Verizon’s proposed sale of its land line business in Northern New England isn’t going over very well with two unions that represent some of the workers.
In fact, the unions have adopted a slogan called, “Stop the Sale†to convince regulators to scuttle the deal.
But Fairpoint Communications, the company looking to buy the business for 2.7 billion dollars, wants to assure the unions they have nothing to worry about.
New Hampshire Public Radio’s David Darman has more.
Two unions representing more than two-thousand five-hundred workers in northern New England are making a strong effort to derail the deal.
Miles Calvey is with the International Brotherhood of Electrical Workers, or I-B-E-W in Boston.
Calvey says Fairpoint Communications is buying a business that is losing customers.
And he doesn’t think Fairpoint Communications has the financial means to keep things going in Maine, Vermont, and New Hampshire.
They’re going to go from about a 500 million dollar operation to a 2 billion dollar operation over night with ..picking up debt of one billion, 700 million dollars and the question becomes if they don’t sustain that revenue, how are they going to do it?
Union anxiety doesn’t stop with Fairpoint’s financial structure.
I-B-E-W members and those of the Communication Workers of America, or C-W-A are also worried about their contract.
It covers wages, health insurance, and traditional, employer paid pensions and it runs through 2008.
Cheryl Ahearn is president of C-W-A Local 1400 in Portsmouth.
She says workers are worried Fairpoint will cut wages once they take over.
Ahearn also says some of them also worry their reliable Verizon pensions will slip away once taken over by Fairpoint.
If you’re an employee who’s been with the company for 25 years we’ll say, and then they go belly up, you have no pension any more. You know, if the employees go with this deal, Verizon has no commitment to pay you for the past 25 years, you’re not an employee of them anymore.
This scenario bothers C-W-A member Shirley Dunham, who is a customer service representative in Portland, Maine, who worries her pension will go the way of other old line plans.
She has been working at Verizon for nearly 20 years, and her husband has worked there even longer.
Dunham says, given her position, she’s willing to leave the Portland office, just to stay with Verizon.
At this point, I would absolutely prefer or at least consider going to work in Massachusetts, the closest here would be going to Massachusetts and staying with Verizon in some capacity to remain a Verizon employee and therefore keep my Verizon pension which I feel is a lot more secure than an unknown, possible Fairpoint pension.
Fairpoint officials say the union needn’t worry about their pensions or their contract if the company ends up taking over Verizons Northern New England network.
For one thing, the company has promised to honor every clause in the contract until it expires in a year and a half.
Plus, the company says it will receive a fully funded pension plan from Verizon.
Walt Leach of Fairpoint says executives want workers to know they don’t expect to change much once they take over.
Compensation, benefits, uh, medical benefits, pension benefits, we clearly would and do expect for those to continue going forward in the renewed contract on the same basis that they are today.
Fairpoint officials have said they want to meet with union members to tell them how the workers fit in to the company’s future plans.
On the financial side, Fairpoint executives say they think they have the means to profitably run the land line business they want to take over from Verizon.
Back in January, the company announced it would take over 1.6 million phone lines in Northern New England for 2.7 billion dollars.
Fairpoint would pay for the deal with one billion dollars of equity from Verizon shareholders, and another 1.7 billion in debt.
Walt Leach of Fairpoint says that ratio of debt to equity is pretty typical of a well run telecommunication company.
Leach also says Fairpoint officials estimate plenty of money will flow to the company.
We are very comfortable that given all the incremental cash flow that comes with the business that we will have a substantial cushion of excess cash flow available after we pay all operating expenses, after we’ve paid all capital expenditures, after we’ve paid taxes and dividends there still is substantial cushion that’s available beyond that to be available for any unexpected costs or expenses along the way…..
Fairpoint officials have said they still plan to hire about 600 additional workers once they take over Verizons’ Northern New England business.
They say they’ll need them, even though customers have been shedding land line service, in favor of wireless or cable.
The company has said since January that they expect to keep more customers by offering more DSL broadband service than Verizon ever did.
But union officials have scoffed at this strategy, saying the future favors newer technology.
Regulators in New Hampshire, Maine and Vermont have to sort out these opposing opinions, as well as questions about finances and available services.
The review has just gotten underway, and it will be several months before regulators make rulings on the proposed deal.
