- 03 Aug 2020 | 22:17 UTC
- New York
- AuthorEsther Whieldon S&P Global Market Intelligence
- EditorJeffrey Ryser
- CommodityElectric Power
- TopicThe Trump Administration
President points to outsourcing of IT jobs
Salary of TVA president and CEO also under scrutiny
New York — President Donald Trump fired the chairman of the Tennessee Valley Authority and one of its board members over the authority's decision to outsource a portion of its workforce to foreign workers, according to White House press pool reports.
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In announcing the firing of Chairman James "Skip" Thompson and board member Richard Howorth, Trump warned that "if the TVA does not move swiftly to reverse their decision to rehire their workers then more board members will be removed," according to the pool report. The Associated Press reported that Trump said he had learned of TVA's plans from a Fox News prime time television advertisement by U.S. Tech Workers, a nonprofit that aims to limit visas given to foreign technology workers.
Trump nominated and the Senate confirmed Thompson to the TVA board in 2017; Howorth's term on the board formally ended in May. Thompson was an Alabama bank executive and had served on the board of Decatur Utilities. Howorth, who was first appointed to the TVA board in 2011 by President Barack Obama, was a bookstore owner and former mayor of Oxford, Mississippi, which operates its own electric utility.
Trump made the announcement on August 3, a few days after US weekly unemployment claims climbed for the second week in a row to 1.43 million in the week that ended July 25 and the damaged US economy struggled to recover amid a resurgence of COVID-19 cases.
In a news release, the White House said the TVA was planning to outsource 20% of its workforce to companies based in foreign countries. "Outsourcing hundreds of workers is especially detrimental in the middle of a pandemic, which has already cost millions of Americans their jobs," the news release said.
But later in the White House event, Trump also suggested the TVA's president and CEO, Jeff Lyash, had just then "indicated a very strong willingness to reverse course." Just before that, Trump complained that Lyash's salary was excessive.
After suggesting that Lyash had indicated the TVA would change its mind on outsourcing workers, Trump added, "now, maybe he'll take a major cut in salary," according to the pool report.
IT outsourcing
Earlier in the year, the TVA had signaled it was looking to outsource about 20% of its information technology workforce, and in June, it notified 62 employees they were going to be laid off. The TVA said it was going to outsource some software development work to companies headquartered outside the U.S.
Lyash was appointed the TVA's CEO by the board in early 2019. Lyash had previously been CEO of Ontario Power Generation Inc. Prior to that, he held executive positions at Duke Energy and, before its acquisition by Duke, Progress Energy.
The president made the announcement about the TVA board members the same day he signed an executive order directing federal agencies to perform an internal audit to assess whether they are in compliance with the requirement that only U.S. citizens and nationals are appointed to the competitive services, among other things.
The TVA said it supported Trump's executive order. "We want to ensure that U.S. employees have good opportunities through our employment and supply chain practices. We look forward to working with the White House, continuing a dialogue and supporting future policies in this direction," TVA spokesperson Scott Gureck said in an emailed statement.
The authority went on to say that all TVA employees are U.S.-based citizens and that all jobs related to the TVA's information technology department must be performed in the US by individuals with legal permission to work in the country.
