Phony War

How the Phone Unions Turned Verizon's Strike Preparation Against It

The toughest labor showdown in America this year has been the one between Verizon and its unions, and when contracts expired the first weekend in August the company left no doubt that its negotiating stance was to be one of scorched earth.

Some 30,000 potential replacement workers—in union parlance, scabs—were recruited to take over the moment phone company workers walked off the job at 12:01 a.m., Sunday, August 3. The company's wartime propaganda machine went into high gear, offering conflicting explanations to different audiences. To win broad public support, the company blanketed cable and airwaves with slick television ads, promoting a vision of Verizon's benevolent personnel policies. The message here was that Verizon employees work in a safe cocoon of health benefits and job security. The ads depicted a folksy exchange between neighbors at a local diner talking about an ailing telephone worker, lucky enough—even if the ingrate didn't know it—to enjoy the company's fuller coverage. "He's got it good," one diner says. "Great medical, lots of vacation."

A dramatically different message was beamed to Verizon investors. This one communicated that the company was poised to shave its contributions to that vaunted health care coverage, win the right to lay off employees as it saw fit, and perhaps most importantly, to gain the same flexibility as its non-union competitors in transferring jobs and tasks around the country as necessary. "We have to be flexible to be able to compete," was the mantra repeatedly droned by company spokespeople. Regardless of the costs of the looming battle with its employees, this message went, the result would be a leaner, more agile, and more profitable firm, one capable of soaring to new heights in the telecommunications industry.

Even a timely cover story in Business Week appeared in the days before the deadline, containing a fawning portrait of company CEO Ivan Seidenberg, who appeared grim and ready for battle, behind a headline, "Verizon's Gutsy Bet."

And then a funny thing happened. The midnight deadline came and went, and the cannons never fired. Workers stayed on the job. Negotiators kept talking. For the first time in years, the Communications Workers of America, the largest of Verizon's unions, broke with its policy of no contract, no work, a posture of militancy designed to bring management to heel and win last-minute concessions. But different times breed new and different tactics.

Instead of walking out, the phone company unions went into a labor version of rope-a-dope, the brilliant Muhammad Ali boxing tactic of covering up and burrowing down while your opponent uselessly flails about, unable to land a solid blow. Replacement workers remained holed up in their hotels, representing a hefty added payroll as regular union workers went about their normal routines.

At contract deadline time, both sides agreed to stop the clock, saying publicly that sufficient progress was being made. But there was also another rationale: a jujitsu-style union strategy aimed at using the company's own awesome pre-strike preparations against it.

"We didn't stay at the table because we thought we were close to a deal," said one union leader last week. "We chose to stay because the company was totally geared up for a strike and had expended millions. There were tens of thousands of management people flown in, most of them from Verizon West. This totally shocked them."

Telephone managers had good reason to expect a walkout. The company had endured an 18-day walkout in 2000 and a bitter 17-week-long strike in 1989. It had begun preparing for this one more than a year ago, engaging outside consultants on handling the press and the public ("Showdown for the Phone Union," Voice, July 9-15).

"We knew that they were dying to shift our work out of town: the customer-service reps, the network-monitoring functions," the official said. For those and other reasons, the tactic of the CWA, along with the International Brotherhood of Electrical Workers, the other key union in the company's 78,000-member workforce, became one of guerrilla war: members staying on the job while carrying out mini-actions, demonstrations, and rallies designed to keep the pressure on management.

"I think it's a pretty shrewd strategy on the union's part," said Joshua Freeman, a City University history professor and the author of Working Class New York. "The company apparently was prepared to wage a long battle."

"All of us have no doubt this is a very important conflict," said state AFL-CIO president Denis Hughes, a member of the electricians' union, last week. "First, it is a telecom company, and as such it's on the cutting edge of job expansion. It also is an immensely profitable company, which is seeking to set new labor relations policy for the industry. They want to offer lower benefits and decreased work rules, with no restrictions on transfers of personnel." Verizon had alarmed labor leaders like himself, Hughes said, with its apparent eagerness for a labor showdown. "This particular company seems bent on shifting from a beneficial, benevolent employer to a reckless, renegade, laissez-faire capitalist one," said Hughes.

Verizon's profitability offered the union its strongest argument in its own propaganda battle. The company took in $67.6 billion in revenues last year, the highest in the industry. Profits were $4.1 billion. "Its business is one of the great cash machines of Corporate America," said Business Week on the eve of the contract expiration. The magazine's glowing profile touted Seidenberg as a from-the-ranks former line worker who was known as "Ike" on the job when he laid cable at Co-op City. Unmentioned were Seidenberg's $13.5 million in pay and some $54 million in stock options. Union spokespeople have delighted in pointing out that the CEO's options nearly match the $58 million in health care givebacks the company is seeking.

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