- The Washington Times - Thursday, August 4, 2011

Verizon Communications Inc., the region’s top telephone service provider, is facing a 12:01 a.m. Sunday strike deadline, at which time 45,000 union employees in nine states, including Maryland and Virginia, as well as the District, may walk off their jobs.

On Thursday, negotiations appeared to be heading down to that deadline, with neither side expressing great optimism. The last time Verizon’s workforce struck the firm was in 2000, when members of the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) walked off the job for 18 days.

“The parties are still very far apart,” IBEW media director Jim Spellane told The Washington Times. “Verizon came in with a very draconian set of proposals to cut back [working] conditions, to take it back decades, basically. Our members are obviously resisting that.

“A strike is a drastic action, and it’s a hardship on everybody,” he added, but “it is a possibility.”

Candice Johnson, communications director for the CWA, said that while that union’s “workers want a contract,” Verizon “has made a number of unreasonable demands, especially for a company that has been quite profitable, [having] made $20 billion in profits the last four years.”

Verizon spokesman Richard J. Young, speaking from Philadelphia, where talks are being held, said the firm is “negotiating in good faith, and we hope to reach final agreement that balances the needs of all parties.”

However, he said, the “economy is in a difficult period, and our wireline business has its own set of challenges,” referring to the firm’s traditional telephone business, where customers are connected via a line that comes into the home. That is where the CWA and IBEW members work, and that business has, Mr. Young said, “been declining for past 10 years as consumers use alternative technologies, including wireless and cable telephony.”

Mr. Young asserted that customers are ditching traditional wireline service in favor of wireless cellphones and cable — as well as Internet-based telephony services, such as Vonage and McLean-based Primus Communications. He said the firm is “operating under a cost structure that was set in place several decades ago. Some of the work rules are out of touch with today’s marketplace.”
Verizon, Mr. Young said, needs “to make the wirelines business more competitive.”

“One way is to alleviate some of these costs,” he said.

The firm’s request that unionized workers make a “contribution” towards health care premiums is a sticking point, however.

On the company’s side, Mr. Young said, nonunion employees of Verizon currently pay part of their health insurance premiums, while, in total, the firm “spends more than $4 billion annually on health care, or $400,000 an hour for our employees.”

While declining to discuss specific plans, Mr. Young said the union had been given “several proposals with as little as $100 a month” being requested.

The CWA’s Ms. Johnson asserts the firm’s “health care proposal would cost [union] families another $6,000 a year.”

“From a profitable company such as Verizon, it doesn’t make sense,” she said.

On July 22, Verizon reported 57 cents in earnings per share for the quarter of 2011, versus “a second-quarter 2010 loss of 42 cents per share.”

According to a Verizon news release announcing the results, the company’s top executive was pleased with the financial outcome.

“In terms of earnings growth and the acceleration of revenue growth, this has been one of Verizon’s best quarters since the 2008 economic downturn,” said Ivan Seidenberg, Verizon’s chairman, who gave up his CEO post on Aug. 1 in a pre-retirement move. “We expanded sequential margins in both our wireline and wireless businesses, and in the second half of the year, we expect Verizon to build on this strong, positive momentum to continue to drive profitable, sustainable growth,”
Mr. Seidenberg was quoted as saying, “We remain focused on our cost structure, as we deliver improvements in wireline margins quarter after quarter.”

On Aug. 1, Lowell C. McAdam, a licensed professional engineer who has spent the majority of his 28 year in telecommunications working for Verizon or its predecessor ventures, became president and CEO, succeeding Mr. Seidenberg in the latter role.

Should a strike happen, Mr. Young said, the firm is prepared: “Tens of thousands of [Verizon] managers and other personnel have been trained to perform emergency assignments,” he said, claiming these people would handle “network repair, customer service, [and] billing. We’re confident we can maintain our systems.”

Ms. Johnson, the CWA spokeswoman, said the goal is to keep union jobs in the U.S.: “These are good jobs. Our members have made Verizon the successful company that it is.”

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