Experts say Verizon unions played trump card, but lost

Joe Napsha
| Sunday, Aug. 28, 2011

A two-week strike by 45,000 Verizon Communications Inc. workers that ended last week with no winners is a shining example that work stoppages may be futile in this economic environment, experts said.

"Labor played its main card, and it is very doubtful it achieved what it wanted to," said James Craft, a labor expert and business administration professor at the University of Pittsburgh's Graduate School of Business. "You don't play a trump card, and then just go back to work" without winning any concessions from management, Craft said.

The strike by the two unions should make other unions "very cautious in the options" they choose in a labor dispute, said John Russo, a Youngstown State University professor and coordinator of its labor studies program.

"Given the legal and economic environment, and the power of the employers, strikes are not the best weapon," said Russo, who teaches a course in labor law and negotiations.

Workers represented by the Communication Workers of America and the International Brotherhood of Electrical Workers returned to their jobs as technicians, repair persons, customer service and call center employees in Verizon's landline business on Aug. 22 -- without an agreement on a new labor contract.

Verizon and its unions are scheduled to return to the bargaining table on Wednesday, according to the CWA.

Union members -- who work in Verizon's shrinking landline telephone business -- went on strike Aug. 7 because of company demands that they pay part of their health insurance premiums and move retirement benefits from a traditional defined benefit pension plan to a defined contribution plan, such as a 401(k), to reduce the company's retirement costs.

"I don't think there were any winners in the strike," said Roger Entner, a telecommunications expert and head of Recon Analytics LLC of Dedham, Mass. Verizon Communications did not win the concessions that they wanted from workers, nor did the unions get Verizon to change its stance on the need to slash its labor costs, Entner said.

While acknowledging that neither side "won" the strike, Thomas Crawford, regional vice president for the Communications Workers Local 13000 in Carnegie, said the walkout achieved what the unions wanted.

"We got a commitment from the company for 'realistic' bargaining. ... Before the strike they did not budge in their concession demands. They wanted to implement them, not negotiate them," Crawford said.

Whether they got a commitment from Verizon to return to the bargaining table, labor economist James Sherk at the Heritage Foundation in Washington, said the strike could not succeed because it could not hurt Verizon's most profitable business -- Verizon Wireless, the nation's largest cell phone operator.

Verizon Wireless serves 89.7 million customers. It is a joint venture, with Verizon Communications owning 55 percent of Verizon Wireless and Britain's Vodafone owning the rest.

"The strike isn't a powerful enough of a weapon to shut down a company," and doing it to return to work "is not a strong outcome," Sherk said.

In Sherk's view, the strike by the Communications Workers and IBEW are another indication that unions are becoming less relevant -- less than 10 percent of private sector workers are union members. The unions raise the company's labor costs and do not add value to the employers in today's competitive global environment, Sherk said.

Russo, however, said the walkout was important "for the union to say they did put up a fight ... to show dissatisfaction with what is going on."

A company such as Verizon, which reported $10.2 billion in profit for 2010, wants concessions from its workers, Russo said.

"It take a special kind of militancy to at least show a willingness to strike," said Perry Blatz, a labor history professor at Duquesne University and co-author of "Keystone of Democracy: History of Pennsylvania Workers."

Retired Indiana University of Pennsylvania labor studies professor Charles McCollester sees more of an inclination among labor to fight "because no one is going to do it for them," certainly not political leaders.

"I think there is a lot of anger out there, and no one is championing their cause," said McCollester, a union leader at the former Union Switch & Signal plant in Swissvale when it waged a seven-month strike in 1981-1982.

For political reasons, labor union "leadership can't say it will just give it (benefits) up," Pitt's Craft said.

If labor unions are willing to grant concessions without a strike, "more and more workers will ask 'what's the point of being a member?'," Blatz said.

Verizon Communications, which saw its 2010 earnings fall about 12 percent, had to push hard to cut costs because, "the landline business is in terminal decline," said Entner Recon Analytics.

"Verizon wants to bring those costs in line with the falling revenue from that business. They're losing millions of (land) lines every year," Recon said.

The unions took the position of defending a level of benefits -- a defined benefit pension plan and no payment on health care insurance premiums -- that "most of today's American workers have never had," Entner said.

"The landline employees have contracts (with benefits) that are distant memories for most of us," he said.

Verizon's public relations campaign -- highlighting the fact that its 135,000 nonunion employees already make contributions to their health care insurance -- was a brilliant move, Craft said.

While neither the CWA nor the Electrical Workers would admit to it, Entner believes that Verizon's announcement on Aug. 16 that strikers would lose health care benefits if not back on the job by the end of August, was a key factor in ending the walkout. Three days later, the unions announced they would return to work.

"Connect the dots," Entner said.

Sherk predicted that when the labor dispute finally ends, the union will, in fact, "make some concessions on benefits."

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