State To Press Lincoln National On Jobs In City

Merger With Jefferson-Pilot Completed

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 means.

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 officials.

"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 business.

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.