By Sinead Carew
NEW YORK, Sept 19 Verizon Communications
and two unions have reached tentative agreements for labor
contracts covering about 43,000 technical and customer service
workers in its wireline telephone business after more than a
year of negotiations and a strike.
Verizon was looking to slash its wireline telephone costs to
bring them into line with declining revenue at the business,
which has faced a steady stream of customer disconnections in
recent years as consumers favor cellphones over home phones.
But the unions had fought back, saying that it asked for too
many concessions in areas such as job security, pensions and
healthcare contributions for the workers, which represent about
half of Verizon's wireline workforce.
Under the new agreement, Verizon failed in its effort to
freeze pension plans and change some job security provisions,
but it prevailed in making the workers contribute for healthcare
benefits, according to a union communication with its members.
Verizon declined to discuss the details of the contract.
Guggenheim Securities analyst Shing Yin said it seemed "at
first glance that Verizon had probably made more concessions
than the union."
But Yin described the news as a "mild negative" and said he
expects Verizon shares to hold steady because investors were not
"expecting the contract to be very positive for Verizon" after
the long drawn-out negotiations.
The new contracts with the Communications Workers of America
and the International Brotherhood of Electrical Workers would
run through Aug. 1, 2015, if they are approved by the workers.
FROM SABOTAGE AND INJURY CLAIMS TO MEDIATION
Verizon and the unions decided to enter into mediation talks
in late July because they had not reached an agreement after
their negotiations neared the 1-year anniversary of the start of
a 2-week strike that took place in August 2011.
During the work stoppage, which started on Aug. 7, 2011,
Verizon asked tens of thousands of its managers to work 12-hour
days for 6 days a week to cover for the strikers.
The strike, which put a dent in Verizon's third-quarter
earnings last year, had quickly turned bitter as Verizon
complained of network sabotage while the unions had said that
picketers were injured by Verizon vehicles.
The CWA, which represents 34,000 of the workers in question,
said the new contract preserved previous job security language
and the existing defined pension plan for all its current
However, employees who join Verizon after ratification will
instead be put on a 401(k) retirement program in which the
company will match employee contributions of up to 6 percent of
Verizon said the contract would be good for the company and
its employees, but a spokesman declined to comment on the
financial impact of the new agreement.
"It provides competitive wages, valuable benefits and
affordable quality health care while giving the company new
flexibility to better serve customers and become more
efficient." Verizon Chief Administrative Officer Marc Reed said.
Verizon shares closed at $45.27 on the New York Stock
Exchange on Wednesday.