Wall Street Journal: A Smaller Strike at Verizon Wireless

By GREG BENSINGER, WSJ.com

Verizon Communications Inc.'s argument to striking wireline workers is they have to accept deep cuts to benefits to help offset falling sales at its traditional phone business, but 70 striking union members are mounting a different fight—they work for the company's highly profitable wireless unit.

While most of the 45,000 Verizon workers who were on strike for a fourth day Wednesday are employed by the company's land-line business, a tiny portion—less than 0.2%—are part of its Verizon Wireless operations, a legacy from a merger 15 years ago. These employees, who are the only unionized workers at the wireless arm, are part of the striking Communications Workers of America union but are negotiating separately with the company.

"Verizon can't tell us they're losing customers, they can't tell us they're not one of the most profitable companies in America," said Dan Gutierrez, a CWA Local 1101 member helping to lead negotiations on the wireless agreement. "I don't see a reason why we can't get a better contract."

The two sides haven't talked formally since Saturday night. Negotiations have taken place at a Hilton hotel in Pearl River, N.Y., about 25 miles west of where the wire-line negotiations are underway.

A Verizon spokesman said the company doesn't comment on proposals that are specific to any union local. "They'll be negotiated in the same way that we negotiate with all the others," spokesman Rich Young said.

As more consumers cut their home phone service, Verizon's unionized land-line employees—represented by the CWA and International Brotherhood of Electrical Workers—are being asked to freeze pension accruals, with no pensions for new hires, and to contribute at least $100 per month to their health-insurance premiums, among other items.

The group of 70 wireless workers, by contrast, has already had pension accruals suspended, with no pensions for new hires, and its members already pay variable monthly rates towards their health-care premiums.

Their benefits generally match those of nonunion employees on the wireless side, which has about 84,000 employees.

Among the wireless workers' demands are a cap on their monthly health-care expenses, a restoration of the Martin Luther King Day holiday and increased pay for a special shift on late nights and weekends to help resolve emergencies. The wire-line workers, on the other hand, have been asked by the company to do away with holidays for Martin Luther King Day and Veterans Day.

Verizon said unionized wireless workers are eligible for a 7% annual bonus, a perk not available to nonunion workers.

Verizon Wireless, co-owned by Vodafone Group PLC, posted a 10% increase in first-half revenue, to $34.2 billion, following a 5.1% rise for all of last year. Meanwhile, the wire-line business, which includes home and business telephones as well as FiOS Internet and cable, saw revenue slump 2.9% last year and 1.2% in this year's first six months.

Verizon Wireless boosted its subscriber rolls by 2.2 million in the second quarter, double that of rival AT&T Inc., and began selling the Apple Inc. iPhone for the first time this year.

"They seem to have only one issue, they want us to go to merit-based pay," rather than wage increases tied to seniority, said Mr. Gutierrez, 41, a technician and 16-year veteran of the company, saying that accepting the demand would erase decades of gains won by union workers. Mr. Gutierrez said he is hoping to reach at least a three-year agreement with Verizon.

An organizing drive 15 years ago led to about 50 wireless union jobs in the New York City metropolitan area, for what was then a nascent business for the company.

The wireless union group, which services cell sites and phone-call switching stations in Westchester County, Long Island and New York City, has grown to 70 from the roughly 50 in 1996, when it was formed amid the merger of Bell Atlantic and Nynex, which created a predecessor to Verizon Wireless, said CWA Local 1101 Secretary Jim Trainor.

Mr. Trainor said he asked for a 50% wage increase for on-call workers, to $300 weekly, and said Verizon proposed a change to $203.

"We got nowhere on Saturday, we got nowhere since we started talks in June," Mr. Trainor said. "We're happy to return to the table."

Verizon has dispatched tens of thousands of nonunion workers to fill in for the striking workers—including a few devoted to wireless operations—to keep the network running smoothly, though the company said customers may see some delays in installations or other services.

Write to Greg Bensinger at greg.bensinger@dowjones.com

This article originally appeared here on WSJ.com.