This made absolutely no sense. Why look for trouble where there was none? The should have just renewed the existing contract. As a long time manager I have seen a lot of dumb moves at Verzizon and predecessor companies. Even Dilbert has its roots in the phone company roots of its artist. But not renewing this contract ranks as one of the dumbest, most un-necessary self-inflicted wounds.
Harvard Business School will likely write one of their famous case studies, which are used by most of the other business schools, on the bad econimics of this decision to force a strike and showdown with the union in order to break it. Why? Because LowMac does not like the union.
So lets look at this. The company is making a good profit in troubled times. Revenue growth is modest, but then again, we really sell a commodity. Apart from taking customers from competitors due to better prices, services or quality - the only other read growth would be likely due to population growths. So we have a stable business, which is highly profitable even during difficult economic times, that picks a fight with its union. Result poor public image, poor customer service, angry work force and customers, increased costs, reduced efficiency and profit.
Stupid move!