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July 19, 2012
By Josh Long
Verizon Communications, Inc. on Thursday rejected a request from two unions for mediation over contracts governing 45,000 workers.
Lawrence Marcus, Verizon’s senior vice president of labor relations, told a representative of the Communications Workers of America that the telecommunications company has agreed to a number of suggestions from the unions concerning the "process" but that the concessions have only resulted in delay.
"What we have also experienced during these negotiations has been extended periods when the unions have failed, despite repeated Company requests, to make counters on critical issues like medical for many weeks," Marcus wrote in a note to CWA region 1 vice president Chris Shelton. "In short, the issue isn’t "process" – but a willingness to address substance. As I told you in June 2011 and have stated repeatedly throughout these negotiations, the Company needs meaningful change relating to its cost structure and operational flexibility."
The CWA and International Brotherhood of Electrical Workers on Thursday announced requesting federal mediation, declaring in a press release that "Verizon management continues to insist on drastic cuts in benefits and employment security." A spokesman with the Federal Mediation and Conciliation Service said both sides have to agree to mediation.
Executives with New York-based Verizon have maintained the company must deal with "economic realities" in its shrinking landline business by requiring workers to contribute to healthcare premiums and make other reasonable concessions. In its second-quarter results announced Thursday, Verizon revealed that wireline operating revenues fell 3.1 percent to $9.9 billion.
So when you look at the profitability of this business over the last five years it has decreased and its cost structure is not sustainable going forward," Verizon CFO Fran Shammo told Wall Street analysts Thursday during a conference call when asked about the negotiations with the unions. "We really needed the business to address this cost structure in relation to the benefits, particularly healthcare contributions and pensions, and we need increased flexibility around our work rules Some of these work rules date back to 1960. So we arent asking for things that have not already been given to other companies. These are not new issues for the union. Many of our peer companies are already there. So we are standing strong on our position of cost restructure in this business. The negotiations are continuing, albeit slow. And the process will take as long as it takes for us.”
Verizon workers hit the picket lines last summer in one of the biggest walkouts in recent times, then returned to work in late August despite the fact that no new contract had been ironed out. Nearly a year later, the two sides still appear to be far apart on key issues.
Marcus, the Verizon executive, told the CWA’s Shelton that the carrier was proposed to meet with the unions Friday "and present another comprehensive proposal."
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