With a contract deadline of midnight August 1, Verizon (VZ) and representatives of its 39,000-member union work force have four business days to reach a deal and avert a strike, which would hit consumers from Massachusetts to Virginia. The bargaining units involved serve the telecom provider's legacy landline and FiOS Internet and cable operations. Back in 2011, the same bargaining units went on a strike that lasted for two weeks.
The strike threat looms as the national migration continues away from the traditional copper land lines to cell technology. In addition to losing market share to wireless, Verizon's wireline business is facing increasing competition from voice over Internet protocol, or VOIP, providers. Wireline currently accounts for 30 percent of Verizon's revenue.
"Negotiations are going poorly," said the Communication Workers of America's Bob Master. "We are far apart." Master said management's initial offer would undermine job security, reduce pension benefits and increase health care costs for union workers from the CWA and the International Brotherhood of Electrical Workers. Union officials said 80 percent of the rank and file voted to go on strike if talks failed.
The states that could be affected by a strike are Connecticut, Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia and Washington, D.C.
"Verizon made $9.6 billion in profits in 2014 and reported $4.4 billion in profits just in the 2015 second quarter alone," said Dennis Trainer, vice president of CWA District One in a statement. "Their demands are completely outrageous and unwarranted."
The IBEW and CWA are also trying to find common cause with New York City consumers by protesting what the unions call a botched rollout of Verizon's popular high-speed FiOS fiber-optic network because they say it bypassed lower-income neighborhoods. An audit by New York City released last month did blast Verizon for failing to live up to its franchise agreement and for "persistent intransigence and delay" of the rollout.
"This is a situation where the workers and consumers interests are totally aligned," said the CWA's Master. "If the consumer doesn't get FiOS, we don't get the jobs."
"We have already brought FiOS to millions of New York homes and businesses," countered Verizon spokesman Rick Young. "We have had challenges when landlords won't give us access to their buildings."
As far as that initial management offer, Young said the company did offer a raise. "We have put a 4 percent wage increase on the table," he said. "But many of our union contract provisions are decades old and don't reflect a changing industry where consumers no longer have to rely on a landline."
Young said Verizon union network technicians were currently getting paid $160,000 a year on average in total compensation, including salary, pension and health care. "These positions will remain great upper-middle-income jobs," he added.
Young also noted that health care costs were an issue that management was zeroing in on. "Our nonunion workforce health care plan cost averages about $16,700 per family compared to what the union work force costs per family, which can range from $20,000 to $24,000 a year."
In 2011 when Verizon workers returned to work after their two-week strike, it took another year of negotiations before a deal was reached. It included an 8 percent pay hike over four years and a concession to have new union hires switch from the traditional pension benefit to a 401(k)-style retirement savings plan.