Verizon Unions Strike as Contract Talks Fail

“Even at the 11th hour, as contracts were set to expire, Verizon continued to seek to strip away 50 years of collective bargaining gains for middle class workers and their families,” the Communications Workers of America said in a statement.

The strike, which began when the old contract expired yesterday at midnight, may delay service calls and disrupt installations for telephone and Internet service. The company has trained more than 40,000 managers and contractors to step into the roles of union workers, said Richard Young, a Verizon spokesman.

“We are confident that we have the talent and resources in place to meet the needs and demands of our customers,” Mark Reed, Verizon’s executive vice president of human resources, said in a statement.

The New York-based company began negotiating with more than 45,000 members of the Communications Workers of America and the International Brotherhood of Electrical Workers in July over terms of a contract to replace one that expired yesterday. A proposal to change health-care benefits is one of the issues to be resolved, with the company and unions remaining sharply divided.

Sticking Point

Verizon wants workers to contribute more for health insurance, including paying monthly premiums for the first time, while the unions say their members can’t accept the financial burden, given the current economy.

“We’re looking to bring our union more in line with what the rest of the workers pay,” Young said last week in an interview, adding that about 130,000 of the company’s approximately 196,000 employees already contribute to health- insurance premiums. The company also wants to increase co- payments and deductibles for union workers.

Ron Collins, the CWA’s chief of staff, last month called the proposal a “radical change.” Verizon is a profitable company that pays senior executives well and isn’t in danger of going out of business, said Bob Master, a legislative and political director for the CWA.

“We remain ready to meet with Verizon to work out a fair agreement,” the IBEW said in a statement calling the strike. “But at this point, we had no choice.”

The CWA said talks between the unions and the company will continue, and that workers are prepared to “continue the fight” until the two sides reach an agreement.

Wireline Decline

Lowell McAdam, who took over as CEO from Ivan Seidenberg on Aug. 1, had run Verizon Wireless for more than three years before becoming president of Verizon Communications last year. He said he wants to bring the competitive culture of the mobile- phone business to the parent company. In an interview last month, McAdam, 57, said changing the union contract would ultimately benefit workers because lower costs would help the business compete.

“If we do that, I think the union will have a much stronger future because the company will be stronger,” he said.

Verizon’s revenue and profit fell last year as declines in the land-line business offset growth in wireless. The number of fixed lines, including residential and business customers, slid 8.2 percent to 26 million at the end of last year, extending declines since 2003. Over the same period, wireless subscribers more than doubled to 94.1 million.

Verizon’s competitors include AT&T Inc. (T), the biggest U.S. phone carrier and second-largest wireless operator. AT&T has proposed acquiring Deutsche Telekom AG’s T-Mobile USA, allowing it to surpass Verizon Wireless as the country’s largest mobile- phone company.

Though Verizon’s unions authorized strikes in 2008 and 2003, they haven’t gone out on strike since 2000. That 18-day standoff affected 28 million customers and cost Verizon $40 million in revenue. The company settled the dispute by agreeing to a 12 percent wage increase over three years

(Bloomberg News)

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