Topeka mayoral candidate Spencer Duncan doesn’t buy last month’s assertion by officials with the Westar Energy and Great Plains Energy electrical utilities that Topeka won’t lose any jobs as a result of a proposed “merger of equals” between the companies.
If the proposal goes through, “Topeka must once again brace for a loss of jobs,” Duncan wrote on his campaign website on July 10. The two companies earlier that day had announced the proposed merger, which must be approved by the Kansas Corporation Commission to take effect.
But a Westar spokeswoman responded Thursday that the company doesn’t plan to move jobs away from Topeka, while Michelle De La Isla — a Westar employee who is Duncan’s mayoral election opponent — suggested he was focusing on a matter that’s unrelated to the mayoral campaign.
“We have no power to control private entities, and it’s disheartening that the focus is being kept on the transaction rather than the benefit that our constituents are going to receive,” she said.
Duncan stressed Tuesday that when officials with Westar and GPE pledged July 10 that Topeka would see no job losses for five years after the merger, they made no promises beyond that — and indicated they plan to maintain the company’s headquarters in Kansas City, Mo.
As a person who follows such mergers, Duncan said, it seems obvious to him that when the five years has ended, the merged entity will move some Topeka jobs to its headquarters at Kansas City, Mo.
Duncan said he reached that conclusion in part by reading between the lines.
“But I also think that, in their own way, they’re telling us what their plan is,” he said.
That opinion was contested Thursday by Westar spokeswoman Gina Penzig, who said the new merger plan came in response to the KCC’s refusal in April to approve GPE’s purchase of Westar.
The KCC, in rejecting the initial merger plan, made it clear that regulators and others wanted more definition of the commitments that would be made, including the merged company’s pledge to maintain an operations headquarters in downtown Topeka, Penzig said in an email.
“People wanted a clear picture of what that meant,” she said. “The terms of 500 employees and five years establish minimum commitments. We don’t have plans to move employees from Topeka. In fact, the main offices for both companies are full, and Topeka real estate is more affordable.”
Great Plains CEO Terry Bassham in unveiling the new merger plan said it would bring no job losses. Instead, the company would use attrition and voluntary severance to handle job overlap that occurs during a merger, he said.
Westar would own 52.5 percent of the combined company, with GPE owning 47.5 percent.
Corporate headquarters would be in Kansas City, Mo., but as part of the deal, Topeka would host an operating headquarters with a commitment to maintaining 500 positions there for five years, Westar CEO Mark Ruelle said in unveiling the plan.
Those jobs would be “headquarters-type” positions, such as engineers and top administrators, he said. Under the previous deal, there were concerns the companies would put lower-paying positions in downtown Topeka, hurting the company’s economic impact.
De La Isla, a Topeka city councilwoman who is Westar’s diversity and inclusion representative, acknowledged Thursday that the proposed merger would impact Topeka’s economic development but questioned its relevance to the mayoral campaign, saying the merger isn’t something a mayor could control.
“It concerns me that we’re starting to have a pattern of putting our focal points on things that are extraneous to the campaign instead of focusing on current city of Topeka policy issues,” she said.
De La Isla added that the proposed arrangement would provide benefits in that Westar would merge with GPE, a company that is its neighbor and has a track record of being an incredible corporate steward of small businesses and nonprofit organizations.
“We have to remember the commitment we’re getting is not the same commitment we would have gotten if we’d been purchased by someone else,” she said.
Contact reporter Tim Hrenchir at (785) 295-1184 or @timhrenchir on Twitter.