and others in the White House's Cabinet Room.
After the signing, he praised the president’s actions and told Knox News Trump was standing up for the American worker.
“He’s standing up for the American worker. He said he was going to do it ... the president’s fed up and this is one president you just don’t mess around with because he will surprise you,” he said.
Burchett acknowledged that a future president could rescind the executive order and that it is the board’s decision regarding Lyash, not the president’s, but he said the message was sent nonetheless.
“I think it matters, but I think the president dinged them pretty hard,” he said.
Burchett has a history of being outspoken against TVA practices. His first bill was an effort to make TVA Board of Directors meetings open to the public and last year, he and U.S. Rep. Steve Cohen, D-Tenn., wrote then-TVA CEO Bill Johnson and demanded answers about TVA’s announcement ratepayers may have to pay for the misdeeds of the contractor used for coal ash cleanup work at its Kingston plant after the nation’s worst coal ash spill.
Trump continues to knock TVA CEO pay
Trump's comments about Lyash follow similar barbs he made in an April media briefing where he was discussing a possible infrastructure bill (that has yet to pass Congress). Lyash’s predecessor, Bill Johnson, made $8.1 million in total compensation and was the highest paid federal employee before he left.
Lyash’s compensation won’t reach that high — he began with a base pay of $920,000 — but his contract comes with millions of additional incentives baked in. Monday, Trump said the CEO's pay should not be more than $500,000.
“But he gets $8 million a year, and I can think of about almost 100% of the people I know would take that job,” Trump said. “He gets $8 million a year so that was just a succession of deep swamp things happening and it's a disgrace.
In April, Trump called the CEO's pay "ridiculous."
When asked about adjusting the TVA leader's pay in the pending infrastructure bill, the president said he'd want to reduce it "by a lot."
"It has to be the greatest job in the history of government, almost — certainly if you're into money," said Trump.
TVA pushed back hard after Trump’s comments, telling Knox News Lyash's pay is low compared to many of his industry peers and that the utility pays its leader from electricity sales revenue, not tax dollars.
"TVA’s mission of service requires that we attract and retain highly skilled individuals in a specialized industry," the statement says. "Although a federal corporation, TVA receives no federal funding for its operations."
"All funds are generated through wholesale sale of electricity," the statement continued. "TVA employees do not receive federal health or retirement benefits. Benchmarking other utility peers who are competing for the same talent is the only method available to create a competitive compensation system."
All of this comes as TVA continues to be embroiled in controversy over its handling of the 2008 Kingston coal ash spill.
Hundreds of disaster relief workers who cleaned up the spill at Tennessee Valley Authority's Kingston Fossil Plant in Roane County in December 2008 allege they were poisoned by exposure to coal ash dust without adequate protection. A Knox News ongoing tally from public records shows 50 cleanup workers have died from ailments they claim are linked to their exposure.
Lamar Alexander defends TVA
U.S. Sen. Lamar Alexander, R-Tenn., responded to Trump's executive order Monday
“TVA may have shown poor judgment hiring foreign companies during a pandemic, but, on most counts, it does a very good job of producing large amounts of low-cost, reliable electricity. Residential electric rates are among the 25 percent lowest in the country, and industrial rates are among the lowest 10 percent. TVA’s debt is the lowest in 30 years, its pension fund is stronger and TVA leads the country in new nuclear power plants. According to TVA, the annual total compensation of TVA’s CEO is in the bottom fourth of what the CEOs of other big utilities earn and is set strictly according to requirements of federal law. TVA receives no federal tax dollars,” the Alexander statement said.
Source: Knoxville News Sentinel, by Tyler Whetstone
The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org
Published August 6, 2020