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In Abrupt Reversal, TVA Scraps Outsourcing Plans

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Tennessee Valley Authority
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The Tennessee Valley Authority has abandoned its plans to outsource information technology work to outside firms after President Trump put the agency’s leaders in his crosshairs this week.

The about-face was announced Thursday by TVA CEO Jeff Lyash, after a meeting with Trump Chief of Staff Mark Meadows and White House attorney Pat Cipollone. Lyash was one of the executives Trump targeted in remarks he made Monday after firing TVA board chair “Skip” Thompson and board member Richard Howorth. Thompson was appointed by Trump in 2018; Howorth was an Obama appointee.

Trump also put Lyash on notice, threatening the executive’s job if the outsourcing decision wasn’t changed. He also criticized Lyash’s $8 million salary and benefits package, calling it “ridiculous.”

TVA, the nation’s largest federally-chartered power company, said the choice to lay off more than 60 IT workers in Chattanooga and Knoxville was a cost-saving measure. Critics pointed out three of the proposed contractors that would assume the work were based outside the United States. TVA said the work had to be done within the U.S. by workers legally cleared to work in the country. But Trump seized on the optics to charge TVA with betraying American workers.

The rebuke and the firings had the desired effect. Lyash said Thursday the agency would immediately reverse course and order a review of all its contracts to ensure they comply with the president’s recently-signed executive order limiting how federal agencies can work with foreign-born employees under H-1B visas.

“We were wrong in not fully understanding the impact on our employees, especially during the pandemic,” Lyash said after the White House meeting. “We are taking immediate actions to address this situation. TVA fully understands and supports the Administration’s commitment to preserving and growing American jobs.”

TVA’s reversal was cheered by U.S. Tech Workers, an anti-H1B nonprofit group that says it represents American tech workers’ interests. The group recently took out TV ads urging the president to intervene in the TVA outsourcing situation.

Speaking at an Ohio campaign rally Thursday before TVA publicly announced its reversal, Trump invoked his reality TV catchphrase, “You’re fired,” and told the crowd firings would continue unless the IT layoffs were undone.

Trump’s firing of Thompson and Howorth drew at least one thumbs-up from across the aisle. James Mackler, running for the Democratic nomination for U.S. Senate, said “Outsourcing jobs to private contracting companies…during a pandemic that has already taken more than 50 million American jobs, is wrong and undermines the mission of TVA. I support the president’s decision to do something about it.”