Qwest, unions begin negotiations
Tough talks expected for company saddled with $17 billion debt
By Jeff Smith, Rocky Mountain News

Thursday,June 23, 2005

Qwest Communications opened contract negotiations Wednesday with its 25,000-member unions, amid a continuing difficult and competitive environment.

Union employees want a better economic package than two years ago, when they agreed to a wage freeze with the possibility of bonuses based on operating earnings. Union employees wound up getting annual payouts of 2 percent, but the lump-sum bonuses didn't add to their base wage rates.

While Qwest's financial performance has improved marginally since then, the Denver telco still is saddled with $17 billion of debt and stiff competition from cellular phone companies, cable companies and the like.

Despite expected difficult negotiations, independent telecommunications analyst Tom Friedberg said he thinks both sides will work to avert a strike.

The current contract expires at midnight Aug. 13.

"I don't think the union or management really wants a strike," Friedberg said.  "Even though the union hasn't gotten a lot of what it's wanted over the last five-plus years, I think they've come to recognize the phone company isn't as indispensible as it used to be."

A strike also would hurt the company's image, Friedberg said.

"(Chief Executive Dick) Notebaert's whole schtick has been kinder, gentler 'spirit of service.'  If you have the CWA (Communications Workers of America) out on strike, it really does affect your core theme.  To Notebaert's credit, he has a better sense of how to handle this than some of his predecessors."

Annie Hill, vice president of CWA District 7, said many locals held rallies to mark the beginning of bargaining.  Many also wore T-shirts and buttons reading, "We are the front line, not the bottom line."

"I think we have a good baseline relationship with Qwest, which always makes it easier," Hill said.

She predicted health care benefits would be one of the toughest issues because of increasing costs.  Besides wage increases and health care, Hill also has identified pension increases and job security as priorities.

Qwest spokesman Bob Toevs said the company would leave discussion of agenda items to the bargaining table, but "we would characterize our relationship with our unions as being strong and positive."