Verizon, union spar over potential loss of jobs

Nov 04, 2009 (The Register-Herald - McClatchy-Tribune Information Services via COMTEX) -- FTR | Quote | Chart | News | PowerRating -- Union and management forces sparred verbally Tuesday over potential job losses if Verizon sells its West Virginia interests to Frontier Communications, while the Raleigh County Commission stayed in a neutral corner.

Two commissioners rebuked Verizon over what they considered shabby service in recent months, but took no immediate action on a request by the Communications Workers of America to send a letter to the state Public Service Commission, asking it to block the pending sale.

Mike Swatts, area general manager for Frontier, advised the commission that union jobs are guaranteed for the duration of the existing contract, about 18 months, and said his company would work with unions in good faith.

Ross Lewis, president of Local 2007 and statewide coordinator for the CWA's District 2, said he heard from a company executive in last month's interims session at the Capitol that the 18-month guarantee only applies to outside workers, such as technicians, but no umbrella is provided the inside workers, such as the 65 to 70 union employees at the Beckley office.

"We don't do headcounts to cut expenses," Swatts said. "Look at our track record."

Lewis suggested Verizon's track record in selling its assets has been one of failure -- three bankruptcies when a portion of its business was marketed to smaller firms.

Moreover, the union leader said, the sale would permit Verizon to capture $3.3 billion in tax-free money, leaving the state in the lurch through a reverse Morris Trust tax loophole.

Lewis said 60 percent of West Virginia lacks broadband and the state ranks 33rd in real-time Internet connection speeds.

"Verizon chose Frontier as a buyer because it can take advantage of a tax loophole to paying taxes on $3.3 billion profit," he said. "Taxpayers will in effect subsidize an abandonment of its operations."

But Joe Long, director of corporate communications for Verizon, disputed Lewis, saying, "Verizon will not abandon West Virginia. We see this as actually caring for West Virginia." A decision to get out of the land line business is "the entire national footprint" entailing all 14 states it serves, not just in West Virginia, Long said.

In fact, he said, Verizon is remaining in West Virginia and has invested $64 million, and suggested that more jobs likely would be needed if the sale went through. What's more, he said, Frontier has plans to expand broadband in the state.

In the last couple of years, commission president John Humphrey said, the firm has "really let down on their system."

"I don't know what the problem is," he said. "I'm not throwing stones, but at the same time I'm just addressing my own personal concerns. I know there are a number of problems out there."

Commissioner John Aliff said he had to do without service a week, and when he called Verizon, an employee was unfamiliar with the heart device he uses -- a pacemaker. "I was a week without service," Aliff said. "That's too long to go, especially with a medical situation. I would hope Verizon or Frontier or whoever looks closely at service phones of people with medical needs."

As for a smaller firm buying assets of a larger one, Swatts said, Frontier started out as a small outfit, buying up GTE, and since 1994, has grown to a 24-state operation. And in all 24, he said, about 92 percent of its customers have access to Internet service. "You need to look at areas we service in West Virginia," he said.

"We don't serve larger areas like Huntington, Charleston, Morgantown. Our biggest areas in terms of density are Bluefield, Princeton, Charles Town, Romney." Frontier is active in 38 counties.

Expanding high-speed service will necessitate more jobs, Swatts said. "We can't impose service labels without technicians," he added.

One man in the audience, David Foster of Harper Heights, was unimpressed with the two companies' assurance about jobs, telling the commission he feared the loss of employment by many in the region. "This is going to have a ripple effect on all of us," he said.

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