April 4, 2006
By DIANE LEVICK, Courant Staff Writer
Connecticut officials said they would
continue to press Lincoln National Corp. to maintain as many jobs
as possible in the state after the $7.5 billion merger it completed
Monday with North Carolina's Jefferson-Pilot Corp.
There were no assurances, though, how
many of Lincoln National's 800 jobs in downtown Hartford could be
saved. The company has promised to maintain a "significant"
presence in the city - but has not defined how many employees that
In response to a Courant inquiry, Gov.
M. Jodi Rell's office issued a statement Monday saying she has "directed
the state's Department of Economic and Community Development to
continue to meet with officials from Lincoln National with the goal
of maintaining a maximum number of jobs here in Connecticut."
The governor's office wouldn't elaborate,
and state economic development officials said Lincoln hasn't told
them how many jobs will be cut or committed to a minimum number
they would keep in the state.
James F. Abromaitis, economic development
commissioner, said the state has had "countless" discussions
with Lincoln about the merger and met in early March with Wes Thompson,
who head the company's Employer Markets area, and other company
"They assured us Lincoln would
always have a significant presence here in Hartford," Abromaitis
said. "Once the smoke clears, we want to make sure whatever
remains has the ability to grow here."
State and company officials said Lincoln
has not asked for financial incentives to keep jobs locally.
The state, however, sent Lincoln standard
materials showing what state assistance may generally be available
to corporations, said Barbara Fernandez, who heads the new Insurance
and Financial Services Business Development Office within Connecticut's
economic development department.
"They do not plan to pull up stakes
and leave" and "they know we stand ready to listen whenever
they have something to say," Fernandez said.
Lincoln spokesman Tom Johnson said
the company has been keeping Connecticut officials apprised of the
merger, and is "appreciative of their willingness to support
us and our business decisions as we work through the merger."
Rell's office last year negotiated
with MetLife to keep at least 1,310 jobs in Hartford for one year
after its July 1 purchase of Travelers Life & Annuity.
But that agreement allowed hundreds
of layoffs from Travelers, which had about 1,800 workers last spring,
and drew some criticism because of the short length of the commitment.
Hartford will also lose 2,000 jobs
when another insurance and financial services company - ING Group
- moves employees to Windsor. And other companies, such as St. Paul
Travelers and The Hartford Financial Services Group, have been laying
off some workers while creating new jobs in other areas of their
Now rumors abound that the Lincoln
National merger could mean hundreds of job cuts in Hartford because
life insurance operations will be based in Greensboro, N.C., instead
of Hartford as they are now. The company, however, said Friday it
wouldn't have estimates on job cuts for another 45 to 60 days, although
several high-ranking managers in Hartford already know their positions
are being eliminated.
Despite the uncertainty, Lincoln held
celebrations Monday of the completion of the merger. Lincoln employees
lined up for strawberry shortcake and ice cream in the cafeteria
at Hartford's MetroCenter, where their offices are located. In Philadelphia,
employees downed cake, crudites, fruit and cookies.
Lincoln's chairman and chief executive,
Jon Boscia,said in a statement Monday that the merged company "now
has superior size and scale, a comprehensive and balanced product
portfolio, greater distribution penetration, and geographic, market
and earnings diversity."
"In short, the company is extremely
well positioned for even greater growth in the financial services
marketplace," Boscia said.
Dennis Glass, former president and
chief executive of Jefferson-Pilot, is now president and chief operating
officer of Lincoln.
The merged company expects $180 million
pretax in annualized expense savings by the merger's third anniversary.
However, the company also expects about
$180 million in costs from integrating the two companies during
the next three years, and said Monday a substantial part of that
will be incurred in 2008.
Savings will come from greater efficiencies
in shares services, the consolidation of corporate functions, and
reductions in business unit costs, Lincoln said.
Meanwhile, rating agencies, as expected,
raised certain ratings of Lincoln and lowered them on Jefferson-Pilot
because of the merger.
Standard & Poor's, for instance,
raised its credit and financial strength ratings on Lincoln National
Life Insurance Co. and Lincoln Life and Annuity Co. of New York
to AA from AA- and removed them from CreditWatch. S&P lowered
Jefferson-Pilot ratings to AA from AAA.
Also Monday, Lincoln said it agreed
to buy shares of its common stock from Goldman, Sachs & Co.,
using an accelerated buyback program, for a total of $500 million.
Lincoln remains authorized to repurchase
as many as another $1.32 billion of its securities.
Reprinted with permission of the Hartford Courant.
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