A high level Verizon (NYSE: VZ) executive says that the telco expects that, due to the changes they want to make in order to control costs, the negotiation process with union workers represented by the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) will take time to complete.
Speaking to investors during the second-quarter earnings call, Fran Shammo, EVP and CFO of Verizon, said that contract negotiations could extend beyond the termination of the current contract, which runs out on Aug. 1.
"Given the level of change we are seeking with respect to benefit cost management as well as work rules, our expectation is that the negotiation process will take some time," Shammo said during the earnings call, according to a Seeking Alpha transcript. "As you know, it is not unusual for negotiations to continue well beyond the expiration date of the contract, which is August 1."
The service provider is working through a total of 27 collective bargaining agreements covering nearly 38,000 employees in its Eastern territory. In June, the service provider proposed a new agreement covering these workers that included three elements: a 2 percent wage increase effective Aug. 2, 2015; a 2 percent increase one year later; and a $1,000 lump sum payment in the third year.
"We began formal negotiations on June 22 and to jump start the negotiations, the company put forth a comprehensive offer on the table, which included wage increases and changes to current contracts to help us manage our cost and increase our flexibility to better serve our customers," Shammo said.
However, the CWA and IBEW quickly dismissed the proposal. CWA District 1 Vice President Dennis Trainor said in a statement that the telco's proposal was a "smokescreen designed to hide the harsh reality of their concessionary demands" around pension benefits, medical benefits, and job security.
Shammo said that the service provider will continue its negotiations with the CWA and IBEW, but would not provide any specific details about how the process was going.
"We intend to work through the process until we achieve a new agreement that addresses the needs of our business and preserves the high quality of our jobs for our employees," adding that "It's early on and we still have a lot of work to do."
Negotiations between Verizon and the unions have been contentious. The CWA said during a meeting last week that local unions are "in the process of conducting a Strike authorization vote."
A Verizon spokesperson told FierceTelecom that while union leaders can call a strike authorization vote, the company said it will "remain committed to negotiating in good faith on a new contract that's in the best interest of our employees, our company and our customers."
- see the earnings transcript (sub. req.)
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