Negotiate As Strike Deadline Looms
By Amol Sharma
The Wall Streeet Journal
Saturday, August 2, 2008
Inc. was facing a weekend labor strike deadline as it negotiated
Friday with unions representing about 65,000 employees.
The workers object to the company's plans to require employees
to contribute toward health-care coverage costs. They also are
concerned that the telecommunications provider is reducing the
bargaining power of its work force by subcontracting jobs to
The unions have threatened a work stoppage if a deal isn't
reached before the existing labor contract expires at 12:01 a.m.
Sunday. Verizon spokesman Peter Thonis declined to comment on
any specific union objections but said the two sides were making
good progress. "We're very optimistic it will be resolved before
the deadline," Mr. Thonis said.
Union officials weren't as sanguine about the prospects of a
deal being reached. "We still have a lot of ground to cover in
the negotiations," said Candice Johnson, a spokeswoman for the
Communications Workers of America, which represents about 50,000
Verizon workers. The CWA and the International Brotherhood of
Electrical Workers, the other union involved in the current
discussions, represent workers in Atlantic states stretching
from Massachusetts to
Virginia. Verizon has a total of 230,000
A work stoppage, even a relatively brief one, could affect the
company's aggressive rollout of a fiber-optic network that
powers its FiOS television and high-speed Internet services. A
strike also may disrupt customer service for existing Verizon
subscribers, which the company can ill afford as it battles
cable providers for customers.
Some Verizon workers have rallied in recent days to threaten a
strike, and both unions have voted to authorize one. The
health-care issue is particularly contentious. Verizon currently
picks up the entire cost of insurance premiums for CWA and IBEW
workers. Such arrangements are relatively uncommon. According to
a 2007 survey by the Kaiser Family Foundation, 20% of workers
with single coverage and 6% of workers with family coverage work
for a firm that pays 100% of insurance premiums.
Beyond the issues being discussed, the unions have long-standing
concerns about the ability of workers to organize at Verizon,
especially in its Verizon Business unit, which was formed after
the company acquired MCI Communications Inc. in 2006. Verizon
Wireless, a joint venture of Verizon Communications and the
PLC, has very few unionized workers. The current union
discussions affect only wireline division workers representing
about 25% of the company's revenues, according to Mr. Thonis.
Some industry observers see a strike as unlikely. Chris Larsen,
a Credit Suisse telecom analyst, predicted workers wouldn't
support a strike in the end, especially given the weakening
economy. "There hasn't been enough saber-rattling to indicate
they really want a strike," Mr. Larsen said. One alternative to
a strike is for employees to work without a contract for a
certain period while negotiations continue.
Verizon recently began selling FiOS in parts of New York City, a
crucial market where it will go head to head with cable
Time Warner Cable
Inc. Verizon reported a solid second quarter based largely on
strong wireless results. But its 176,000 FiOS TV subscriber
additions were lower than some Wall Street analysts expected.
to Amol Sharma at