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Verizon strike should slow NYC deal: City officials

A striking Verizon worker walks the picket line in front of a Verizon wireless store in New York
A striking Verizon worker walks the picket line in front of a Verizon wireless store in New York

By Joan Gralla and Sinead Carew

NEW YORK (Reuters) - A New York City education panel should delay voting on a $120 million contract with Verizon Communications Inc until the telephone company agrees to a new contract for 45,000 striking workers, two city officials said on Wednesday.

In making the recommendation, Democratic City Comptroller John Liu became the first city politician to pressure Verizon to settle the strike, which began on August 7 after negotiations for a new contract failed.

New York City's Public Advocate Bill de Blasio, also called for a delay of the vote the day after Verizon said it started warning employees their healthcare benefits would end on August 31 if they are still on strike.

More than half the workers in Verizon's wireline business, which provides Internet, telephone and television services, walked out after their unions said the company was asking for too many concessions in areas such as healthcare and pensions.

New York City's Panel for Education Policy plans to vote on Wednesday on whether to let the city Department of Education allocate a $120 million contract to Telesector Resources Group, which is part of Verizon, Liu said.

"No city agency should take sides in a disagreement between labor and management and a 'yes' vote would equate to a validation of Verizon's demands," Comptroller John Liu said in a statement. "Instead, the suitable action would be to wait until an agreement is reached."

A Verizon representative said Liu's call was a "short-term event" that would have no impact on Verizon's "ability to fulfill the City's communications needs."

"This contract would mean additional work for the currently striking workers," spokesman John Bonomo said.

Verizon technicians and customer service representatives, have gone on strike in nine northeast and mid-Atlantic states and Washington, DC, at a time when governors and mayors around the nation are pressuring unionized public workers to accept cost-saving concessions ranging from wage freezes to higher pension contributions -- or risk layoffs.

The city's pension funds own Verizon shares so the city comptroller also could use the clout these holdings give him to turn the heat up further on Verizon.

Liu's spokesman was not immediately available to comment.

De Blasio said the Department of Education should "immediately develop an alternate plan to provide schools with wireless services."

The full contract is estimated at $175 million and could include other agencies, Liu said. Verizon is expected to report revenue of $110.8 billion for 2011, according to Thomson Reuters I/B/E/S.

Bargaining continued on Wednesday between the company and the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW).

Analysts said it was not immediately clear if the politician's moves would affect the bargaining, but one noted the strike would likely have an economic impact on Verizon as managers try to cover for striking workers.

"There'll be some charges they have to take. There'll be overtime they'll have to pay their managers and customer installations will probably be down," said Piper Jaffray analyst Christopher Larsen, but he said there would likely be a "longer term benefit" for the company.

Spokesmen for Mayor Michael Bloomberg, New York Governor Andrew Cuomo and New Jersey Governor Chris Christie, whose state is one of the nine with striking Verizon workers, had no immediate comment.

Part of the New York City comptroller's job includes "registering" contracts and Liu said he did so in May. Liu did not say whether he could cancel that action or otherwise block the contract.

Verizon shares closed up 73 cents, or 2 percent, at $35.61 on New York Stock Exchange.

(Additional by Lisa Lambert in Washington, D.C.; editing by Padraic Cassidy, Jan Paschal and Andre Grenon)

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