As Verizon Demands Huge Cuts to Worker Benefits, Its Profits Soar and Its CEO Gets $18 Million in Compensation


This week, 45,000 Verizon employees, represented by the Communications Workers of America, went on strike following the breakdown of negotiations between union representatives and management on Saturday. The workers are battling a long list of concessions that the company is demanding of them, ranging from asking employees to contribute more to their health care plans to halting pension accruals this year.

Cutting workers benefits as a cost-saving measure is a natural part of a market economy when times are bad, but what is particularly outrageous about Verizon's demands is that the company's fiscal health is actually rapidly improving and its profits soaring. The company's quarterly report released in January found that their profits nearly doubled from the same point last year. Then in April, Bloomberg reported that the company's profits "more than tripled" after the company began offering services on Apple's popular iPhone, with net income approaching $1.44 billion:

Verizon Communications Inc. (VZ), the second-largest US phone company, reported earnings that more than tripled as taxes decreased and the carrier attracted new customers after introducing Apple Inc. (AAPL)’s iPhone. Net income rose to $1.44 billion, or 51 cents a share, New York-based Verizon said today in a statement.

Their 2010 annual report shows that their stock returns are actually outperforming the wider market, easily overcoming the S&P 500 index.

"They are outperforming the overall industry," said financial analyst Michael Nelson of their Spring 2011 returns. Meanwhile, one person at Verizon who is not being asked to take any cuts is Ivan Seidenberg, the company’s CEO. His compensation actually rose four percent in 2010 to $18.1 million. The Communications Workers of America note that the "top five executives [at the company] received compensation of $258 million over the past four years." This year, Verizon received a federal tax rebate of $1.3 billion. That's after a $1.5 billion federal bailout in 2008.

Yet despite its high profits and lavish executive salaries, Verizon is proposing nothing but concessions for workers. As an August 6 CWA statement explained, "Even at the 11th hour, as contracts were set to expire, Verizon continued to seek to strip away 50 years of collective bargaining gains for middle-class workers and their families. Following the game plan of Wisconsin, Verizon is trying to destroy the collective bargaining process by refusing to engage seriously on the issues."

It appears that Verizon's stockholders and executives are being treated well by the company while it demands sacrifice from its workers. "We are regular folk like most other folk out here trying to pay our mortgages, pay our bills and survive and we don't think that is a lot to ask when the company is making billions of dollars in profits," said one striking worker.

"It's not just about us," said Chris Germershausen, a member of CWA Local 1101 who was on the picket line at Verizon's headquarters in downtown Manhattan. "If they get us to give in, they'll go after construction workers next, iron workers, everybody. Corporations will run everything. We can't let that happen."

"We don't want to give up what we fought for over the years," said Lila, who works for Verizon as a technician in Syracuse, N.Y., "We have to organize to make our lives better. Corporate America doesn't give a fuck about us."

Verizon workers are facing a tough fight. But this assault is also taking place in the midst of growing bitterness and anger at the demands of the business and political establishment that working people--from teachers and public-sector workers to the labor movement in private industry--bear the brunt of the economic crisis.

If union members at Verizon succeed in challenging the attack on their living standards, it would be an important step toward reversing the trend of corporations using the recession to force concessions and a major victory for those who hope to rebuild the labor movement. CWA and IBEW members walking the picket line today deserve all the support we can give them.

Start HERE.
(lifted from Bastard Robs blog)