Acquisition Completed; Insurer Complies So Far On Local Hiring
July 2, 2005
By DIANE LEVICK, Courant Staff Writer
Connecticut's insurance commissioner said Friday she has resolved confusion
over MetLife's job commitment in acquiring Travelers Life & Annuity,
while the attorney general criticized MetLife for "playing games" on
the promise at a hearing in June.
Despite the differing interpretations, MetLife Inc. Friday completed an
$11.8 billion purchase of Hartford-based Travelers and flew one of its MetLife
Snoopy blimps over Hartford to celebrate.
About 110 layoffs were slated to take
effect Friday, though the company refused to reconfirm the number. Hundreds
more Travelers workers in "transitional" jobs
with MetLife will lose their jobs in the coming year and beyond.
In an agreement with Gov. M. Jodi Rell, MetLife had promised to have at
least 1,310 jobs in Hartford for a year after the closing. The disagreement
that surfaced Thursday was whether MetLife agreed to have current Travelers
employees fill all of the 1,310 positions for the year.
Insurance Commissioner Susan Cogswell and Attorney General Richard Blumenthal
believe that's exactly what MetLife promised. And Cogswell said that based
on the latest employment numbers, MetLife is complying with the agreement
But the two state officials Friday said it may be acceptable - especially
if there is attrition - for MetLife to fill some of the jobs with other people
to meet the quota if it cannot find enough Travelers people who are suitable
for the positions and want them. The mix of jobs MetLife will have in Hartford
differs from what Travelers has had here.
Cogswell Friday issued a statement affirming
her department's order Thursday, which approved the Travelers sale. The
decision holds MetLife to a promise to maintain 1,310 jobs in Hartford "from
the current Travelers employee population for one year after closing."
MetLife, though, never used the language "from the current Travelers
employee population" in its commitment letter to regulators, though
it expected most of the jobs would be filled by Travelers people.
"They understand at this point what was in the order," Cogswell
said in an interview, after talking with MetLife officials Thursday night
and Friday. "They have fulfilled the obligation to this point."
She said about 1,100 former Travelers employees had accepted ongoing jobs
with MetLife as of Friday, and 400 others accepted temporary jobs of varying
lengths - not all lasting a year.
MetLife, Cogswell said in a written statement,
has confirmed it will bring additional positions to Hartford to satisfy
the 1,310 promise. "These
new jobs will be available to former Travelers employees and others who desire
to work in Hartford and who are qualified to fill them," she said.
Cogswell said her department will closely monitor MetLife on fulfilling
its commitment, and encourage the company to offer permanent jobs to the
transitional workers as attrition and vacancies occur.
"Realistically, at the end of the day, they may not be able to fill
all 1,310 jobs with former Travelers employees," Cogswell said in an
interview. "We'll have to analyze the situation at the time."
Blumenthal Friday reviewed a transcript
of MetLife testimony from the June 7 hearing on the deal and said, "They should have been less opaque and
more forthright in their testimony" on the jobs promise.
William J. Wheeler, a MetLife executive
vice president, responded initially "that
is correct" when regulators asked at the hearing to confirm an agreement
to "maintain 1,310 jobs from the current Travelers population for one
year after closing."
But then Wheeler's team conferred with
him, the transcript shows, he asked to clarify the number, and then he
said, "Just to be clear, we've committed
to maintain 1,310 jobs in (pause) in Hartford." He did not use the words "from
the current Travelers population." Nevertheless, the department's attorney
then responded "OK."
"He's playing games," Blumenthal said Friday, reviewing the transcript. "He's
seeking to clarify the record in his view without calling attention" to
the differences between the way he and the department stated the commitment.
Like Cogswell, though, Blumenthal said
MetLife may need to be granted leeway in fulfilling its commitment. "They should try to fill them with Travelers
people. They have an obligation to fill them with Travelers people," he
said. "But if there are simply insufficient numbers of Travelers people,
we want to keep the jobs here anyway."
MetLife spokesman John Calagna would not
comment on Blumenthal's criticism. In a written statement, Calagna said, "The
commissioner's [written] statement today speaks for itself, and we have
no other comment except to say we certainly agree with what it says."
"Now that the acquisition has been approved, we look forward to our
first full day of business in Hartford as MetLife next Tuesday," Calagna
Rell's office did not respond to multiple requests Friday for comment on the
Meanwhile, MetLife rolled out the welcome mat Friday for Travelers employees
with senior company officials greeting them upon arrival, a buffet breakfast,
and a MetLife gift bag with notebook and pen.
To buy Travelers, MetLife paid $10.8 billion in cash to Citigroup and about
22.4 million shares of MetLife common stock valued at roughly $1 billion.
The acquisition is MetLife's largest,
and boosts its presence in annuity, retirement and savings plans, and international
markets. The deal will provide a "modest" benefit to earnings
in the second half of this year, MetLife said
Reprinted with permission of the Hartford Courant.
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