News and Events

2/02/10

Business Managers Report
February 2, 2010

Verizon has notified the Union that it will only retain 3 employees and the rest will be sold to Frontier. The controversial decision will keep the current contract in place for these three members that will remain Verizon employees. The rest will fall under the same contract, but Frontier will be the signatory employer. This will mean the members that have or will be retiring prior to Frontier taking control will be represented under VEBA (retiree health insurance) in the current contract.

When and if Frontier takes control and finalizes the deal with Verizon, a date will be set for the transfer of control. When this happens Frontier will be the successor and will have to honor all the language in the contract as bargained with Verizon. If a member should retire before this date they will retire as a Verizon Employee. If a member should decide to retire after this date they will retire as a Frontier employee.
There have been a lot of calls to the Union Hall from members asking many questions about retirement and lump-sum pensions. The retirement and lump-sum pension will still be honored under Frontier the same as it is today. The current contract expires March 31, 2011. Until this date nothing can change in the contract until bargaining begins.

A lot of members are under the assumption that they can retire now as a Verizon employee and will be rehired after 6 months. Several members have called saying that their supervisors have told them that Frontier will be looking to hire people that retired as Verizon employees. The local has not been approached by Frontier or Verizon about bringing back retirees. Do not assume that either of these Companies will bring you back. Several members have already retired and called the local wanting to know when they can return back to work. The decision to retire should not be made assuming that you will be returning to work within 6 months.

I will be attending a meeting in Durham/Raleigh North Carolina, February 9th to 11th. The meeting will be with all IBEW Locals that represent Verizon members that will be sold to Frontier and all IBEW Locals that currently represent members that work for Frontier. The meeting will cover many topics on the sale from, financial comparisons, contract language, pensions, benefits, effects of the remaining Verizon employees to proactive approaches for upcoming contract negotiations.

In Solidarity
Michael J. Brousseau
Business Manager
IBEW Local 1106

1/28/10

IBEW Local 1106
Business Managers Report
Jan. 27, 2010

In a recent meeting with Verizon North of Michigan the Company was asked once again about offering an In-Service Pension for all employees that are pension eligible. This would help on the number of employees that are currently retiring because of the sale to Frontier. Verizon has stated that they are not interested and would be replacing critical backfills as needed. The loss of highly skilled senior positions will be detrimental to the success of the new owners of the company should the sale prevail. Verizon does not seem to care as they are set to walk away with over 8 billion dollars, not to mention tax free, after the sale is complete.

In a recent article, the investment firm Edwards Jones was quoted saying “Verizon's pension is now $2.6 billion underfunded. And its post-retirement benefits are $24.5 billion underfunded. Adding this to Verizon's consolidated debt increases the firm's leverage by 65%. Verizon expects to contribute more than $2 billion (or about $0.80 per share) to partially fund these obligations in 2009.” Now that did not say which pension funds were underfunded as there are several different pension funds from Management to a variety of Union pension funds across the nation for different states. But the fact remains that after the sale of the 14 states to Frontier, Verizon will be required to fund these plans at 100%. This means that the remaining monies left will more than likely be consolidated into other plans that are in need of funding. To put it in a nutshell, Verizon is using your over funded pension monies to fund other plans that will stay with Verizon.

In the quote above by Edward Jones investments its states that Verizon’s post-retirement benefits are $24.5 billion underfunded. This means the retirement benefits such as medical for retirees are underfunded. If a pension plan is over 100% funded then all monies over the 100% can be used for VEBA (Voluntary Employees Beneficiary Association pg 198 of the CBA), this allows the funding for retiree health insurance. In 2007, the pension fund for Verizon Michigan hourly employees was 317% funded. Since that time the fund has decreased because of the amount of employees retiring with the lump-sum. The interest rates have favored employees in this plan and huge amounts have been pulled from the retirement fund, but the plan is still overfunded. The problem with the sale to Frontier is that Verizon is only required to fund the plan at 100% for the remaining employees at the date of the sale. They are not leaving enough of your money to fund post retiree benefits. In fact as stated above they will be using it to help fund other Verizon plans. This is only one reason why we need to fight this sale. I am asking all members to contact the Attorney General for Michigan and tell him your thoughts on the sale. The main topics that should be pointed out to him are:

The most recent sale of Verizon properties to FairPoint, Hawaiian Telephone and Idearc were sold using the reverse Morris trust fund allowing Verizon to walk away from these sales, tax free.
That the most recent sales to Fairpoint, Hawaiian Telephone and Idearc have all gone bankrupt because of these heavy debt loads and will leave Frontier in a weak financial condition due to the amount of debt the company will assume.
Complications and system failures that could result from integration of the two companies' systems used to serve customers.
That there will be reduced broadband deployment and an even more Degradation of service quality because of the heavy debt loaded.

You can contact him at miag@michigan.gov or write him at

Michigan Department of Attorney General
Lansing Office
G. Mennen Williams Building, 7th Floor
525 W. Ottawa St.
P.O. Box 30212
Lansing, MI 48909

I am currently preparing for bargaining with Century-Link formally known as Century Telephone of Upper Michigan. Century Telephone and Embark have completed their merger and it will be interesting to see in this bargaining if there will be changes. A former Embark Human Resource Manager has contacted us and stated she will be the Lead Bargaining Representative for the Company.

I will try to update you as the sale of Verizon and Frontier progress and all the other duties that are currently being handled at the Local.

Do not forget to attend your local Unit meeting for more updates. I would also like to hear from more members on their thoughts, concerns and suggestions with their union.

In Solidarity,
Michael J. Brousseau
Business Manager
IBEW Local 1106

1/22/10
Governor Wants Some Guarantees In Landline Deal

1/21/10 There will be a vote, beginning at the February Muskegon Unit meeting regarding a proposed bylaw change. Please post this bulletin.

1/20/10 There is currently an Executive Board vacancy in the Alpena Unit. Please post this bulletin as necessary.

1/13/10
http://www.verizonfrontierdeal.org/blog/entry/gov._manchin_joins_public_rally