Coverage: Verizon strike settlement allows for pay raises, jobs

Verizon reached an agreement during the holiday weekend to settle a strike by the union representing about 40,000 workers, with both sides claiming victory.

Noam Scheiber of the New York Times has the day’s news:

The agreements reached on Sunday and Monday between Verizon and two major unions will most likely bring to an end the work stoppage, which began on April 13. The striking members in both unions, the Communications Workers of America and the International Brotherhood of Electrical Workers, must now vote on the agreements. That is likely to happen in the next two or three weeks, and they are widely expected to approve them. They will return to their jobs beginning on Wednesday as part of a short-term “back-to-work agreement.”

“This contract is a victory for working families across the country and an affirmation of the power of working people,” Chris Shelton, president of the Communications Workers of America said in a statement.

The four-year contracts would give workers a nearly 11 percent increase in pay over all, up from the 6.5 percent increase that Verizon had proposed before the strike, as well as modest ratification bonuses and profit-sharing.

Verizon had long argued that it needed to cut costs and increase its flexibility to manage its work force and preserve the competitiveness of its wireline business, which includes landlines, video and Internet service that run through wires.

Alanna Petroff of CNNMoney. com emphasized that the company agreed to hire new workers:

As part of the deal, Verizon also committed to hire 1,400 new employees, with the vast majority set to be based in call centers on the East Coast.

“We’re especially proud of our commitment to 1,400 new hires — high quality and well-paying American jobs,” said Verizon’s chief administrative officer, Marc Reed.

Most of the employees represented in the labor negotiations work in call centers and maintain the Verizon fiber optic network, called FiOS.

U.S. Labor Secretary Thomas Perez had to intervene as the dispute dragged on.

The main sticking points were over complaints about working conditions, call center closures, pensions and jobs getting shipped overseas.

Chuck Mikolajcak of Reuters focused on how Verizon will try to sell its Wireline business now that the strike is over:

“They needed to end the strike and they bit the bullet,” said Roger Entner of Recon Analytics. He said he thinks the deal “reinforced their commitment to basically exiting” wireline, which he called “the least profitable, most problematic part of the business”

The new contract “gives Verizon four years basically to get rid of the unit. Let it be somebody else’s problem,” Entner said.

But not all analysts saw the deal as the first steps in an eventual sale of the wireline business.

“That is an option available for Verizon,” said Jim Patterson, CEO of Patterson Advisory Group. “However, their recent investment in XO (fiber-optic business) would seem to indicate that infrastructure is becoming a more vital part of the business.”

Nearly 40,000 network technicians and customer service representatives of the company’s Fios internet, telephone and television services units walked off the job on April 13.