We take a look at how events unfold, as Verizon workers’ strike enters its fourth week of negotiations
Verizon Communications Inc.’s (VZ) workers are expected to go on a longer-than-expected strike after both unions, The Communications Workers of America (CWA) and International Brotherhood of Electrical Workers (IBEW) rejected Verizon’s “last, best and final offer.” Together, the unions have termed the offer as inadequate, stating that the company is willing to offer higher wages and benefits, at the expense of lower job security.
CWA, research director, Louise Novotny stated: “Wages and benefits really don’t matter if we don’t have jobs.” The union’s members are still on strike, as they consider the next steps in the negotiation process. The mobile carrier has entered its fourth week of negotiations with its workforce.
Roughly 40,000 of Verizon’s representatives on strike will receive lost-wages and benefits, from a $400 million union fund, starting this week. Talking about the prolonged strike, a CWA representative said: “We think the strike is quite strong and the people are not crossing the lines and we have not seen anything that resembles concerns by members about going back to work.”
A day before Verizon’s annual shareholder meeting, its shareholders (including many of its workforce on strike) prepare for more than 400 protests across the country. Shareholders are set to take the streets in Oklahoma City, Austin, Dallas, Indianapolis, Chicago, Detroit, Memphis, Atlanta, Kansas City, Wichita, Nashville, Knoxville, San Francisco, Los Angeles, Sacramento, and Miami. Around 2,000 workers are expected to protest outside a Verizon Wireless store on Wall Street, New York as well. Workers are also expected to protest outside the shareholder meeting in Albuquerque.
Verizon’s Decorating Service
Verizon customers have started to feel the heat of the strike. According to the CWA, more than 300,000 people have shown support to workforce on strike, by signing petitions and demanding the company to bring back the employees. According to a recent survey from YouGov, Verizon’s public opinion has reached a three-year low.
Recently, the New York State’s Public Service Commission has launched a probe, to investigate problems in the company’s service quality. The Pennsylvanian and New Jersey service commissions have investigated the company, for similar complaints.
The CWA filed a complaint, against Verizon, to the Federal Communications Commission (FCC) yesterday, “for systematically deceiving customers, refusing to fix the phone lines of customers on its traditional copper network, and forcing them to switch to the company’s fiber network or lose all service.”
According to Public Knowledge staff attorney, Meredith Rose, by forcing its customers to switch over to the FIOS network, the company has been negligent towards the most basic form of telecom services for its customers. According to the FCC’s Copper Retirement rules, a company must give a 90-day advance notice to retail customers, to give them enough time to easily transition from copper to fiber. The carrier is also faced with a decrease, in overall net subscriptions, for its FIOS network.
image
However, Verizon has tried to mitigate the strike’s effect, by deployment of a thousand additional employees and contractors, to help out in field and customer service related duties. After its workers went on strike, Verizon stated that it has installed thousands of new connections, and continues to work towards providing exceptional service, to its customers. The company has also cited 57 occurrences of network sabotage, after the strike was declared.
Speaking to Bidness Etc about Verizon’s efforts to bring in additional workers, assistant to the Vice President for CWA-District One, Bob Master, said: “They cannot get the job done while our members are on a strike and I don’t think there is any doubt about that.”
Mr. Master further stated: “They’re replacement workforce is composed primarily of managers very few of whom have experience as recon file workers….“ These people have minimal training; fiOS installations are extremely complicated, one fiOS installation in one home takes six hours for an experienced person. The staffs cannot do that work, they are not going to know the shortcuts, they’re not going to know the most efficient way of doing things and they’re going to run into road blocks. I think they have a very very serious problem addressing their workload without our numbers on the job.”
Verizon Workers to Vote for a Series of Shareholder Proposals
The CWA announced, yesterday, that Verizon workers will vote for a series of shareholder proposals, to improve the mobile carrier’s corporate governance. The company’s workers own roughly $1.3 billion in its stock, IBEW and CWA members have also presented their recommendations to shareholders across the country, who own more than 60% of the mobile carrier’s shares.
Both of the unions have shared their shareholder recommendations with Verizon’s shareholders, across the country. The shareholder proposals include an appeal to change the company’s governance, the inclusion of an independent director as the Chairman, as well as mandatory shareholder approval for any future compensation agreements and other resolutions.
Workers have complained about Verizon’s recent decisions, and expressed their concerns about these decisions hurting the company’s long-term goals. Shareholders believe that the prolonged strike, unfulfilled FiOS network expansions, regulatory infrastructure investigations, and excessive executive compensations will severely impact the mobile carrier’s long-term position.
image
Workers and investors alike, have expressed their concerns over the strike. Thomas DiNapoli, who leads a public pension fund that owns $539 million worth of Verizon shares, recently sent a letter to the company’s CEO stating: “A protracted strike of this magnitude would undoubtedly affect the morale and productivity of Verizon employees. I am concerned that a disenfranchised workforce and the associated negative publicity may ultimately impact Verizon’s profitability.”
Analysts and investment firms have also expressed concerns, about the mobile carrier’s short-sighted business decisions that are likely to take a toll on Verizon’s long-term feasibility. The company’s decisions have led to research banks including Sanford Bernstein, Jefferies, Zacks, and ScotiaBank lowering Verizon’s ratings.
A fellow from the Roosevelt Institute, Mike Konczal, has estimated that the $5 billion spent by the company to repurchase stock, could have been better utilized by either installing FiOS for more than 10 million households, or by paying workers $28,000.