45,000 WORKERS ON STRIKE AT VERIZON

From Communications Workers of America (CWA), International Brotherhood of Electrical Workers (IBEW)

Aug 7, 2011

Company Refuses to Bargain Seriously, Verizon Proposals Would Take Workers Back Decades

CWA, IBEW, SEIU all active in strike

Washington, D.C. — More than 45,000 workers are on strike today at Verizon Communications. Bargaining continues. Since bargaining began on June 22, Verizon has refused to move from a long list of concession demands. As the contract expired, nearly 100 concessionary company proposals remained on the table.

As a result, CWA and IBEW have decided to take the unprecedented step of striking until Verizon stops its Wisconsin-style tactics and starts bargaining seriously.

Even at the 11th hour, as contracts were set to expire, Verizon continued to seek to strip away 50 years of collective bargaining gains for middle class workers and their families. 

Verizon strikers: Photo/peoplesworld.org

CWA and IBEW members are prepared to return to work when management demonstrates the willingness to begin bargaining seriously for a fair agreement. If not, CWA and IBEW members and allies will continue the fight.

Verizon financials

  • 2011 annualized revenues are $108 billion and annualized net profits are $6 billion.
  • Verizon Wireless just paid its parent company and Vodaphone a $10 billion dividend.
  • Verizon’s top five executives received compensation of $258 million over the past four years.

The contract covers 45,000 members of CWA and the International Brotherhood of Electrical Workers from New England to Virginia.

STATEMENT BY CWA

Aug 6, 2011

Washington, D.C. — Following is a statement by Candice Johnson, CWA Communications Director, on contract negotiations between CWA and Verizon. The current contract expires at midnight tonight:

“Negotiations between the Communications Workers of America and Verizon Communications are not moving forward. Contracts covering 45,000 Verizon workers are set to expire at midnight tonight.

Over months of negotiations, there has been no real bargaining by Verizon management. In fact, every major concession demand — more than 100 in all – remains on the table.

Even at the 11th hour, with contracts set to expire, Verizon continues to seek to strip away 50 years of contract gains. Following the game plan of Wisconsin, Verizon is trying to destroy the collective bargaining process by refusing to engage seriously on the issues.

In the few hours left before contract expiration, Verizon can show that it’s serious about bargaining. If not, CWA members and our allies throughout the union movement are ready for the fight.”

Verizon CEO Ivan Seidenberg

Verizon is sitting on big assets – it has $100 billion in revenue and net profits of $6 billion. Verizon Wireless just paid its parent company and Vodaphone a $10 billion dividend. Verizon’s executive compensation is sky-high, and Chairman Ivan Seidenberg is paid 300 times what an average worker earns. The top five company executives were paid more than a quarter of a billion dollars over the past four years.

The contract covers 35,000 CWA represented workers and 10,000 IBEW-represented workers.

Read updates at www.cwa-union.org/verizon

Media Inquiries

Candice Johnson, CWA Communications, 202-434-1347 (office), 202-415-6566 (cell), cjohnson@cwa-union.org, and Robert Master, CWA District 1, 212-344-2515 (office), 917-657-6483 (cell), rmaster@cwa-union.org

The Underbelly of the Proposed Verizon Strike: Why Customers Should Care 

By Bruce Kushnick, Chairman, Teletruth http://www.teletruth.org 

Executive Director, New Networks Institute, http://www.newnetworks.com

The Verizon Communications Workers of America (CWA) members are correct in worrying about the future. In the last two decades, there’s been over a 50% decrease in the number of employees-per-line, while there’s been a 100% increase in the Bell companies revenues. And construction in Verizon is down over 53% in the last three years.

Verizon customers are treated badly too

However, there’s an another dark side of this discussion that no one wants to talk about — How customers are being affected by staff cuts and slashes in construction budgets. Everyone knows that service has been declining and prices have been increasing, but the real scam is that instead of reinvesting in the networks and staff, Verizon is using the profits to fund excessive executive compensation and pay for massive overseas losses from bad investments.

Some customer examples?

When I called Verizon to pay my phonebill over the telephone, I was told that it would cost an additional $2.50 to use a credit card because Verizon was using another company to take credit card orders. With $67 billion in annual revenues, 227,000 employees, as well as a global presence that extends to the Americas, Europe, Asia and the Pacific, you would think that Verizon could take its own credit card payments over the phone.

When a customer’s phone service died last year, he found out that even though we live in a 24-7 world of the Internet, Verizon is closed on Sundays. —- And let’s not talk about the hassles once he wanted service restored. See: http://www.teletruth.org/About/newsletter/SexliesVerizon.htm

When a customer called his Internet Service Provider in New York City to order DSL, she was told that there wasn’t enough copper in her building to give her service. To read about the issues surrounding DSL and broadband see: http://www.newnetworks.com/PRISPPETITIONS.html

Verizon prices too high not because of workers but because of profits

And you would think that a strike of workers at Verizon would cost customers more money — “They’ll just raise our rates to pay for keeping staff”. The slap in the face is that even though there’s been over a 50% cut in the employees per-line since Verizon formed in 1984, the prices of services have continually increased. In fact, phone rates have nothing/little to do with the actual cost of service because of a number of regulatory-bam-boozles known as “Deregulation”.

Ironically, this “deregulation’ was granted because Verizon promised to upgrade everyone’s home and office to a fiber-optic service. In Pennsylvania, Verizon charged customers hundreds of dollars for fiber-optic upgrades they will never receive. Half of the state should have been rewired by 2004, including rural and suburban and urban areas equally. See: http://www.newnetworks.com/Libertybellstolen.htm

Every Verizon state has a failed broadband story to tell. See: http://www.newnetworks.com/tellthetruthverizon.htm

The truth is that this proposed strike is at the heart of what has turned into a nightmare at Verizon. A continuous stream of letters from workers and customers to Teletruth has convinced us that what should really be happening isn’t simply a strike by Verizon staffers, but maybe customers should also go on strike.

With a take-the-money-and-run mentality, good staffers are being replaced with inexperienced ones or there aren’t enough staffers to do specific jobs. The network is a mess. It is based on 100-years old copper wiring and parts of it are crumbling. The construction budget has been slashed and critical upgrades have not been done. In some parts of the New York City, there isn’t enough copper wiring to offer broadband or even second lines.

But what should annoy the reader is —How can Verizon continually cut staff and services, but continually raise rates and make more profits — profits which have gone, not to upgrades in the networks, but to pay for overseas losses and other global concerns, not to mention the debt they incurred from these ventures, excessive compensation for senior management, and funding their other competitive businesses, including offering DSL or their long distance service.

The network and its staff are essential, monopoly facilities for wireline phone services that are required to work at maximum performance for the good of the Public Interest. And while the hype is that there’s competition, the reality is Verizon is still a monopoly and still a utility. Verizon is now saying, we’re a private company and we can do what we want — screw the customers and our staff.

Teletruth believes that there should be more staff and a better training program, with real upgrades, not those mentioned in the press releases only.

From the customer perspective, there should be 24 hour-7 day-a-week repairs, prices should be based on costs and not some kind of voodoo economics, and when a customer has a problem, they should be compensated— with cash for their time and effort they spent without service or from the frustration that there aren’t enough workers and construction budgets to fix the problems.

When you hear the members of the Communications Workers of America complain about “job security” while Verizon says “we need “flexibility”, the undiscussed message to customers should be — Verizon is cutting staff to make more money and give us inferior services. And this harms both the workers as well as us. Imagine trying to do a job when there’s not enough people to cover the work, or upgraded network equipment to supply the ordered services.

And if Verizon is going to keep cutting staff and construction budgets, every customer should be asking — Why aren’t prices continually falling? If it’s not going to pay for staff and new construction, why aren’t we getting refunds or the services we were promised?

Let’s present some details: (Created for Teletruth by New Networks Institute)

According Verizon’s own quarterly reports, Construction Expenditures on local phone services have been cut 53% in the last three years and total staff has been cut 16%. (This is for the entire Verizon company. Staff cuts for local phone services have had much deeper cuts than the overall number.) In a report in 2002, CWA showed the entire situation is in serious decline in New York, both in terms of Verizon previous staff cuts and construction budgets being slashed. See: http://newnetworks.com/cwareportaugust2002.htm

On the staff side:

“In May, (2002) Verizon New York, Inc. (Verizon) announced that it would reduce its work force by more than 2,000 non-management employees. This reduction in force could include the layoff of all or some of these workers as early as September 2002. This downsizing occurs after Verizon had already reduced its force by approximately 3,000 workers through early retirement and attrition since the end of 2001. Thus, after the latest cuts, Verizon will have reduced its non-management workforce by almost 5,000 workers or 15.5% over an eight-month period and by 6,780 or 20% over a 20-month period.”

These staff cuts are on top of a series of reductions over the last two decades. In fact, there has been over a 50% drop in employees-per-line since the Bells took over local phone service. These new cuts put the networks in serious jeopardy for not only broadband but also phone services. To see more information on staff cuts throughout the Bell System see: http://www.teletruth.org/docs/unauthbiobook2.pdf

The CWA makes the observation that these cuts impact everything from our phone network security to the ability of Verizon to adequately handle competitors.

“The critical issue facing consumers, businesses, the general public and the PSC is that this particular reduction in force entails a significant decrease in the construction, maintenance, monitoring, testing and rehabilitation of the company’s infrastructure. The major consequences of these actions include the following:

  • Increasing risks to public health, safety and security due to the rising probability of network outages and the understaffing of the E911 system –particularly sensitive concerns given September 11, 2001;
  • Eroding competition due to the deterioration of Verizon’s infrastructure upon which competitors – especially resellers – depend and a decline in the quality of services delivered to wholesale as well as retail customers.
  • Adversely affecting economic development especially in relation to the deterioration of the company’s network infrastructure.

It gets worse because the condition of the network itself is now put into question due to large cuts in construction expenditures.

“In 2002, Verizon has cut its construction budget significantly. In the first half of 2002, Verizon reduced its capital expenditures by $803 million or 56% compared to the first half of last year. Verizon also has transferred many workers out of construction across the entire state. In many instances, Verizon has halted construction work.”

What’s really ironic is that Verizon was granted various increases in rates over the last decade and under ‘Alternate Regulations”, which does not look at the companies’ profits. Staff cuts and construction cuts make Verizon more money.

We also need to reemphasize that Verizon has been making various claims about rolling out and upgrading the networks to fiber-optics. These promises have proven to be nothing more than ways to increase their profits by gaming the regulatory system — promise them fiber and they’ll give you more money. To read Verizon’s fiber-optic track record see: http://www.newnetworks.com/tellthetruthverizon.htm

Instead, we have a situation where the lack of new construction is harming DSL services. There isn’t enough copper wiring to fulfill basic orders. (Communications Workers of America, August 29th, 2002)

“Verizon does not supply enough clean copper pairs to enable technicians to properly install new customer lines or replace defective pairs on existing customer lines. Instead, Verizon utilizes a “short term” technological fix called an AML or DAMLs.” AML/DAMLs cannot support DSL service. Also, competitors seeking to provide DSL to Verizon’s voice customers via line sharing cannot do so where an AML/DAML exists on a customer’s loop. Use of these temporary fixes therefore interferes with CLEC efforts to compete with Verizon in the DSL market.”

Bell Profits? You’re Being Charged For Losses Overseas, Excessive Executive Compensation And Funding DSL And The Bells’ Entry Into Long Distance And Wireless Services.

For a report on the Bell company’s profits, see: http://www.newnetworks.com/profitreport2002.htm

Local phone service is still one of the most profitable services in America. The exhibit below highlights findings from a Florida Public Service Commission report comparing the actual cost of various calling features to the price paid by subscribers. The Florida Commission found the profit margin on Bell South’s Call Waiting feature to be 48,680%. Caller ID, which cost the customer $7.50 per month, had a 3,264% profit margin.

Source: “Report of the Florida Public Service Commission on the Relationships Among the Costs and Charges Associated with providing Basic Local Service, Intrastate Access and other Service by the Local Exchange Companies in Compliance with Chapter 98-277, Section (2) 1 Laws of Florida, February 19, 1999.”

In New York, Call Waiting is $5.30 while Caller ID is $7.99. Many states, including New Jersey, still charge for Touch-tone service, a service that cost $0 to offer.

Ironically, instead of reinvesting this money in bringing to the public the Fiber-optic future that was promised, or even being able to get someone to fix your phone on a Sunday, what we have is an elaborate three-card-Monty game, where the profits from local phone service goes out of the states and into paying for a host of other items.

Competition and a Loss of Lines? Where?

Verizon keeps informing people of the harm they have via competitors and that they have been losing lines. — It’s a shame that they haven’t looked at their own Annual and Quarterly reports. Voice Grade Equivalents went up 10% over the last three years. Meanwhile, Competitive lines known as “UNE-P and Resale Lines” are only 5 million, about 3.6% of the total Verizon lines. In fact, Dividends paid to shareholders have continued to rise.

Executive Compensation: Senior Management Gluttony

While Verizon is cutting staff and benefits, there’s been Senior Management Gluttony – As a group, Verizon, (the merger of Bell Atlantic (NYNEX) and GTE) had the highest group pay and salaries and options with 6 executives getting $194 million in salaries and almost 15 million shares of stock, valued at $424 to $1.1 billion – This includes two CEO’s (GTE Charles Lee and Bell Atlantic’s Ivan Seidenberg.) From http://www.newnetworks.com/prcompensation2002.htm 

Top 6 Verizon Executives, 1999-2001

(In the thousands)

 

Salaries

Shares

Est. value

Est. value

Verizon

$193,638

14,756,166

 424,441

 1,019,324

         
  • Perks of the Job – Verizon gives its executives a number of perks, which include $31,000 to pay for club dues and memberships, personal use of the corporate aircraft, a car with driver, and an apartment.
  • Merger Related Executive Gifts – All executives received stock options and other ‘incentives’ for the various mergers. For example, the Verizon executives got $13 million in bonuses, while the CEO’s of Verizon and GTE got stock estimated at $56 million dollars.
  • How the Executives Control the Environment: Control the Board of Directors –According to the BellTell Retirees, the Verizon Board is “infested with conflicts of interest” and “at least eight of Verizon’s 16 directors are non-independent. In addition to the two co-CEOs, six outside directors are viewed as non-independent due to board interlocks or because their own employer receives grants, fees, or business from the Company, or did in the recent past”.
  • Golden Parachutes – Almost all of the executives have lucrative packages that guarantee almost as much money when the leave, including salaries, bonuses and even increases.

Recently, the Communications Workers of America posted their own stats about their bosses. See: http://www.cwa-union.org/verizon/exec_comp/

Foreign Losses and Write-offs

And where’s all the money going? Since 1999, Verizon has taken almost $25 billion dollars in write-offs, with the majority of this for mostly overseas and other investment losses. For some details about their spending see http://www.teletruth.org/docs/ForeignBellinvest.doc 

For example, in the second quarter of 2002, Verizon took a $1.4 billion write-off for their investment in Compania Anonima Nacional Telefonos de Venezuela (CANTV).

  “During the first quarter of 2002, we recorded a pretax loss of $1.4 billion ($1.4 billion after-tax) due to the other than temporary decline in the market value of our investment in Compania Anonima Nacional Telefonos de Venezuela (CANTV). As a result of the political and economic instability in Venezuela, including the devaluation of the Venezuelan bolivar, and the related impact on CANTV’s future economic prospects, we no longer expected that the future undiscounted cash flows applicable to CANTV were sufficient to recover our investment. Accordingly, we wrote our investment down to market value as of March 31, 2002.”

In 2003, the company wrote-off almost a billion dollars for losses from Iusacell, they took a $3.5 billion dollar write off for old equipment, and $1.2 billion dollar loss from changes in devaluation of some of their holdings.

The irony? — These losses lowered the amount of money Verizon paid the Federal government. In 2002, Verizon only had a 26.1% tax rate, with a $2.1 billion dollar tax benefit.

Pay Off Debt? And where is all the money that Verizon makes going after it bought various failed overseas properties that lost billions? Verizon took major loans and is now having to pay off their enormous debt. — This $8.6 billion dollar charge was in their second quarter report, 2003.

Repayments of long-term borrowings and capital lease obligations

$8,573,000,000

Illegally Funding DSL and Long Distance Services — Based on an upcoming report, it is now clear that Verizon has not been paying its fair share of competitive service and has been allowed to fund DSL through customer local phone service rates. In a recent Complaint filed in Pennsylvania, Teletruth found that $60 million dollars of customer-funds went to improperly pay for DSL rollout, which is defined by the FCC as a competitive, Long-Distance-Information service that is not regulated by the state. And it is clear this practice was not restricted to Pennsylvania. See:
http://www.newnetworks.com/prpenncomplaint.htm

Pressure on the Workers — and Falsification of Data.

The problems encountered by the CWA have been documented and discussed for years. For example, In November 2000, the CWA released a report, “Service Quality & Service Quality Reporting at Verizon – NY.” This report, requested by the New York Public Service Commission to examine service quality issues, is part of the ongoing Alternate Regulation plan that governs Verizon’s local phone services. Here is a litany of documented harm. Here is some information taken directly from the report: http://www.newnetworks.com/pressslccomplaint.htm

  • The Direct Falsification Of Company Service Quality Data By Management Over 30% of those surveyed have directly seen management change the status of trouble reports.
  • Management Directing Workers To Close Out Troubles Before They Are Actually Completed Over 60% of those surveyed have been directed by management to code a trouble as completed before it is really cleared of the trouble.
  • Management Directing Workers To Backtime Over 54% of those surveyed have been asked by management to backtime — to alter records identifying the date and time a trouble was completed.
  • Passing Installations Before Completion 91% of surveyed field technicians reported that they were dispatched on repairs of recent installations only to find that dial tone had never been provided.
    The report also highlights a series of very serious problems that affect quality of service:
  • Deteriorating Plant Equipment Due to a lack of investment in equipment, workers do not have the tools or materials needed to complete their jobs adequately and timely. Instead, the company directs workers to fix problems with “band-aid” approaches.
  • Lack of Experienced Managers New York Telephone eliminated thousands of experienced managers and lowered the benefits of those remaining. Consequently, few skilled workers apply for management positions. New managers have few if any technical skills and are therefore unable to properly respond to technical problems, coordinate the work force or train new workers.

Recently, the Public Service Commission decided to start an audit of the Service Quality Issues and suspend raising rates until the company improves service. (Docket 03042/02C0543;00C1945) See: http://www.teletruth.org/docs/servicequalitydoc13376.pdf

“In response to concerns about the quality of telephone services provided by Verizon New York Inc. (Verizon), the New York State Public Service Commission voted today to initiate a service quality proceeding that will include an independent audit focusing on the adequacy of Verizon’s long-term service quality improvement efforts. Further, the Commission decided to direct Verizon to file tariffs suspending the company’s pricing flexibility and to file a service improvement plan that envisions attainment of all five service quality objectives in the second year of its current regulatory plan, the Verizon Incentive Plan (VIP).

In short, besides backing the CWA in fixing the current worker problems, Customers may want to strike to have the money for local phone service be worth the fees we pay and not fund overseas losses, excessive executive compensation or funding other Bell services.

To repeat,

Teletruth believes that there should be more staff and a better training program, with real upgrades, not those mentioned in the press releases only.

From the customer perspective, there should be 24 hour-7 day-a-week repairs, prices should be based on costs and not some kind of voodoo economics, and when a customer has a problem, they should be compensated— with cash for their time and effort they spent without service or from the frustration that there aren’t enough workers and construction budgets to fix the problems.

And if Verizon is going to keep cutting staff and construction budgets, every customer should be asking — Why aren’t prices continually falling? If it’s not going to pay for staff and new construction, why aren’t we getting refunds or the services we were promised? 


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One Response to 45,000 WORKERS ON STRIKE AT VERIZON

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