Verizon Strike Averted (for Now)

Threat of a strike by more than 70,000 workers at Verizon Communications Inc. (NYSE: VZ) has been put on hold temporarily, according to a union announcement this weekend (see Verizon Strike on Hold).

The work stoppage has been anticipated for weeks (see Verizon Hits Rocky Road). About 57,100 members of the Communications Workers of America and roughly 22,100 from the International Brotherhood of Electrical Workers voted in July to strike if their three-year contracts with Verizon weren't successfully negotiated by midnight August 2.

Now, the unions say talks have progressed sufficiently to extend that deadline. Workers will remain on the job until further notice, the unions say. "Union leaders determined that enough progress had been made at the bargaining table to continue working toward a contract settlement. However, they reported that key issues remained unresolved," the two unions reported in their statement.

The talks, ongoing since June 16, involve a raft of issues, including employee contributions to health insurance, mandatory overtime, and job mobility across company subsidiaries, to name just a few. The scope and seriousness of the items on the table have caused many to worry that a strike of major proportions is inevitable.

Verizon spokesman Daniel Zapata said Friday the company continues to hope for resolution without a strike. But he conceded the carrier has more managers trained to take over installation and service calls than it did back in 2000, when the workers struck for over two weeks.

At that time, about 30,000 managers had been trained to carry on what Verizon sees as its "fiduciary" duty to support customers. Now, the number of trained managers is higher, and it's possible Verizon will turn to contractors to help out if necessary.

And it looks as if it may be. Both unions rallied last week, armed with picket signs. Some IBEW sayings: "Ma Bell is a Cheap Mother" and "Cutting Our Health Benefits Is a Sick Idea!" Union Websites refer to Verizon's recent profitable earnings report (see Carrier Revenues Keep Sliding and Verizon Posts Q2 Profit) and rich executive compensation as evidence of its ability to meet union demands.

In 2002, for instance, SEC records show that Verizon's top seven executives made $7.5 million in base salary and $9.3 million in bonuses. This doesn't count stock awards and numerous perks, such as payments for executive life insurance, consultants' fees for retired execs, use of company aircraft, and apartments.

At the same time, analysts are clear that Verizon is at a crucial juncture, pinched by competitors and still in need of cost-cutting roughly equivalent to 5,000 jobs. That makes it tough to avoid clashing with union demands for job security.

"Verizon's challenge is that they're facing fierce local and cable competition, particularly in high-speed Internet," says F. Drake Johnstone of Davenport & Co. LLC. "It's a pretty tough time to deal with a strike. If it happens, results will likely be worse than expected for the third quarter."

Some have speculated that a Verizon strike could also affect suppliers negatively, since new services requiring fiber and equipment will stall. Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI) has been cited as one vulnerable vendor, for example, because it furnishes digital loop carrier gear to Verizon for DSL services. Getting new installations of DSL is key to Verizon's battle for access dollars.

— Mary Jander, Senior Editor, Light Reading

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guiced 12/5/2012 | 3:35:28 PM
re: Verizon Strike Averted (for Now) Are you are stupid, or am i misunderstanding what youa re saying? The top executives of Verizon (less than 10 people) split over $82million in bonuses last year. That's just bonuses. Wouldn't you like to make a mere $50 or 60 thousand dollars in a year?

The people saying that the Union is in the wrong here simply does not know what they are talking about. Top executives in every company take home millions and millions of dollars in pay and bonuses year after year while the lowly employee struggles to pay his mortgage and electricity. Why don't these people spread the wealth a little bit more? How about simply giving the workers good health care and enough money to match the ever expanding economy?

Verizon made over $5 billion dollars last year. Why do they want to take away the workers health care? Verizon says they have the power of the network behind their customers. Can you guess who that network is? It's the union workers.

If Verizon got rid of the union, sure you'd have a lot of non-union people working for them, but at what cost to those workers? They'd work for about $13 and hour, forced to work 70 - 80 per week and have to pay $2k for health coverage each year. Good luck raising a family with that income.

The union is a good thing, it give the workers a small chance to be able to afford to provide for their family.
sjcmac 12/5/2012 | 3:35:13 PM
re: Verizon Strike Averted (for Now) Lets try to think about what you are proposing first fire all employees. then hire contractors. heres the problem with that Verizon pays 20 to 30 dollars per job that a contractor picks up wether or not its completed. so yes that would motivate a contractor to do more jobs per day than an hourly union worker now heres the problem. ive worked in the field with contractors not only are the not as skilled and unprepared with corect tools. mind you they have to buy there own tools but when your told youll get paid more by the amount of customers homes you go to, but are not required to complete the job you do terrible work in order to visit more customers in return terrible customer service. im a tech 3 with verizon and in my service area there are only two techs and when contractors came in we basicly had to clean up after them on a daily basis. they didn't document cable changes blamed all phone problems on customers inside wiring, never really resolved any telephone problems, and were unable to work with our facilities assignment central office technicians. so yeah lest give them our jobs there is a reason why verzon pays us our wages its called. quality work and great customer service.Lets do exactly what you say and hire contractors. give your self a pat on the back for a well thought out solution to the companies problem. overhauling verizons work force would be devastating to the company they trained managers from the west coast to cover labor strikes in the east coast leaving west coast employees unsupervised and im not saying all contractors are use less either, but when you set it up where you get paid wheter or not you complete your work yet require your union workers to explain every incompleted service or repair order then yes u will have less jobs per day.
telebud 12/4/2012 | 11:40:54 PM
re: Verizon Strike Averted (for Now) err..except when we go on strike!!
My friend in NY told me the CWA told them to
expect a long strike and better have about
10 Months of Mortgage saved up or more.
Wow!! They must be rich those Union guys!
I think I'll go out and join a Union.

grapsfan 12/4/2012 | 11:40:48 PM
re: Verizon Strike Averted (for Now) telebud, I heard the same thing six months ago, from people I know in VZ operations across New England & NY/NJ. This could get ugly. I hope, for everyone expecting dial tone's sake, that VZ has their bases covered.
BobbyMax 12/4/2012 | 11:40:47 PM
re: Verizon Strike Averted (for Now) It is well known that the SBC chairman has been giving big bonuses to himself. Very frankly I have not seen any benefit of his presence. Last year he made close to 8 million dollars inspite of the fact that the company was in huge debt. No body in the company was able to explain how these large debts were incurred and for what purpose the money was spent.

The benefits paid to the top managers and the board members of the SBC.

The company so big that it cannot be managed. The company is overstaffed, especially, Pacific Bell. The charman has not taken any positive action to make the company profitable.

I think the time has come to replace "Dr." Whitaker as he is not very effective.
telebud 12/4/2012 | 11:40:47 PM
re: Verizon Strike Averted (for Now) The Union only has $250 mil good for 4 months.
Sounds worst then the 2000 strike. I think
Verizon is really vonerable now because of all
the 9/11 losses and all that stuff. That's when
the UNION gets you when your most vonerable.
telebud 12/4/2012 | 11:40:46 PM
re: Verizon Strike Averted (for Now) A STRIKE is going to HELP the situation.
The board could just sell off the whole company
and EVERYONE will be out of a job.
Channel Player 12/4/2012 | 11:40:46 PM
re: Verizon Strike Averted (for Now) That's funny, I read an article about Verizon.
telebud 12/4/2012 | 11:40:45 PM
re: Verizon Strike Averted (for Now) Do you know how the bosses in your Union are
spending your PENSION Funds?
Maybe we should apply Ralph Nader's solution to
controlling Corporations by government directly
taking over control to do the same thing and
have Government take over running UNIONS.
If it's good for government to do it for Fortune 500 Corporations it should be ok for government
to take over Unions.
telebud 12/4/2012 | 11:40:45 PM
re: Verizon Strike Averted (for Now) But it's not funny if you are one of VERIZON'S
distributor's,contractors,Suppliers like Lucent
who's business will get disrupted and customers
upset.Mabey they will find a way to go to ATT
or someone else. If it is a long strike mabey
all of the union guys will lose their jobs anyways
and the company if it survives will bring in
cheap Indian Labor or something like that.
I don't think Anyone will win in the END.
Only LOSE!! No one's job is SECURE these days
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