Technology

The business and culture of our digital lives,
from the L.A. Times

« Previous Post | Technology Home | Next Post »

Verizon's 45,000-employee strike enters Day 2, impasse widens

August 8, 2011 |  9:05 am

Lpm29ync

A standoff between Verizon Communications Inc. and about 45,000 of its employees entered a second day of strikes with no apparent end in sight.

On Monday morning, Candice Johnson, a spokeswoman for the Communications Workers of America. said Verizon had been canceling bargaining sessions on Saturday and Sunday as the company's collective bargaining agreement with its eastern U.S. landline employees expired, setting the strike and picket lines into motion.

"Verizon workers are waiting for management to demonstrate that it's ready to bargain," Johnson said in a statement. "In fact, we're looking for Verizon to stop canceling bargaining sessions that have been scheduled."

Workers involved in the strike come from Verizon's landline division in Massachusetts, Rhode Island, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, West Virginia and Washington, D.C., and are represented by two unions -- the Communications Workers of America and the International Brotherhood of Electrical Workers unions.

At the center of the dispute between the nation's largest telecommunications company and the workers is the issue of benefits and who should pay for them -- particularly when it comes to healthcare coverage.

Verizon said that most of its union-represented employees "pay nothing for health insurance premiums" and that the company "is proposing that its union-represented employees pay a portion of their health care premiums, much like the majority of other Verizon employees."

The reason Verizon says it's asking for the striking workers to make the concessions is due to a decade of its landline business losing customers as consumers have turned to mobile phones or packages from cable providers that bundle landlines with TV service.

But despite the shrinking landline business, the unions each suggested that Verizon hasn't suffered much, having reported a profit of $3.2 billion in its most recent quarter and a total of $258 million paid out to five top executives over the last four years.

As of Monday morning Verizon stock was down only 3%, trading at about $34 per share.

"It's no secret that the Wireline business has experienced a ten-year decline in our customer base and in profitability, despite investing billions in improving our network, processes and systems," Verizon Chief Executive Lowell McAdam said in a statement. "We have taken many steps to offset this decline, including reducing our workforce, increasing the amount our management employees contribute to their benefits, and even selling some of our Wireline properties."

But healthcare isn't the only point of disagreement between the parties.

Bargaining between Verizon and the two unions began June 22 and as of Monday more than 100 "concessionary company proposals remained on the table," the Communications Workers of America said.

The International Brotherhood of Electrical Workers said giving in to Verizon's proposed contract changes would "take much of its unionized workforce back to 1960s levels of wages, benefits and working conditions."

While the groups are at an impasse, Verizon said it has more than 40,000 managers and contractors set to step in and do the jobs of the striking employees. But leaving the labor dispute unresolved could be a major setback for Verizon, said its chief executive, McAdam.

"It is clear that some of the existing contract provisions, negotiated initially when Verizon was under far less competitive pressure, are not in line with the economic realities of business today," he said. "In fact, under these contracts, benefit costs have risen consistently even as the Wireline business has shrunk ... As the U.S. automobile industry found out a few years ago, failure to make needed adjustments -- when the need for change is obvious -- can be catastrophic."

ALSO:

Verizon details its new 'usage based' data plans

Worried about your kids' safety online? You should be

Verizon running about 32% of Apple iPhone 4s in U.S., study says

-- Nathan Olivarez-Giles

Twitter.com/nateog

Image: Verizon workers picket outside a company office on Monday in Philadelphia. Credit: Matt Rourke/AP Photo

Comments 

Advertisement










Video