TESTIMONY PRESENTED BY PHIL WHEELER, CEO PRESIDENT
June 7, 2005
Attorney N. Beth Cook
Connecticut Insurance Department
P.O. Box 816
Hartford, CT 06142
Subject: Testimony for June 7 Public Hearing – Travelers/Metlife Merger
Dear Attorney Cook:
Good afternoon. My name is Phil Wheeler. I am President of Citizen’s for Economic Opportunity (CEO), a statewide coalition of labor unions, community, faith based and citizen action groups working for corporate responsibility and health care. We are here today to oppose the merger of Travelers and Metlife.
CEO’s Executive Committee includes individuals that have been working in the area of corporate responsibility for many years. They have been with CEO since its founding and have consistently opposed and been outspoken about the damage done to employees and communities in such mega mergers as this - despite the Insurance Department’s unwillingness to grant us intervenor status in any of the mergers for which we have petitioned to intervene. The sincerity of this Department’s commitment to employees and the community is questionable at best given their consistent unwillingness to allow for the inclusion of citizen’s groups such as CEO.
For example, in one of the merger proceedings for which we requested intervenor status, CEO was allowed to submit specific questions to be asked of the merging parties. Unfortunately, this was futile because the Insurance Department gave the questions ahead of time to the companies enabling them to come with pre-prepared, written answers to the questions. We have repeatedly been denied the opportunity to stand up for our members and for the community at large.
CEO organized a number of policyholders to intervene in the 1999 merger of Blue Cross and Anthem. Despite this intervention and the policyholders’ concerns for the merger’s impact on themselves and the community, the Insurance Department approved the merger. CEO, joined by the State Attorney General and State Comptroller, pursued the case in court case resulting in a $41 million dollar settlement. The settlement resulted in the creation of the Universal Health Care Foundation whose mission is to expand access to health care for the uninsured and underinsured in the state of Connecticut.
Our specific concerns in the Metlife/Travelers merger include the overall loss of jobs and a minimal one year commitment to preserve some jobs by Metlife, the negative impact on the community as more and more employees are forced to leave businesses in Hartford, the harvesting by out of state corporations of Connecticut companies that have been the lifeblood of our cities and towns, the lack of any sort of transitional plans for outgoing employees in the form of job search assistance, retraining, career planning, adequate severance packages for terminated employees including benefits, and a potential decrease in charitable giving. The current business plan of the new corporation is woefully inadequate to provide any assurance that any of these concerns will be met. If this Department runs true to form, it will do little if anything to help.
The Department may see these lost jobs as just numbers, however, we contend that every job is one person’s livelihood, the lifeblood of his or her family, and community. Look around you at this great capital city and you will see the devastation already caused by our big business community sending more and more jobs out of state, overseas, and anywhere but here - where our community needs them.
Despite a “deal” to minimize the job loss in this merger, we have no reason to believe that such promises will be kept. We have witnessed over and over again the impact of mergers such as this where promises are made and broken over time as the public’s interest wanes. Travelers in its numerous mergers has often made commitments to minimize job losses—commitments it has rarely kept. Even when it is looking for handouts from the State, its promises have not been reliable. For instance, Travelers received $2,000,000 in 2001 from the CT Development Authority. At that time they reported a workforce of 6502 in the state. This number is a drop of nearly 800 jobs since 7300 in 1996 according to The Hartford Courant’s 100 Companies report. Their commitment to create 100 jobs with these funds has not been kept as of 2004. This issue is one about which CEO has fought tirelessly – state economic dollars virtually wasted despite the intention that jobs be created with such funds. It would be much better if we could count on the Department to share this commitment to the community.
When our new Governor took office, she promised a new day in Connecticut government. I ask this Department to match her words with deeds, to genuinely, fairly, and independently review this merger to see if it serves the interests of our community. If you actually do that, you will either deny this merger, or include a series of strong restrictions which protect the public that this Department claims to serve.
Sincerely,
Phil Wheeler
President
TESTIMONY PRESENTED BY BEVERLEY BRAKEMAN, CEO DIRECTOR
June 3, 2005
Attorney N. Beth Cook
Connecticut Insurance Department
P.O. Box 816
Hartford, CT 06142
Fax: 860-566-7410
Subject: Testimony for June 7 Public Hearing – Travelers/Metlife Merger
Dear Attorney Cook:
Good afternoon. My name is Beverley Brakeman. I am the Director for CEO. Citizen’s for Economic Opportunity (CEO) is a statewide coalition of labor unions, community, faith based and citizen action groups working for corporate responsibility and health care. Originally formed in 1995 to combat harmful mega-mergers in the health care industry, CEO is now the vehicle for a growing Corporate Responsibility and Health Care Campaign that is breaking new ground on some of today’s most challenging workplace and health care issues. Through our exciting campaign, CEO is refuting the “better business climate” model for economic growth – which relies on reducing wages and health care benefits and weakening workplace protections – and refocusing the debate toward the long-term well-being of CT employees and their communities.
CEO’s experience in the field of corporate responsibility is vast. In 1995, CEO members directly intervened in health insurance company merger proceedings to demand that needs of consumers, employees and the community were not left out of the equation. In 1998, coalition members began an effort with local leaders in Hartford to craft “community standards” during the initial development of the Adriaen’s Landing development. This effort laid the groundwork for another victory in the city of New Britain where two living wage/corporate responsibility ordinances passed the City Council. In 2003, CEO played a lead role in a significant victory, challenging a $46 million subsidy proposal for a Wal-Mart distribution center expected to create low-paying jobs with scarce benefits. Additionally, CEO has continued to directly challenge taxpayer subsidies through an aggressive campaign of research, education and mobilization of our members organizing to win fiscally sound economic development policies that protect low- and moderate-income workers while enhancing our communities as a whole
As has been stated, we oppose this merger and ask that this Department review the merger proceedings carefully and if they do approve it, we ask that they consider the following recommendations:
1. Minimal job loss. We understand the number agreed upon is 490, but we think this is far too many jobs to be lost within an ever dwindling Connecticut workforce
2. A comprehensive business plan including timelines that demonstrates how Metlife will be committed to future job growth in Hartford
3. A city-wide job training program designed to educate, mentor and assist young people with interest in working in the financial sector
4. Appropriate services to terminated employees including job search assistance, retraining, career planning, counseling and support, and relocation assistance if necessary;
5. Adequate severance packages that include benefits and address other financial issues confronted by employees including childcare.
6. A commitment to increased charitable giving that is informed and designed to support the city of Hartford and its residents
7. Annual reporting to the Insurance Department and any Intervenors on compliance with any agreements made for this merger
Thank you for your consideration.
Sincerely,
Beverley Brakeman
Director