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Verizon labor deal could bode well for Denver telco
By Jeff Smith
Rocky Mountain News
Tuesday, August 12, 2008

A Verizon labor agreement Sunday that averted a potential strike could bode well for successful Qwest-union talks, though both sides were quick to say Monday the financial situation is different here.

Talks between Qwest and its unions are in a critical phase, with the contract covering 20,000 union employees expiring Sunday at 12:01 a.m.  That's just a week before the Democratic National Convention in Denver and two weeks before the Republican National Convention in Minneapolis-St. Paul.

Some see the timing as giving the union leverage, since Qwest is the official telecommunications provider at both conventions.  But Qwest, which recently lowered its full-year financial forecast, may be under pressure to get a better labor deal and more health-care concessions than Verizon did.

Verizon averted a potential strike when the Communications Workers of America and other unions agreed to an 11 percent wage increase over three years.  The deal also calls for 600 business-unit workers to transfer to the union, 900 temporary jobs to become full-time union positions and Verizon to continue to pay 100 percent of employee and retiree health-care premiums.

"These are all things that every union out there is trying to accomplish," said Al Kogler, spokesman for CWA District 7 in Denver.  "Maintain health care, good wage increases and we want to increase the quality of jobs."

But Kogler said he doesn't know if the Verizon agreement will translate to the Qwest-CWA situation.  "There's differences between the financial shape of Qwest and Verizon," he acknowledged.

Kogler also noted there was give and take in the Verizon-CWA negotiations.  For example, new Verizon employees will see reduced health care benefits when they retire.

Qwest spokesman Bob Toevs stressed even more strongly the differences in the situations, although he would not discuss the current bargaining talks.

"These are vastly different companies in terms of a variety of measures -- market cap, revenues," Toevs said of Verizon and Qwest.  "But perhaps the biggest difference being the Verizon Wireless operation."

Fast-growing Verizon Wireless, a joint venture of Verizon and Vodafone, continues to have a very small percentage of union workers.

Qwest, indicating where it is focused, said on its bargaining Web site that it has given the union "hundreds of documents" about the current "health-care challenge."

Citigroup analyst Michael Rollins on Monday upgraded Qwest from a "hold" to a "buy," saying in part he believes Qwest will be able to more aggressively restructure costs following the labor negotiations.

Meanwhile, CWA members overwhelmingly voted to authorize a strike if negotiations collapse.  Kogler said a strike vote is a normal part of the procedure.

For a strike to take place, the CWA executive board would have to authorize President Larry Cohen to set a strike date.

The CWA covers workers in Qwest's 14-state local phone region, with the exception of Montana, where the International Brotherhood of Electrical Workers represents union employees.

Key points

* Negotiations cover 20,000 union employees in Qwest's 14-state local phone region.

* Current contract expires Sunday at 12:01 a.m. - one week before the Democratic National Convention in Denver.

* Key issues include health-care costs, wages, retiree benefits.

* Union may have leverage with DNC coming up -- Qwest is the official telecommunications provider.  But Qwest last week lowered its financial forecast, and the union realizes the Denver telco is under pressure to cut health-care and other costs.