Verizon Offers Unions Pay Raise, Seeks Pension, Healthcare Changes

Opening labor talks, Verizon made the comprehensive offer to the Communications Workers of America and the International Brotherhood of Electrical Workers at the outset "to encourage a substantive and productive dialogue," said Robert Mudge, wireline operations executive vice president. Verizon said the proposed pay increases were contingent on signing an agreement by Aug. 1, and would add to an average annual salary and benefit package of $130,000 for Verizon associates in the east. Pension-eligible associates could choose between continuing to earn benefits under a traditional pension plan with some limitations and forgoing a 401(k) company match, or opting for an enhanced 401(k) plan currently offered to management (including a bigger company match) with a frozen pension benefit, the release said. Verizon called the combined pension and 401(k) benefits for employees hired before Oct. 28, 2012, a structure "from another era." Noting Verizon associates' healthcare costs were above the national average and calling cost control "essential," the carrier proposed an increase of $8.10 per week for individual healthcare premiums and said "other reasonable cost controls" were needed to keep the wireline business competitive. Mudge said fiber deployment had positioned Verizon for growth, but the company's "cost structure has not changed nearly fast enough to align with today's market realities and consumer needs." Verizon said it seeks more flexibility to manage the workforce "consistent with customer demands." Tami Erwin, president of Verizon's Consumer and Mass Business unit, said, "We need contractual changes that position us to compete with new and emerging technologies." The last contract negotiations lasted 15 months in 2011-12, the release noted. IBEW representatives had no comment. CWA issued a statement Tuesday from Dennis Trainor, District 1 vice president, that said: “Verizon’s claims about the pay increases they put on the bargaining table yesterday are simply a smokescreen designed to hide the harsh reality of their concessionary demands: deep cuts to pension benefits, skyrocketing increases in medical costs, and the complete elimination of job security. Despite $9.6 billion in profits in 2014 and $44 million in compensation to their top five executives, Verizon wants to eliminate middle-class jobs and let customer service deteriorate. Their proposals would slash thousands of jobs and leave our remaining members with a diminished standard of living at the end of any new contract."