Ver­i­zon dead­locked with unions gets up­per hand

The Pak Banker - - COMPANIES/BOSS -

Ver­i­zon Com­mu­ni­ca­tions Inc., dead­locked in la­bor talks over pen­sion ben­e­fits and health care that caused a strike in 2011, has gained bar­gain­ing power this time around af­ter shed­ding oper­a­tions that em­ploy older union­ized work­ers.

The Com­mu­ni­ca­tions Work­ers of Amer­ica and the In­ter­na­tional Brother­hood of Elec­tri­cal Work­ers, rep­re­sent­ing about 39,000 Ver­i­zon em­ploy­ees, are in the weak­est po­si­tion they've ever been. That's be­cause the phone gi­ant has re­fo­cused on wire­less, where it sees more growth and em­ploy­ees are nonunion­ized and typ­i­cally younger.

The la­bor dis­pute is the first since Ver­i­zon took full con­trol of Ver­i­zon Wire­less and agreed to buy AOL, two deals worth al­most $135 bil­lion that point to­ward a wire­less-cen­tric fu­ture. To­day's Ver­i­zon makes just 30 per­cent of rev­enue from its land­lines, and Chief Ex­ec­u­tive Of­fi­cer Low­ell McA­dam has be­gun a re­view of legacy tele­phone as­sets that could re­sult in the sale of ad­di­tional union-heavy oper­a­tions.

"Ver­i­zon is not the same com­pany it was when the idea of em­ploy­ment con­tracts were cen­ter stage," said Jeff Ka­gan, an in­de­pen­dent telecom­mu­ni­ca­tions an­a­lyst based in At­lanta. The par­ties, which had been ne­go­ti­at­ing since June 22, re­mained di­vided on is­sues that in­clude re­tire­ment se­cu­rity, health care and ef­forts to out­source call- cen­ter jobs when con­tracts with the CWA and the IBEW ex­pired Aug. 1.

Lead­ers of the two unions, Ver­i­zon's largest, said Sun­day they de­cided not to strike af­ter the dead­line passed, even though "the two sides re­main far apart." Both unions and the com­pany said Tues­day that the talks have stalled, and nei­ther gave in­di­ca­tion as to when they may re­sume. Em­ploy­ees in the North­east and Mid-At­lantic re­gions have con­tin­ued to work with­out a con­tract, but CWA mem­bers ap­proved a strike au­tho­riza­tion in July so CWA Pres­i­dent Chris Shel­ton can call a walk­out at any time.

Ver­i­zon is push­ing back against union de­mands such as in­creas­ing tu­ition as­sis­tance and elim­i­nat­ing em­ployee health-in­sur­ance con­tri­bu­tions. The con­tri­bu­tions were in­sti­tuted for the first time in the 2012 con­tract that was rat­i­fied more than a year af­ter the Au­gust 2011 strike -- the sec­ond walk­out in 11 years. The union­ized work­force has more than halved since the 2000 strike -- from more than 85,000 to 45,000 in 2011 and 39,000 to­day.

Ver­i­zon's ini­tial of­fer in June in­cluded a 2 per­cent wage in­crease in each of the first two years of a three-year con­tract, plus a lump-sum pay­ment in the fi­nal year.

The car­rier, which has a work­force of 178,000, is seek­ing to cut costs as U.S. house­holds give up their tra­di­tional home phones in fa­vor of mo­bile tech­nol­ogy. The New York­based com­pany said in a state­ment Fri­day that it wants to ne­go­ti­ate changes to health-care and pen­sion ben­e­fits that would make it more com­pet­i­tive. The car­rier would re­quire union em­ploy­ees to choose be­tween con­tin­u­ing to earn pen­sion ben­e­fits or re­ceiv­ing com­pany match­ing funds for an en­hanced 401(k) re­tire­ment sav­ings plan.

The two la­bor or­ga­ni­za­tions are rem­nants of a land­line legacy era, be­fore Bell At­lantic and GTE formed Ver­i­zon in 2000. This legacy telecom­mu­ni­ca­tions seg­ment transmits tele­phone calls via ei­ther cop­per land­lines or fiber op­tics.

In Fe­bru­ary, Ver­i­zon agreed to sell land­line as­sets across Cal­i­for­nia, Florida and Texas to Fron­tier Com­mu­ni­ca­tions Corp. for $10.5 bil­lion in cash. Union em­ploy­ees in those three states are cov­ered un­der a dif­fer­ent con­tract, and once the deal closes, Ver­i­zon will have re­duced its land­line ter­ri­tory to nine East Coast states and Washington, D.C.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.