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Verizon Management Loses Pension-Retiree Medical Benefits!
In a sudden and surprising move, Verizon announced it would be suspending pensions for its management personnel, and would also discontinue providing retiree medical benefits, as well. Importantly, this only applies to management employees, not employees covered by CWA or IBEW Union Contracts.
Verizon, which made a profit of $7.8 billion last year, is looking to save millions in operating expenses from this move. The loss of retiree medical benefits will affect new managers and current managers with less than 15 years of service. Existing management pensions will be frozen at current values for managers with greater than 15 years of service. The only remaining retirement benefit for management will be their 401Ks, which Verizon will continue to match up to 6% of salary. Management will be offered the “opportunity” to pay for their retiree medical coverage for their own pocket, if they wish.
CWA Members are reminded that our pensions and medical coverage for both employees and retirees are guaranteed through the end of the current Union Contract, which expires in August of 2008. Unfortunately, we should consider this cruel action by Verizon as a shot across the bow for 2008 Bargaining. The Union expects difficult talks at the end of the current five-year pact.
Verizon did not announce what, if any, changes were being made to their executive level retirement plans.
Verizon Directory Division to be Sold.
Verizon has announced that it will try to sell or spin off Verizon Information Services (VIS), its Yellow Pages division, in 2006. Analysts speculate VIS could be worth $17 billion. There are a number of reasons Verizon is looking for this kind of cash:
To lower Verizon’s $38 billion debt load; To invest more in wireless; To invest in the replacement of copper with fiber; To integrate the MCI acquisition.
In other word, Verizon is seeking to cash out from a union-built business to pay for growth businesses, most of which it’s fighting to keep the union out of, just as it has used its wireline profits to create its anti-union wireless business. Mismanagement and bad judgment calls led to Verizon’s large debt, and mismanagement has also taken a toll at VIS. Although VIS is still extremely profitable, its revenues have declined relative to other directory companies.
VIS President Kathy Harless (who reports directly to Ivan Seidenberg) has made missteps such as replacing the familiar “Yellow Pages” name with “Superpages.” Revenues began to decline following the change. Harless has also mismanaged personnel, making broad buyout offers without a plan to adequately cove the work.
To pay for its own mistakes, VIS management is taking on Union employees directly by refusing to bargain in good faith. 300 CWA Members who work in VIS New York walked out and began an Unfair Labor Practice (ULP) strike on October 31, because Verizon refuses to bargain in good faith. *** “When bad men combine, the good must associate; else they will fall, one by one, an unpitied sacrifice in a contemptible struggle.” Edmund Burke
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