By Verizon, Special for USDR
After nearly 10 months of unsuccessfully trying to reach a contract, Verizon remains committed to its negotiation objectives and seeks to bring this process to closure.
“We’ve tried to work with union leaders to reach a deal,” said Marc Reed, Verizon’s chief administrative officer. “Verizon has been moving the bargaining process forward, but now union leaders would rather make strike threats than constructively engage at the bargaining table.”
In the event of a strike, the company is fully prepared to serve its customers.
“We do not take strike threats lightly,” said Bob Mudge, president of Verizon’s wireline network operations. “For more than a year, we’ve been preparing in the event union leaders order our employees to walk off the job. If a strike takes place, whether it’s one day, two weeks or longer, we are ready.”
Mudge added, “We have trained thousands of non-union Verizon employees to carry out virtually every job function handled by our represented workforce – from making repairs on poles to responding to inquiries in our call centers. We know the unions’ strike order will be a hardship and pose challenges for our employees, but as a 24×7 customer service company, our contingency plans are in place and our company will continue to serve those who rely on us.”
Verizon approached these negotiations with a goal of preserving good jobs while also making critical changes needed to legacy contracts. Verizon’s 36,000 employees covered under these contracts currently have a wage and benefit package that averages more than $130,000 a year. Over 99 percent of these employees support the wireline business which in 2015, contributed about 29 percent of Verizon’s revenue but less than 7 percent of the Company’s operating income.
As it has in the past, union leadership has resisted making changes. Verizon’s unions in the East have struck in two out of the past four bargaining cycles (most recently in 2011), meaning the leadership of these unions took the workers out on strike 50% of the time.
“A strike in this case is not going to change the issues on the table that need to be addressed,” said Reed. “Union leaders need to take an honest look at what Verizon is proposing.”
Highlights of the company’s wireline proposal include:
- A 6.5 percent wage increase over the term of the contract.
- Access to quality and affordable healthcare benefits.
- Competitive retirement benefits including a 401k with a company match.
The company’s healthcare proposal makes structural changes to Verizon’s legacy healthcare plans while continuing to provide broad access to quality and affordable comprehensive health coverage. The rising cost of healthcare is a concern to all companies. Last year, Verizon spent over $3.2 billion on healthcare for its employees and retirees, about 45 percent of which was for the employees and retirees from the unions Verizon is now negotiating with. The cost of family coverage for this group is up to $24,000 for active employees and $39,000 for retirees. Verizon is seeking common sense solutions to manage the rising costs of medical and prescription drug programs. The solutions that Verizon has proposed are already in place for Verizon’s 130,000 other domestic employees.
Verizon is also looking to modernize legacy contractual provisions, some put in place decades ago. The company is seeking greater flexibility to manage and utilize its workforce to gain operating efficiencies and better customer experiences.
“Legacy constraints that may have made sense in the Ma Bell era of phone booths and Princess phones don’t make sense in today’s digital world with high-speed connectivity and dynamic customer demands,” said Reed. “Union leaders need to realize that there are real issues that will need to be addressed with or without a strike. Our goal is to continue providing good jobs with competitive wages and benefits and make the wireline business more successful now and in the future. Union leadership needs to be realistic and work with us to help make that happen.”
Verizon Communications Inc. (NYSE, Nasdaq: VZ) employs a diverse workforce of 177,700 and generated nearly $132 billion in 2015 revenues. Verizon operates America’s most reliable wireless network, with more than 112 million retail connections nationwide. Headquartered in New York, the company also provides communications and entertainment services over America’s most advanced fiber-optic network, and delivers integrated business solutions to customers worldwide.
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