Verizon CEO asks unions for help
Verizon Communications Chairman and CEO Ivan Seidenberg told the Detroit Economic Club yesterday, as the carrier prepares to enter contract negotiations with the Communications Workers of America and the International Brotherhood of Electrical Workers, that union leadership needed to change its mindset to avoid risking future job security and prosperity for its respective memberships.But Seidenberg stressed that the carrier was not looking to reduce wages. “Our people will be among the best-paid union workers in the country after the ink is dry on a new contract, just as they are now,” Seidenberg said.
But Verizon is seeking greater flexibility on issues such as work rules, employee training, healthcare, and pensions. As competition continues to cut into Verizon’s core voice business, the carrier will need the flexibility to adjust the size, cost and location of its workforce as needed, Seidenberg said. In addition, Verizon must be allowed to redesign its operations around new technologies, retraining workers as needed.
However, the unions shouldn’t necessarily assume that Verizon is hinting at a job reduction, said Verizon spokesman Peter Thonis. “How to reduce headcount is not the point. The point is, how do we work together in a changed environment,” said Thonis, who added that simply being able to move people to where they are needed – which current rules prohibit – would be an enormous help. “Everybody has to realized that the current contract was written when the marketplace was very different,” Thonis said.
CWA spokeswoman Candace Johnson said the pending negotiations shouldn't be about job reductions. She said Verizon is beginning to feel the effects -- in the form of service quality issues -- of a 2500-employee reduction at the end of 2002 that affected New York state and part of New England.
"Job cutting makes Wall Street happy, but it doesn't make the customer happy," Johnson said. "You have to have enough people to get the job done and meet the customers' needs."
Regarding healthcare, Seidenberg said Verizon’s costs are rising “at double-digit rates, with no end in sight.” He said a new model was needed, one that puts an emphasis on prevention and accountability. Similarly, the carrier’s pension plan needs to take into account a younger, more mobile workforce.
Johnson agreed that healthcare needs to be addressed, but took exception with the implication that union leadership would stand still while Verizon attempted to move forward. "Some of things he talked about are things CWA proposed back in the '80s," she said. Among these is a managed health care proposal that saved the former Nynex and Bell Atlantic millions. CWA also was the first to propose employee retraining, Johnson said. "Telecom is an industry of change. There were 200,000 telephone operators in 1960. There aren't any today."
Seidenberg compared the current conditions in telecom to those that existed in the automobile industry two decades ago, when it was under intense competitive pressure from foreign automakers. He praised Detroit and the auto unions for their ability to work together to reduce costs and embrace new technologies that made domestic automakers more efficient and flexible and which resulted in better products.
“The lesson is that, because labor and management made a mutual commitment 20 years ago to quality, competitiveness and the long-term survival of their companies, we still have a domestic auto business in this country today,” Seidenberg said.
In other news, Verizon announced today that it had launched long-distance service in Maryland and Washington, D.C. Verizon provides long-distance service in 48 states and is the nation’s third-largest provider of such services, having surpassed Sprint earlier this year. At the heart of its residential offering in Maryland and Washington, D.C., is Verizon Freedom, which provides unlimited local, toll and long-distance calls throughout the U.S. and Canada, with no time limits, for $49.95 per month. The package includes popular features such as voice mail, Caller ID, Call Waiting, three-way calling and speed dial.
