Bloomberg News

Verizon Unions to Offer Health-Plan Consolidation to End Dispute

September 30, 2011

Sept. 30 (Bloomberg) -- Verizon Communications Inc. unions representing 45,000 workers are preparing to propose the consolidation of health-care plans next week, as a step toward ending a labor dispute that began over the summer.

The unions will suggest putting their members on the same health plan, which would save the company money, rather than asking them to begin paying premiums, said Bill Huber, a business manager for the International Brotherhood of Electrical Workers. Verizon and the unions haven’t been able to reach agreement on a new contract since the old one expired in August. Workers went on strike Aug. 7 and later returned to their jobs as negotiations continue.

The unions also plan to protest and pass out leaflets at Verizon Wireless locations and Apple Inc. stores next week, during the expected launch of the next iPhone. Workers will ask consumers to delay buying the iPhone 5 until Verizon agrees to a new contract.

“We have no illusions that just because we’re going to put a new proposal on the table they’ll say, ‘Great, accept it.’” said Bob Master, political director for the Communications Workers of America. “This is a big step up to intensify pressure on the company. We’ll use every tactic at our disposal.”

The proposal would be a step in the right direction, said Rich Young, a spokesman for Verizon. The company deals with more than 12 health providers, and workers in some regions can choose from as many as five plans, he said.

“As we strive to modernize, to change our wireline business, this is an area that could help greatly,” said Young. “It’s not cost-effective to have more than a dozen different plans in different states.”

‘Encourage’

Young declined to say whether Verizon would accept the proposal. He said the company still wants workers to contribute more towards their health-care costs, including by paying premiums. The company spends $400,000 an hour on employee health care, he said.

Verizon Chief Executive Officer Lowell McAdam said last week at an investor conference he was encouraged by the unions’ progress since they returned from the strike in August. He has said the company needs concessions from unions because of the landline division’s customer losses and eroding profitability. The company’s wireless business was largely unaffected by the strike.

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.

--Editor: Peter Elstrom, Niamh Ring

To contact the reporters on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus