(The Boston Globe posted the following story by Peter J. Howe on its website on August 14.)
BOSTON — Seeking to escalate pressure on Verizon Communications Inc. to reach a contract settlement, the phone company’s Eastern unions and the AFL-CIO yesterday kicked off a campaign to recruit labor supporters to switch their phone service from Verizon to AT&T and deprive Verizon of potentially $800 million in annual revenues.
While labor leaders described it as an innovative tactic, several industry analysts said it appears to be a self-destructive gambit that, if it succeeds to any significant extent, could force Verizon to lay off workers whose jobs the unions are fighting to protect. Unions are continuing to negotiate for a contract for 79,200 workers whose labor agreements expired Aug. 2. “On the bonehead scale, this is about a nine,” said Paul Harrington, a Northeastern University economist and associate director of its Center for Labor Market Studies. “Ultimately, this would be a counterproductive strategy that will undermine the unions’ bargaining position. This strategy is very antagonistic to the hallmarks of successful industrial relations,” where unions typically try to help their businesses grow to benefit their members, Harrington said.
Lisa Pierce, a telecommunications analyst with Forrester Research in Cambridge, said: “I don’t see this as a very good tactic. It’s like cutting off your nose to spite your face. If enough people do make the switch, it gives Verizon ammunition” to press for more concessions and layoffs.
Larry Cohen, senior vice president of the Communications Workers of America, which represents more than 57,000 workers from Maine to Virginia negotiating a new contract, said the CWA and AFL-CIO are not pushing to have union supporters switch service to AT&T immediately.
Rather, Cohen said, through a national campaign and a website, fairness
atverizon.com, the unions would try to get thousands of people to pledge their willingness to have their local and long-distance service moved from Verizon to AT&T in five Eastern states where both Verizon and AT&T offer local phone plans: Massachusetts, New York, New Jersey, Maryland, and Virginia. AFL-CIO secretary treasurer Rich Trumka said the unions would have pledgers switch only “when the CWA determined that Verizon has gone over the edge and is [resolved] to destroy hometown jobs.” The union leaders estimated that if 3.5 million households of AFL-CIO members in the five states switched, Verizon could lose $800 million in annual revenues, more than 1 percent of its total sales.
AT&T spokeswoman Tracey Belko said: “We always welcome potential new customers. We certainly are ready to handle any number of leads that come to us.” Of AT&T’s 69,000 employees, 21,000 are CWA members and about 1,000 are members of the International Brotherhood of Electrical Workers, which is also representing Verizon workers in talks.
Jeff Bray, a telecommunications analyst with David L. Babson Co., a Cambridge money-management firm, said he questions how the plan would benefit either the unions or AT&T. Because the unions say they would encourage any customers who move to AT&T to come back to Verizon if a good contract is reached, AT&T would potentially lose money because of all of the administrative and processing charges for customers it keeps for only a few weeks or months, Bray said.
Some analysts praised the union campaign. Tom Juravich, director of the Labor Relations and Research Center at the University of Massachusetts at Amherst, called the campaign “a brilliant strategy that the union is using to keep Verizon’s feet to the fire. It doesn’t come without its risks, but they’re simply taking names. They’re not asking anybody to switch.”
But Verizon spokesman Jack Hoey said many workers are “shocked and outraged” and have inundated company officials with e-mails denouncing the proposed campaign, which Hoey said “would be a disaster for Verizon workers and threaten the very jobs the unions claim to protect. When customers leave Verizon, our revenues go down, and that means we can’t employ as many union workers.”
Hoey said the plan could also threaten the value of $2.7 billion in company stock that employees own in retirement plans, and noted that Verizon union employees switching to AT&T would pay much more because they get a 50 percent discount on Verizon phone service as a job perquisite now. “What makes it even more bizarre is that Verizon employs more union workers in a single state — New York — than AT&T employs nationwide,” Hoey added.