US West Strike Comes During Time of Change at Baby Bells
The specter of downsizing and cost-cutting in the increasingly competitive U.S. telecommunications industry has prompted labor officials to call the second major phone strike in a week.
The union that represents 34,000 of US West Inc.’s employees walked off the job at 12:01 a.m. Sunday after contract negotiations collapsed over the issues of forced overtime, a change in health benefits and an incentive-pay program. Denver-based US West, the sixth-largest phone company with 25 million customers, operates in 14 Western states but not in California.
The action comes exactly one week after the same union, Communications Workers of America, and its 73,000 local members struck Bell Atlantic Corp., the largest U.S. regional phone company, before agreeing to a contract two days later.
With most of the nation’s telecom companies reporting quarter after quarter of uninterrupted growth, analysts say they understand why union officials would demand a greater share of the profits. But, as smaller, usually nonunion, firms begin to eat into the regional Bells’ market share, the Bells are girding for increased competition ahead.
“The Baby Bells are downsizing and cutting costs right and left to prepare for the onslaught of competition in their business,” said analyst Jeffrey Kagan of Kagan Telecom Associates in Atlanta. “Workers want things to be the same way they always have been.”
In the case of US West, workers contend they would be made to work longer workweeks without overtime pay. Also, the company is pushing a pay-for-performance package that would require new employees to meet certain performance goals or risk losing their annual wage increases.
US West said its latest offer would increase wages by 17.5% over five years, with a 3.85% increase in the first year of the contract. It also said it would raise pension benefits by 20% over five years, with a 6% increase in the first year.
“The union is turning its back on a plan that is the largest pay and benefits package in the industry,” US West spokesman David Beigie said. The pay-for-performance program would be voluntary for current employees, he said.
However, the union contends that the pay-for-performance plan would hurt its members, especially technicians who typically spend their day in the field dealing with customers and have little control over the length of time needed to complete assignments.
“It’s poorly thought-out,” CWA spokeswoman Candice Johnson said. “The company doesn’t have a handle on how [technicians] do their jobs.”
CWA also said the latest offer would slash medical benefits.
On Sunday, both sides met separately with a federal mediator. However, no date was set for talks to resume.
US West said about 15,000 managers have stepped in to maintain service. The company said it expects some service interruptions, including directory assistance, repair and installations. Local and long-distance communications are unlikely to be affected.
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Bloomberg News was used in compiling this report.
