Frederick Douglass

"Power concedes nothing without a demand. It never did, and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them..." Frederick Douglass

Tuesday, August 16, 2011

Verizon Strike Update, 15 August

This strike has all the makings of an epic showdown. All the elements of a classic, class war clash are present, and so far it appears to following the all-too-familiar script. We have a corporation aggressively attacking the living standard of its employees, and we have a workforce which to date has been equally determined to defend their livelihoods. And as usual we have the state in the form of the police, judiciary, intelligence services, mainstream media etc. providing hands-on tactical support for capital. For those of us who have familiarized ourselves with the often bloody, heart-breaking history of labor resistance what is unfolding is an old story--the worker against the state, David against Goliath.

Despite its vast profits, Verizon is demanding costly, draconian concessions from its workers.

The concessions Verizon is asking its employees to make would cost each worker $20,000 per year. Verizon is demanding that workers: pay up healthcare premiums of up to $6,800 per year, surrender their bargaining rights over healthcare, and freeze their pensions. Verizon also wants to deny new hires most of the benefits that current employees now enjoy.

What working class person can afford a $20,000 cut in compensation? The company certainly understood that such a request would be met with fierce opposition, what choice would its employees have against such severity? What we have here is class war, pure and simple. As I noted in an article written in November 0f 2008 (Crisis? What Crisis?), One of the reasons Wall Street brings down the economy every so often is to union-bust. The paucity of money in circulation combined with the high unemployment it induces creates a climate where lacking employment alternatives, workers can be made to surrender pay and benefits. Being compromised in this way weakens the unions' position, and makes them susceptible to the anti-worker, anti-union legislation which invariably gets introduced during such periods (such as the Right To Work Bill currently being sponsored by ubercapitalist Rand Paul). As a result, unions, even those which are not corrupt, have traditionally found refuge in capitulation. It's a win/win for capital: Either the unions acquiesce to the oligarchy's draconian demands, or they arch their backs and fight a fight they have little chance of winning. What does Verizon stand to lose here? The worst case scenario for them is that they have to continue on the extremely lucrative course they have been on with their current labor costs.

Knowing that they cannot win an honest fight, Verizon has employed the standard ploy of the false accusation. The only chance the workers have is if they garner a good deal of public support and Verizon's revenues begin to decline, hence the preemptive propaganda initiative.

Unions also note that since Verizon cannot convince everyone that its workers are overpaid and greedy it has also tried to win support by claiming it is the victim of union-inspired violence. In the last week Verizon has made numerous allegations regarding sabotage of communications equipment by striking workers.

As a result of what the union calls "exaggerated court filings" judges have handed down injunctions limiting the number of picketers permitted at various locations. In New York the company filings claim a striker fired a BB gun at a non-striking worker and that strikers crowded around a manhole where non-striking workers were splicing a cable. The company alleged that the strikers refused to move when they were ordered to do so by police.

Standard corporate labor-dispute criminality, nothing new here.

And, predictably, the defamation campaign has found sympathy with the judiciary, it always does.

Courts in New Jersey, New York, Pennsylvania and Delaware have granted Verizon Communications injunctions against striking union workers who are picketing outside of its corporate offices and retail locations. Specifically, the injunctions are against members of the International Brotherhood of Electrical Workers. Last week, Verizon filed lawsuits against the Communications Workers of America in New Jersey, New York, Pennsylvania, Delaware and Massachusetts and accused the union workers of sabotage and harassment. 45,000 Verizon Communications employees, about 25% of the company’s workforce, went on strike on August 7th after the company failed to reach an agreement with labor unions over health benefit premiums. Managers are currently filling in for the strikers until a deal is reached, although at this point it appears negotiations could take a while.

And, as always, mysterious people begin to appear.

This Verizon facility houses an "FIOS" call center and the garage which sends out crews to do installations or repairs for cable customers. The only crews going out Thursday were made up of managers, including those drawn from other parts of the country, and recalled retirees. One picketer complained that most of these managers were people she didn't recognize from inside the facility.

At least on of the strikers have been hit by trucks driven by an unrecognized "manager." Infer what you will.

As they always do, capital has called out the uniformed and plain-clothes dogs in defense of their own.

New York City police, including special “anti-terror” units, are escorting strikebreakers across the picket lines and monitoring strikers. The FBI, an agency of Obama’s Justice Department, has launched an investigation into unsubstantiated company charges of “sabotage,” linking the alleged violence of strikers to the upcoming ten-year anniversary of the 9/11 terrorist attacks.

Police are aggressively enforcing court injunctions obtained by Verizon in several states limiting picketing. Workers have been confined to fenced-in areas away from building entrances to shield strikebreakers and reduce the pickets to impotent protests. At least eight workers have already been arrested.

Anti-terror units? If that doesn't tell you what the so-called war on terror really is then nothing will.

Arresting strikers, how novel.

The press has been doing its share to swing public opinion against the workers. Here capital's ever faithful disinformationists at CNN lurch into action, presenting utter submission as ethical compromise.

Verizon strike: Can both sides win?

Here they attempt to deceive their readership into believing that these are bleak times for the burgeoning, cash-rich, 10b USD company.

There are very few surprised faces from either side of the Verizon picket lines. When a labor contract signed in buoyant times expires in a bleaker era – as is the case with the company's current 45,000-worker strike -- the stage is set for conflict.

Yup, hands-on advocacy for cuts.

Although Verizon is making decent profits, only 0.5% of its income is attributable to the slowly shrinking landline business where its unionized employees are concentrated. The difference between the wireless and wireline sides of Verizon's house is driven by its network architecture. In the wireline business, there are hundreds of thousands of miles of individual telephone and data lines, most sagging from aging telephone poles, exposed to the elements and accidents. After a major storm in southern California it may take 10,000 truck rolls to repair the damage. That is why the wireline business needs 111,000 employees -- about one-third more than the wireless business -- to support revenues only two-thirds as large.

Decent? Indecent is more like it.

This strategy too is straight from the union-busting playbook, capital employs it often. The striking workers are from the least profitable part of the enterprise, hence their efforts don't produce the revenues to warrant their compensation. Tsk, tsk.

Verizon doesn't employ these 45 thousand workers because they like signing paychecks. Most infrastructure are labor intensive and costly, but they are essential to the overall profitability of the business. This argument is entirely specious, and its author and CNN know it.

Farther down in the same article, where CNN knows it is less likely to be read, some truth is injected against the inevitable charges of bias. One might call it a preemptive disclaimer.

Given the current economic climate, where austerity and benefit reductions are discussed daily, it seems a propitious time to bargain. But, Verizon management's position is weakened because of the company's overall success. While the company may argue that wireline profits are only $3,064 per wireline employee, the union can point to the company's large overall profits.

But the honesty doesn't survive into the first line of the next paragraph.

In cases like these, where the pie is shrinking, management may have to legally separate the two businesses in order to avoid cross subsidization. When the business in question has no surplus, the union's position is greatly weakened.

Verizon's pie is expanding prodigiously. They are rolling in money.

And this is a proposed strategy to resolve the conflict so both sides can "win"? Suggesting a course to "greatly" weaken the union?

Now once again feigning impartiality, the author offers advice to the union.

Turning to the union's strategy, it is smart to push back on management before such a split is engineered, exploiting the company's overall profitability. And, it is smart to push back at a moment when the unions have the luxury of having sympathetic ears in the White House.

"Exploiting"? The workers created that profitability! It wouldn't exist without them!

"Sympathetic ear in the White House"? Exactly to whom would that ear belong? The service staff perhaps, but I gather that is not what the author means. Obama has presided over the greatest reduction in unionism and the standard of living of working peoples in decades, perhaps ever, depending on whom you listen to. This president is labor's enemy, any suggestion to the contrary is just a vicious lie.

And now the author uses the crisis to hawk the roll out of fiber-to-the-home initiative so favored by his patrons in the telecom industry.

The Communication Workers union would have a much stronger position were it to use its clout across the industry to work with Congress and the administration to promote a national fiber-to-the-home initiative. Such a program would build infrastructure, create jobs, and, like Eisenhower's Interstate highway program, would have benefits to the economy that many conservative Republicans could embrace.

Work with Congress and the administration? Is that a joke? This is a convicted man working with his executioner.

And, of course, it is off topic, but capital never misses an opportunity for advancing its agenda.

And so who is this shameless huckster masquerading as a conciliator?

Richard Rumelt is the Harry & Elsa Professor at the UCLA Anderson School of Management. He is the author of Good Strategy/Bad Strategy. Visit his website at

School of Management, what a surprise.