CWA, IBEW unions are 'cautiously optimistic' about Consolidated's FairPoint acquisition

A CWA demonstration
CWA members rally in 2014 during Verizon contract negotiations. (Image: CWA)

As Consolidated moves ahead with its acquisition of FairPoint, the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) say they will carefully monitor the two companies as they work to close the deal.

Leaders of the CWA and IBEW said in a prepared statement that they are looking closely at Consolidated Communications’ finances, technical capacity, and history of labor relations as well as at the regulatory requirements for the sale.  

Peter McLaughlin, business manager of the IBEW Local 2327 in Maine, said the union views this sale with “cautious optimism.”

“We are hopeful that Consolidated will work with us to create and maintain good jobs in our communities and really improve the quality of service that our customers deserve,” McLaughlin said in a release responding to Consolidated’s announced acquisition of FairPoint.

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The unions said that while they are hopeful, they will closely examine the progress Consolidated makes in purchasing FairPoint and how it will maintain service quality.  

“Our members and our customers have been through the ringer with FairPoint over the last eight years, and our primary concern is that this transaction result in a more stable company that puts a priority on strengthening communities, not enriching Wall Street hedge fund owners,” said Don Trementozzi, president of CWA Local 1400.

Job security concerns

A key concern of the CWA and IBEW union members is maintaining job security.

In November, FairPoint announced it would lay off nearly 10% of its workforce due to ongoing declines in its legacy TDM service business lines. A particular pain point for FairPoint was a double-digit decline in traditional voice customers over the past year.

McLaughlin said the workforce cuts come at a time when state “regulators continue to investigate their service quality failures.”

When FairPoint began the process of acquiring Verizon’s Northern New England properties in 2007, the unions partnered with community groups to “Stop the Sale” of Verizon to FairPoint. At that time, the unions predicted the sale would be devastating for workers and consumers, but the sale went ahead and FairPoint later declared bankruptcy in 2009.

Later in October 2014, the company’s cost cutting efforts, in which it reduced pay and benefits and hired unlimited contractors, prompted a four-month strike. During the strike, 1,700 union workers in Vermont, New Hampshire and Maine chose to strike over concessions the company wanted CWA and IBEW to make related to pay, pension and health care contributions.

At that time, the union workers chose to strike two days after FairPoint froze workers' pensions in favor of 401(k) plans going forward and imposed a contract that requires workers to contribute to health care costs; other provisions would allow the company to hire contractors and eliminate retiree healthcare benefits.

Leaders express union support

Leadership from Consolidated and FairPoint expressed support for the union’s workforce during the call announcing the acquisition.

Paul Sunu, CEO of FairPoint, said that while it has not talked to the unions yet, the two companies will be meeting with CWA and IBEW leaders soon.

“No communications were shared before the announcement went out,” Sunu said. “When the press release occurred, we did reach out making them aware of the announcement and our external affairs teams are in the process of connecting up with the various leaders in the states.”

Bob Udell, CEO of Consolidated, said it has a lot of experience in dealing with unions in existing markets and expects to take a similar process.

“The union representative bargaining unit in our network has worked with unions through our roughly 60 year history of having unions in Illinois, Texas, and Pennsylvania,” Udell said. “We’re very comfortable in those negotiations and we’re known to be fair, we have a good track record for employees and the company and don’t expect anything to be different in this situation.”