Aug. 10 (Bloomberg) -- The Communications Workers of America, which represents 35,000 workers at Verizon Communications Inc. out on strike, appealed to Congress for support in the four-day-old labor dispute.
“We ask you to write Verizon President Lowell McAdam and urge him to respect collective bargaining rights and not to destroy middle-class jobs,” the union said in a letter sent yesterday to congressional offices in the northeast and mid-Atlantic regions, where about 45,000 workers began striking Aug. 7. The International Brotherhood of Electrical Workers represents about 12,500 additional Verizon who have walked out.
Verizon, the second-largest U.S. phone company, yesterday also sent a letter to congressional offices in affected districts as well as leaders in both houses of Congress.
“The world is changing,” the New York-based company said. “Verizon and its union-represented employees need to work together to adjust rules and policies that threaten to limit the company’s ability to compete in the broadband marketplace.”
Verizon’s conflict with the two unions escalated yesterday with workers staging protests and the company saying it will offer $50,000 rewards to stop vandalism.
Workers picketed Verizon locations throughout its region, with more than 200 gathering in front of the company’s New York headquarters. The workers in Manhattan booed as people walked in and out of the office and chanted, “When they say, ‘give back,’ we say ‘fight back.’”
Verizon said it will begin advertising the rewards for information about vandalism to its network and equipment after at least a dozen acts of sabotage. The advertisements will begin in local markets today, said Peter Thonis, a company spokesman.
In Delaware, Verizon yesterday filed a lawsuit against local unions that asks a state judge to issue injunctions to stop demonstrators from blocking entrances in Newark and Dover, Delaware, shutting off power, and using “crazy glue” to jam fence mechanisms and service-truck locks.
Verizon “has suffered serious disruption and curtailment of its business” from the strikers’ acts, according to its complaint filed in Delaware Chancery Court in Wilmington.
The CWA said in a statement Aug. 8 that it “does not condone illegal action of any kind, and instructs its members to conduct all strike activities in accordance with labor law.”
Verizon and the unions are at odds over a new contract to replace one that expired at midnight on Aug. 6. The company, facing a decline in its traditional landline phone business, is seeking work-rule changes and monthly health-care payments. Workers contend they shouldn’t have to make substantial concessions as profits rise and executive pay remains healthy.
Verizon is having “high-level” negotiations with the unions, Thonis said in an interview. The striking employees represent about a quarter of Verizon’s staff.
Verizon’s stock may drop during the strike, though it may recover once the action is over and therefore not be harmed in the long term, based on its pattern during a labor dispute in 2000, said Jonathan Atkin, an analyst at RBC Capital Markets in San Francisco. He rates Verizon shares “outperform.”
The company’s larger and more profitable wireless unit is unaffected by the strike.
Verizon fell 63 cents, or 1.8 percent, to $33.66 at 4:02 p.m. in New York Stock Exchange composite trading. The shares have declined 5.9 percent this year.
The company has trained more than 40,000 managers and contractors to step into the roles of union workers and minimize any delays or disruptions in service calls and installations.
In an Aug. 7 statement, McAdam, Verizon’s president and chief executive officer, said the company needs concessions from unions because of the division’s customer losses and eroding profitability. He also cited competition from cable-TV providers that don’t have similar “contract constraints, enabling them to be more nimble and flexible meeting customer needs.”
Verizon’s competitors also include AT&T Inc., the biggest U.S. phone carrier and second-largest wireless operator. AT&T has proposed acquiring Deutsche Telekom AG’s T-Mobile USA, allowing it to surpass Verizon Wireless as the No. 1 U.S. mobile carrier.
In an interview last month, McAdam, 57, said changing the union contract would benefit workers because lower costs would help the business compete.
“If we do that, I think the union will have a much stronger future because the company will be stronger,” he said.
Verizon’s revenue and profit fell last year as declines in the landline business offset growth in wireless. The number of fixed lines, including residential and business customers, slid 8.2 percent to 26 million at the end of last year, extending declines since 2003. During the same period, wireless subscribers more than doubled to 94.1 million.
First Since 2000
The strike is the first at Verizon in 11 years. Although Verizon’s unions authorized walkouts in 2008 and 2003, they haven’t gone out on strike since 2000. That 18-day standoff affected 28 million customers and cost Verizon $40 million in revenue. The company settled the dispute by agreeing to a 12 percent wage increase over three years.
At the New York protest yesterday, Dennis Swarbrick, a 54-year-old technician who said he has worked at Verizon for 20 years, said he is concerned about the company’s demands because his son is going to college in a few weeks and he has other financial obligations.
“I have a mortgage,” he said. “I have car insurance. I work week to week. What am I going to do next week when the bills come?”
Laura Randall, a technician who said she has worked at Verizon for 11 years, said forgoing pay in order to strike “is going to hurt,” though she plans to picket Verizon locations “as long as it takes to get a fair deal.”
The lawsuit is Verizon of Delaware Inc. v. Communications Workers of America, CA6766, Delaware Chancery Court (Wilmington).
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