TIDMNG.
RNS Number : 3712A
National Grid PLC
31 January 2011
31 January 2011
National Grid plc
Change of Executive Directors' Responsibilities, Restructuring
and $200m US Efficiency Programme
National Grid plc today announces a change of group executive
responsibilities and a major restructuring of its US business to
deliver more efficiently and cost-effectively its commitments to
its customers and regulators.
National Grid is committed to increasing returns from its US
businesses. With effect from April 2011, National Grid is evolving
from its current global lines of business model to a regional model
supported by global functions, with a tighter jurisdictional and
local focus to drive customer value. The restructuring will focus
the responsibility for all US businesses under Tom King in the new
position of Executive Director and President, US from the beginning
of April.
In addition to the appointment of Tom King, Nick Winser will
assume the position of Executive Director, UK, responsible for all
UK businesses, and responsibility for the UK Gas Distribution
business will transfer to Nick from 1 March 2011. As a result, Mark
Fairbairn, currently Executive Director, Gas Distribution, will
step down from the Board and leave National Grid at the end of
March 2011.
National Grid's existing organisational model is delivering
significant cost savings in global functions such as procurement
and IS. Following the restructuring we will retain this ability to
exploit the benefits of our scale and to standardise processes
across our businesses to improve operational and service
efficiency.
In the US we are now evolving the structure to incorporate a
local regional focus with the appointment of regional presidents in
New York, Massachusetts, Rhode Island, Long Island and a president
responsible for federally regulated businesses. Each president will
be responsible for delivering safe, efficient, reliable and cost
effective services for customers and regulators in their local
jurisdictions.
This evolution of the US structure will be combined with a
targeted reduction in US operating costs of around $200m (GBP125m)
per annum. This will be achieved primarily through the reduction of
around 1200 positions across the US employee base representing
about 7% of National Grid's direct US workforce. These are expected
to be reductions in management and administrative positions and,
where feasible, will be achieved through voluntary redundancy.
Senior management appointments into the new US structure have
already been made with a 26% reduction in the number of roles. The
remaining appointments are expected to be completed by August 2011,
with the targeted savings run rate of $200m p.a. achieved by the
end of the 2011/12 financial year. We estimate that the cost of
achieving these efficiency savings will be around $100 million,
which we expect to be incurred primarily in 2011/12.
Steve Holliday, Chief Executive, said:
"We are committed to improving our US performance. The world has
changed over the past four years and our customers and regulators
are looking for something more closely attuned to their local
needs. We are today announcing a series of organisational changes
under a new position of Executive Director and President, US to
sharpen the responsibility for delivering this. Since August 2007,
our rate filings have increased revenues by $388m and we will
continue to file where we do not have the rate plan features we
require or where there is a mismatch between costs and revenues.
But improving our US performance is not just about revenue - it
requires us to increase our efficiency and productivity. Today's
announcement is a significant step on that journey.
I'd like to thank Mark for his significant contribution to
National Grid during his 21 years with the company and 4 years on
the Board. He has been a valued colleague during a period of
significant change for the company and we wish him all the best for
the future."
CONTACTS
National Grid:
Investors
+44 (0) 79 0151 1322
David Rees +44 (0) 20 7004 3170 (m)
George Laskaris +1 718 403 2526 +1 917 375 0989 (m)
Andy Mead +44 (0) 20 7004 3166 +44 (0) 77 5289 0787
(m)
Michael Smart +44 (0) 20 7004 3214 +44 (0) 77 6729 8988
(m)
Iwan Hughes +44 (0) 20 7004 3169 +44 (0) 79 0040 5898
(m)
Media
+44 (0) 78 3635 7173
Clive Hawkins +44 (0) 20 7004 3147 (m)
Debbie Taylor +44 (0)20 7004 3148 +44 (0)7787 568375 (m)
Brunswick
Tom Burns
Tom Batchelar +44 (0) 20 7404 5959
An investor webinar hosted by Steve Holliday, Andrew Bonfield,
Tom King and Nick Winser to discuss the Restructuring and US
Efficiency Programme will be held on Tuesday 1st February at
10.30am (UK time).
To view and listen live to the webinar please use this link:
6b15827f40eb31e59bf68412bfe9&portal_id=26e72920ca2c28342e53e63e51efe3ad.
You can also dial in using the following numbers (please note -
you can only participate in the Question & Answer section of
the webinar via conference call):
UK: +44 (0)20 7138 0824
US: +1 212 444 0481
Please quote confirmation number 3421970 when dialling into the
conference
If you cannot make the webinar a replay facility will be
available shortly after the webinar has finished by following the
link above or alternatively at
.nationalgrid.com/corporate/Investor+Relations/ResultsandPresentations/.
A Newswire conference call has been arranged for 2.15pm (UK
time) and details are:
UK Free Call: 0800 073 1808
UK Standard International: +44 (0) 1452 541 077
USA Free Call: 1 866 223 0481
Conference ID to all participants: 41075646
Biographies:
Nick Winser, Executive Director:
Nick Winser joined the Board in April 2003 as Executive Director
responsible for Transmission. He was previously Chief Operating
Officer of the US transmission business for National Grid Transco
plc. He joined National Grid Company plc in 1993, becoming Director
of Engineering in 2001. Prior to this, he had been with Powergen
since 1991 as principal negotiator on commercial matters, having
joined the Central Electricity Generating Board in 1983 where he
served in a variety of technical engineering roles. He is a
Non-executive Director of Kier Group PLC and co-Chair of the Energy
Research Partnership.
Tom King, Executive Director:
Tom King was appointed to the Board as Executive Director in
August 2007 with responsibility for Electricity Distribution &
Generation operations. Tom was President of PG&E Corporation
and Chairman and CEO of Pacific Gas and Electric Company from 2003
to 2007. Before that, he served as Senior Vice President of
PG&E Corporation, and as President of PG&E National Energy
Group having joined PG&E Gas Transmission as President in 1998.
Prior to PG&E, he served as President and Chief Operating
Officer of Kinder Morgan Energy Partners and served for nine years
in officer positions in Enron's inter-state pipeline
businesses.
CAUTIONARY STATEMENT
This announcement contains certain statements that are neither
reported financial results nor other historical information. These
statements are forward-looking statements within the meaning of
Section 27A of the US Securities Act, and Section 21E of the US
Securities Exchange Act of 1934. These statements include
information with respect to National Grid's financial condition,
results of operations and businesses, strategy, plans and
objectives. Words such as "anticipates", "expects", "intends",
"plans", "believes", "seeks", "estimates", "targets", "may",
"will", "continue", "project" and similar expressions, as well as
statements in the future tense, identify forward-looking
statements. These forward-looking statements are not guarantees of
National Grid's future performance and are subject to assumptions,
risks and uncertainties that could cause actual future results to
differ materially from those expressed in or implied by such
forward-looking statements. Many of these assumptions, risks and
uncertainties relate to factors that are beyond National Grid's
ability to control or estimate precisely, such as changes in laws
or regulations and decisions by governmental bodies or regulators;
breaches of, or changes in, environmental, climate change and
health and safety laws or regulations; network failure or
interruption, the inability to carry out critical non-network
operations and damage to infrastructure; performance against
regulatory targets and standards, including delivery of costs and
efficiency savings; customers and counterparties failing to perform
their obligations; and unseasonable weather affecting energy
demands. Other factors that could cause actual results to differ
materially from those described in this announcement include
fluctuations in exchange rates, interest rates, commodity price
indices and settlement of hedging arrangements; restrictions in
National Grid's borrowing and debt arrangements; changes to credit
ratings of National Grid and its subsidiaries; adverse changes and
volatility in the global credit markets; National Grid's ability to
access capital markets and other sources of credit in a timely
manner and on acceptable terms; deflation or inflation; the
seasonality of National Grid's businesses; the future funding
requirements of National Grid's pension schemes and other
post-retirement benefit schemes, and the regulatory treatment of
pension costs; the loss of key personnel or the inability to
attract, train or retain qualified personnel; new or revised
accounting standards, rules and interpretations, including changes
of law and accounting standards that may affect National Grid's
effective rate of tax; incorrect assumptions or conclusions
underpinning business development activity and any restructuring or
reorganisation of National Grid and its subsidiaries, and any
unforeseen significant
liabilities or other unanticipated or unintended effects of such
activities, restructuring or reorganisation and the performance of
National Grid's subsidiaries. In addition National Grid's
reputation may be harmed if consumers of energy suffer a disruption
to their supply. For a more detailed description of some of these
assumptions, risks and uncertainties, together with any other risk
factors, please see National Grid's filings with and submissions to
the US Securities and Exchange Commission (and in particular the
Risk Factors and Operating and Financial Review sections in its
most recent Annual Report on Form 20-F). The effects of these
factors are difficult to predict. New factors emerge from time to
time and National Grid cannot assess the potential impact of any
such factor on its activities or the extent to which any factor, or
combination of factors, may cause results to differ materially from
those contained in any forward-looking statement. Except as may be
required by law or regulation, National Grid undertakes no
obligation to update any of its forward-looking statements, which
speak only as of the date of this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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