Bargain hunting

Verizon last week began contract negotiations with two unions in an effort to avert a crippling strike.

The regional Bell operating company entered into collective bargaining talks with the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) to reach agreement on new contracts for some 80,000 Verizon employees in the Northeast and Mid-Atlantic States. The current contracts expire at midnight Aug. 2.

Verizon is looking for the union employees to pick up a larger share of their medical benefits and to reduce absenteeism. Currently, the employees pay about 5% of their healthcare, while the average cost per employee in corporate America is 26% to 27%, according to a Verizon spokesman.

Meanwhile, the absentee rate is 6%. Absenteeism costs Verizon $600 million per year, while health benefits for the 80,000 employees cost the RBOC $1 billion per year and are rising 12% annually.

The unions, however, are looking to keep the current contract language while seeking some job security and medical benefit improvements. The CWA is also reportedly hinging successful negotiations on its ability to organize Verizon Wireless, but Verizon says the union has been unsuccessful is previous attempts over the years.

Also, an existing agreement between Verizon Wireless and the union over how the wireless operation can be organized does not expire until 2004.

Though negotiations just began, the unions are “more prepared than ever” for a work stoppage, but an IBEW vice president acknowledges that is not the desired outcome. Observers expect a strike, which, they say, will affect Verizon’s deployment of equipment, potentially its ability to deliver existing and new services, as well as the overall economy.

The RBOC said it would spend between $13 billion and $15 billion on equipment and related materials this year, but the carrier has so far spent less than 20% of that, according to industry reports.

The last strike at Verizon was a three-week, 88,000-employee work stoppage in 2000. In 1989, when the RBOC was known as Nynex, 62,000 employees walked off the job, slowing telecommunications services for 100 days in what was one of the nation’s most disruptive strikes. It resulted in the CWA winning most of its concessions.