Columbia Gas Systems cuts salaries 10%, freezes others

July 02, 1991|By Kim Clark

Columbia Gas Systems, struggling to avoid bankruptcy, has cut salaried workers' pay by up to 10 percent and frozen the wages of hourly workers.

William McLaughlin, company spokesman, said the freezes and cuts, which started yesterday, have affected all 8,000 of Columbia's non-union employees, including some of the 80 employees of Columbia Gas of Maryland Inc.

Yesterday's move will save the company $6 million, Mr. McLaughlin said. Columbia said it would negotiate similar wage freezes and cuts with the unions representing its 3,000 organized workers.

The Maryland division provides natural gas to the Cumberland and Hagerstown region and has about $25 million in annual revenues, Mr. McLaughlin said.

Late last month, Wilmington, Del.-based Columbia, one of the nation's biggest suppliers of natural gas, shocked its customers and investors by announcing that it would file for bankruptcy unless its banks and suppliers agreed to lower prices for gas.

The company explained that a recent free fall in natural gas prices may cause it to lose $1 billion over the next 10 years.

Since then credit-rating companies have lowered their evaluations of Columbia's bonds and notes. In the last two weeks, the company has missed two debt payments totaling $25 million. Columbia faces another loan deadline July 8.

Though Columbia's pipeline provides natural gas to 15 states, including Maryland, local utility executives said that homeowners who heat with gas will probably not be affected by Columbia's financial difficulties.

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