Verizon Strike 2011: A Sign of the Times as Americans Go Wireless
Twenty-seven percent of U.S. has gone all-cellular.
Aug. 9, 2011 — -- The Verizon strike -- 45,000 union workers pitted against one of the giants of telecommunications -- showed no outward signs of ending today, and analysts said it may be a sign of the times, part of a seismic shift in the way people now link electronically with the rest of the world.
The strikers, members of the Communications Workers of America and the International Brotherhood of Electrical Workers, say they are trying to protect their pensions and health care benefits, which Verizon wants to cut. As the strike continues, Verizon customers from Massachusetts to Washington, D.C., who need their landlines fixed, will have to wait for fill-in workers to come to their rescue.
But the simple fact is there are fewer and fewer landline customers. The industry says 27 percent of Americans no longer have landline phones -- a number that has jumped in the past few years. They've moved solely to cellular service, a booming business for Verizon and other market giants.
"The wireline business is slowly but surely dying," said Roger Entner, the founder of Recon Analytics in Dedham, Mass. "Wireline is losing money.
"Verizon is trying to lose as little as possible," he said. "On the other side, what the unions are trying to do is defend what they have."
Verizon Wireless is not part of the strike; it is a separate company, 45 percent owned by Vodafone Group. Significantly, it is a nonunion operation.
The Effects of Progress
"Even at the 11th hour, as contracts were set to expire, Verizon continued to try to strip away 50 years of collective bargaining gains for middle-class workers and their families," said the two striking unions in a statement.
"We are out here fighting for our bargaining rights, said Sharon Bleach, 52, who has worked at Verizon for 25 years. "They want to take away our pensions, our medical. They want to cut our pay."
Verizon managers stood their ground.
"We've put important issues on the table, and we're willing to negotiate," said Verizon spokesman Richard Young. "However, the unions were unwilling to negotiate on anything that's critical."
Verizon CEO Lowell McAdam sent a letter to company management that was made public. He said that corporate profitability had been declining for a decade, along with the number of landline customers.
"We're asking our union-represented employees to help us on a variety of issues that could streamline our processes and further reduce our wireline cost structure while keeping their overall compensation and benefits among the best in corporate America," McAdam said in the letter. "It is clear that some of the existing contract provisions, negotiated initially when Verizon was under far less competitive pressure, are not in line with the economic realities of business today."
Phones and data transmission connected to wires are not about to go away. Only a few years ago, Verizon was aggressively expanding its FIOS fiber-optic service, which combines Internet, television and phone lines in one package. But those who have cut the cord are mostly younger and more affluent than those who have stuck with traditional service.
Entner, the industry analyst, said he had some hard-hearted advice for the striking workers: "Look for a different job.
"This is the economic reality," he said.
The Associated Press contributed to this story.