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Marc Reed, executive vice president of human resources and administration, today provided the following status report on bargaining with the CWA and IBEW for new labor agreements for East associates:
As you know, it’s now been one year since we began contract negotiations with the CWA and IBEW. It is disappointing that we haven’t yet reached a settlement that is acceptable to both sides.
I want to summarize where we are.
Our objective today – as it has been for the last year – is to reach a contract settlement that continues to provide our associates with good, well-compensated jobs in a financially healthy company. To do so, we need to adapt to the economic and technological forces that are transforming every business in America. We all know the pressures. Health care costs continue to rise at a rapid rate. Competition has eroded our traditional access line business by approximately 50 percent in the past 10 years. Operating income in Wireline is barely at break-even levels, despite billions of dollars of investment in FiOS.
No business or business unit of a company can sustain itself indefinitely if it doesn’t generate the profits to fund its growth and return money to its shareowners. Some companies, like General Motors, acted too late to save themselves without radical and painful changes. Fortunately, we still have the chance to make the meaningful changes now that can preserve Wireline’s financial viability.
Some of the key areas being discussed include job security, benefits, absence and work rules.
Job security and work rules. Recognizing our employees’ concerns about job security, the company made a proposal in mid-May to continue to provide job security for the more than 38,000 associates who currently have those protections in exchange for the unions agreeing to greater work-rule flexibility. For example, the company is seeking greater latitude to move people to the work and work to the people so we can operate more efficiently. Although there has been some movement on the union’s part on work-rule changes over the last six weeks, the proposals made by the union are insufficient.
Health care and pension benefits. We’re asking that East associates make modest monthly contributions to the cost of their health care premiums, as do 99 percent of American workers. These contributions can be as little as about $24 a month for individuals and $107 for a family.
The company is also seeking additional cost-sharing measures, as they relate to office visit co-pays, deductibles and co-insurance, which have not significantly changed in many years. In fact, the CWA/IBEW have agreed to similar changes in other contracts even within our own industry. These plan changes would also apply to retirees. The company is also looking to make changes to our current defined benefit pension plan for associates, which is causing future pension liabilities to rise substantially. Today, we provide both a generous pension and a matching 401(k) plan — highly unusual in today’s competitive environment. To achieve our goal of preserving pension benefits already earned while reducing the growth of our pension liabilities, our proposal would increase the match in the 401(k) plan and allow active employees to continue to accrue pension benefits at a reduced rate up to 30 years of service.
As for other benefits, we’re proposing no changes to the short-term disability and life insurance plans for current associates.
New hires would be eligible to receive an enhanced 401(k) plan and will have the option to purchase retiree health insurance and life insurance benefits.
Attendance. Another major cost driver is absence. Our proposal limits paid incidental absence to six days a year while providing a cash incentive for associates who have five days or less of paid incidental absence. These incidental absence days are not counted toward your disability benefit and more than 50 percent of East associates would benefit from this incentive opportunity, based on historical data.
Other work rule changes. Most of our work rules were conceived in a much simpler technological era. Today, these inflexible rules get in the way of serving customers and impose unacceptable costs on the business, which makes us less competitive. We’re proposing a number of changes – some of them voluntary — to make us a more effective and flexible organization. Examples include piloting a voluntary work-at-home program and expanding voluntary home garaging programs, which will reduce costs and help participating employees balance work-life pressures.
While this is not an exhaustive summary of our proposals, under this contract Verizon would continue to provide good jobs that are well-compensated and provide eligibility for great benefits. Again, we’ve been at this for a year now, and the company has a strong desire to reach an agreement this summer. Our goal remains achieving a fair and reasonable settlement that positions the Wireline business to succeed – not just next year but for many years in the future.
The DailyKos reported on March 23rd.
An IBEW Local President highlighted the fact that negotiations can’t go on forever, and that Verizon’s failure to bargain in good faith has a probable endgame: “At some point in time, we think the company is posturing to lay down their last best and final offer,” Huber said. He said the unions — representing about 5,600 wireline workers and a similar number of back office employees who are members of the CWA — fear the company will declare impasse in talks, and would no longer comply with the terms of the previous contract.
Read the story here.
Related information: How To Play Collective Bargaining Hardball with the Union