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December 06, 2005
Now The Managers Get Hit
You remember the old refrain that had been adapted over time that goes roughly like this: you didn't speak up when they came after so-and-so and, then, when they came after you, there was no one to speak up for you.
Well, today, it's the Verizon managers. The data transmission company (Memo to New York Times: it's more than just a telephone company), announced that it was freezing the defined benefit pension plan covering its 50,000 managers and moving people to a bigger reliance on a 401(k). Translation: we no longer have any obligation to our workers, who make the company run and who deserve something specific and defined they can count on in retirement. Instead, w'ere casting them into the casino atmosphere of the stock market.
This is a big move--and is yet another nail in the traditional pension system. Quoted in today's New York Times story, Karen Ferguson, director of the Pension Rights Center, has it right: "If a company as large as Verizon goes in this direction it could encourage others to do likewise to the detriment of the retirement security of millions of American workers."
Question to Verizon: as the company tries to cut down its managers benefits (who, I should point out, don't have a union so they are subject to the complete whim of the execs), is it also cutting the pay and benefits of its CEO Ivan Seidenberg and the other top brass?
December 6, 2005 in Economy | Permalink
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Comments
I hope all union members at Verizon are ready for the fight of our lives in 2008. You can be sure these are the exact concessions that Ivan will be looking for. We need to be mobilizing now for 2008
Posted by: Jenn Nappi | Dec 6, 2005 9:50:56 AM
In 1989, Verizon, then Bell Atlantic began differentiating management benefits from union benefits. Just before bargaining they implemented a "cafeteria benefits package". Managers groused and went to their union employees to announce they were next. "Surely, if Bell Atlantic is doing this to us, you know you got it comming". After a tough negotiation and a three week strike, CWA and IBEW came out with an improved benefits package and no premium sharing.
Subsequent negotiations proved to be equally difficult, some involving strikes, some involving protracted negotiations beyond experiation, yet each time CWA and IBEW came out with improved benefits and no premium sharing and no cash balance pension plan.
Is this a testament to the bargaining teams? Yes,Somewhat. But, what it really testifies to is the mobilization of the
membership. An informed and active membership is the best resource in defeating company concessionary demands.
Verizon members and managers, know better than most, that the anti-union propaganda of "unions have outlived their usefulness" is just that, propaganda. The difference in benefits and working conditions among union and managers is striking and will become more so with this pension change. It is the union difference.
The main contract at Verizon will expire in August, 2008. If past is prologue, it will be an extremly difficult and tense summer. It will also be union summer of intense activity from the membership through mobilization.
One final thought. Rest assured that the Verizon executives will not share in this pension change. Unlike their management underlings, they have a contract!
Posted by: CWAmember | Dec 6, 2005 10:49:35 AM
great post, cwa member, we all need to keep in our heads into whats at stake come 2008.... corporate policy will repeat itself, as upper management attempts to marginalize the union workforce like they are attempting to do to their lower level management....but with a two tier wage and benefit structure already in place, and still no union representation for the bulk of Vz wireless workers, our ability to negotiate a solid contract will be severely impaired as we come into this fight with our hands tied behind our back....not sure where you're from, but here in NY that 1989 strike was 17 weeks, not 3.
Posted by: CWA 1108 Member mike | Dec 6, 2005 11:24:31 AM
Although I do sympathize with the managers, and consider the current practices of the corporate elite to be both greedy and corrupt, I can't help thinking that defined benefit pension plans will soon be a thing of the past. To me that just underscores the importance of Social Security and a National Health program.
Private corporations are not immortal. Their retirees can easily outlive their period of market dominance. Whatever funds are now put aside for the pension plan should be placed in the account of the employees.
I do not think that people are more vulnerable if their retirement dollars are invested in the broad market vs. the narrow market of one company - their employer.
Posted by: edward | Dec 6, 2005 3:22:16 PM
Major Verizon blunder. Managers at Verizon are stunned by the knife placed in their back. Open and undisguised anger at Verizon's executives is quickly surfacing. The feeling of betrayal is palpable. Talk of orgainizing is spreading and morale is in the dumper.
Yet Verizon needs to do this to save 10B over TEN years? At what cost?
At a time when Verizon needs all hands on deck to confront mounting competition and deployment of Fiber to the Home, they have effectively killed off any loyalty they had among their mid-level managers with one blow.
Expect a massive voluntary exodus of management, as staying beyond the pension freeze date is a disadvantage. Expect recruitment of top management candidates to be difficult as VZ no longer will have a competitive advantage in the marketplace for mid-level managers. Expect decreased productivity, as those left behind will carry this disenfranchisement for years.
And all for what? Wall Street? Well Wall Street was unimpressed.
And no comment from VZ other than the official press release.Ivan Seidenberg meets with managers on Monday to explain why and answer questions. Anger will be peaking by then. Will they tell him what they really think?
Posted by: CWAmember | Dec 7, 2005 10:21:32 AM
Posted by CWA member:
Open and undisguised anger at Verizon's executives is quickly surfacing. The feeling of betrayal is palpable. Talk of orgainizing is spreading and morale is in the dumper.
Would Verizon middle managers have the right to organize under the NLRA, or are they "supervisors?" Could IBEW/CWA run a bargaining/pressure campaign to get Verizon to voluntarily recognize a middle-managers' union, the same way the SEIU has been doing with security guards (another group with limited rights to organize under the NLRA)?
Posted by: Rob | Dec 7, 2005 10:52:02 AM
Rob,
The term management is used loosley at VZ. There are those who are supervisors with the right to hire and fire and there are salaried employees who supervise no one.
My understanding is that the former are not covered under the NLRA, but the latter are, as they are in essence unrepresented employees.
Perhaps someone who deals regularly with NLRA can better answer this question
Posted by: CWAmember | Dec 7, 2005 11:35:13 AM
Ouch... We got hit hard with this one. Worse yet, we heard about it in the newspapers. No more associates will want to be developed to become managers, and many managers will want to retreat to their former union jobs.
This will deaply effect the future leadership of the company. Hiring will be from outside the company because no union member in their right mind would take the pay cut, the benefits cut, and the retirement cut.
Posted by: Manager | Dec 7, 2005 6:17:58 PM
Thank you, I have been telling people that we all hang together or all hand separately for about 20 years now, but no one seems to listen.
Posted by: la | Dec 7, 2005 6:26:40 PM
Make that hang.
Posted by: la | Dec 7, 2005 6:27:55 PM
I'm ready to sign a union card. But not with those pussies at the CWA or IBEW,I've seen them in action. USELESS. I want the Teamsters. At least they know how to fight.
I have no reporting people, just a desk full of work and no f*****g pension or medical benefits when I retire. I get to drop dead in my F*****G chair with my stack of work. I say it's time for SOLIDARITY, IT'S TIME TO FIGHT BACK AGAINST THE CORORATE PARASITES LIKE IVAN AND LARRY. What good is a bunch of management employees who are NOT dedicated to their jobs and could give a shit about the associates who get EVERYTHING for free. Even the playing fields, or get off the field. One of two things happen here, 1st levels (with no reporting people) organize, or we just quit and move on...what have we got to lose? (Not our pensions I guess) I hope Ivan gags on his bonus, the dirty, dishonest bastard. I hope he rots in hell.
Posted by: specialist | Dec 7, 2005 9:06:57 PM
The last time managers (read that any non union represented employee, regardless of people reporting to them) tried to organize was back in the mid '70's. They were all fired.
I'll also repeat what we have been saying to anxious members here-- in '89, we were told that we would have to accept paying for our medical, just as the managers had been forced to do. We told Ferguson (then Chairman of NYNEX) we would never do that. The managers smiled and said we would. They also said Ferguson had promised to never sign a contract that didnt have that provision. Well, guess what? We went on strike for 17 weeks and we came back with our benefits intact.
Just because the company is forcing managers , who have no right to union representation, to ditch their pension and health benefits, doesnt mean we will accept it.
They did (the company) it to "lower the bar" for the MCI managers who are coming in. It was either raise pension guarantees for MCI (who have no pension plan) or cut our managers.
All we have to do is be one day stronger and better than management. That's all, just one day.
Oh, and to the specialist, it is very obvious you were A, never craft. B, have been on the losing side for too long. See if you can retreat, you'll feel what it is like to win- with a real union-- CWA
Posted by: jim | Dec 8, 2005 8:37:40 PM
thanks Jim, I wish we had retreat rights. Those have been gone for years as you probably already know. Unfortunatley, I'm looking for a job in another industry no that I have nothing to lose anymore. Verizon has finally beaten me to a useless pulp. I'm done. To the CWA and the IBEW, I'm sorry, I spoke in frustration and anger. I say be strong, stay tough and NEVER give up the fight. I have to do it all over again, I wouldn't have gone to work for this bloated monopoly in the first place..I'd have followed my passion and done something significant with my life. I sold out...make sure you don't let them steal your souls like they did ours. Someone at this putrid company should get something. The managers are in one MEAN mood these days and I'm concerned that things will be EXTEMELY UGLY in 08. I don't want to around for that strike...no thank you. Just be strong, and be tough. NEVER GIVE UP
Posted by: specialist | Dec 8, 2005 9:34:28 PM
vz stock price 12-8-05
31.23 -0.22 -0.70%
Posted by: na | Dec 8, 2005 10:02:03 PM
First they came for the unskilled laborers
and I did not strike
because I was not an unskilled laborer
Then they came for the trade unionists
and I did not strike
because I was not a trade unionist.
Then they came for the managers
and I did not strike
because I was not a manager.
Then they came for me
and there was no one left
to stand with me.
-CEO whose company was undercut by Mega-Walmart. circa 2020ad
Posted by: Frank DeCastille | Dec 10, 2005 3:13:30 PM
To specialist,
I feel bad for you and all the managers who werent even given the decency of being informed of the loss of you pensions face to face.
I feel really bad for the people who were hired within the last 5 years--under false pretenses it seems.
I am aware, more than aware really, that we are expected to be the next group to fall on our swords for the good of the company. Well, that is why they have contract talks.
I dont have any words that will make you feel better, i wish I did. I guess maybe people will start to wake up about the corporate greed and unchecked power of the almighty corporations in this country. It used to be that if I gave you an honest days work in return you gave me an honest days pay. Now, that is no longer certain--much less expected.
I do know this though. I and my like minded brothers and sisters will continue to do an honest days work, expect an honest days pay, and hold the company to its obligations and responsibilites.
Good luck,
Merry Christmas, Happy Chanakuh.
Posted by: jim | Dec 10, 2005 3:38:11 PM
Five years ago I took a 1st level promotion for several reasons. I was no longer challenged by my job as a systems technician and I figured I had about 12 more years to work and of all things I wanted to increase my pension package. Now if anything, considering the loss of our pension , I will be making less than the technicians that report to me. I'm supposed to care? I don't think so. Now I wish I supervised a hundred technicians because I would let them do whatever they wanted. I no longer will look to protect the interest of the company. Verizon has told me and 50,000 of my peers that we are no longer appreciated and there is no reward for being a leader.
Verizon will try to attack the associate level in August of 08. Prepare yourselves. Start saving now as much as you can. There will be a strike, a long one, and the associates MUST stick together on this one. DO NOT let these scum sucking greedy bastards take your hard earned money awat from you and turn this into another comcast or Wal-Mart.
Management employees must stick together also. Take the time and write Ivan a letter. Tell him this is bullshit! I know I have a new attitude and have let the techs know it.
Posted by: PJM | Dec 10, 2005 8:42:30 PM
PJM,
It used to be , if you have any time in the company you would remember, that when the union was in contract talks, most of the old time managers would silently be on our side. The reason was what ever we got in pay raises and pension increases, you guys got also.
When the FMP happened, it took all of the oldtimers who had risen through the ranks out of the company.
I really am suprised at the arrogance of Ivan. It says alot that he will be having a webcast to "explain" the reasoning--after the fact.He must be catching some s**t from the managers.
Good Luck
Posted by: jim | Dec 10, 2005 10:33:18 PM
I got turned on to a management position by a truly great man and may I add truly admired by all that work for him-Associates and teamleaders alike.
His upbeatness had never waivered ! He always knew how to say the right thing and prefered to look at the brighter side of things....He called me into his cubicle-as the new floor plans don't offer a second level the privacy of their own personal office...not that there isn't any space for one
it's part of the New "Ivan & Co. " plan.
Well let me tell you how it went- This Man-A true leader amongst Men , outright broke down ...Just F!@#^n broke down ! It hurt me because this is just someone whom epitomizes honesty,values and integrity and this is what Verizon does....Heck I am not too worried for me because I aswell as many of my peers are done with the games and stepping off in new directions I have also been assured by many whom have to stay that they too are going to eventually leave , aswell some are planning to do it in conjunction with the 2008 STRIKE, but it is truly a low blow,
Posted by: Jarhead | Dec 11, 2005 12:52:33 AM
Anybody got the text of the memo that was sent to managers?
Posted by: Justcurious | Dec 13, 2005 4:42:03 PM
Requested txt of memo to managers -
Received 12/05/05 @ 20:24:
Management Retiree Benefits Restructured
Verizon will restructure its management retirement benefits effective June 30, 2006. These changes will affect management employees in Corporate, Domestic Telecom, Verizon Information Services and Verizon International.
"We are making a number of changes that will bring our plans more in line with current trends, including an enhancement to our savings plan to encourage employees to save and manage their own financial future, and a restructuring of our pension and retiree healthcare plans which will lower Verizon's ongoing costs," said Chairman and CEO Ivan Seidenberg. "These changes will begin the process of aligning the value of our benefit programs for management employees across all Verizon business units, including MCI management employees once the merger is completed. In addition, these changes will provide us with a more affordable benefit cost structure while maintaining a competitive total rewards program.
"This restructuring reflects the realities of our changing world," Seidenberg added. "Companies today, including many we compete with, are not adopting defined benefit pension plans or subsidized retiree medical benefits. We must ensure that we remain competitive. In addition, the trend is for employees to have greater personal accountability to manage their own financial accounts and for companies to offer greater portability through personal savings accounts."
Following are the three key areas where changes are being made:
Management Savings Plan
Verizon will increase the company's match for the management savings plan (401k) effective July 1, 2006.
Employees will have the opportunity to receive up to $1.50 for every dollar of the first six percent of eligible pay contributed to the plan. A match of a dollar for every dollar contributed up to the first six percent of eligible pay will be automatic, and the match may be increased by up to an additional 50 cents based on company performance at the end of each year.
For example, if an employee earned $50,000 and contributed 6 percent of pay, or $3,000, the automatic company match would be $3,000. If the company exceeds performance targets and the full performance-based additional match is approved, the employee's account would be credited with an additional $1,500, resulting in a full 9 percent company match in addition to the 6 percent employee contribution. The specifics of how the performance-based match will work are currently being determined and will be announced in the spring 2006 timeframe.
Management Pension Plan
Verizon management employees will not earn pension benefits after June 30, 2006.
Employees will be entitled to the benefits they have earned as of June 30, 2006. Employees with 10 or more years of service as of Jan.1, 2002, will be entitled to the greater of the value of their cash balance account or the traditional highest average pay pension.
Additionally, for management employees earning pension benefits as of June 30, 2006, Verizon will enhance the pension benefit earned as of June 30, 2006--adding 18 months of additional pay credits to cash balance accounts and, if applicable, 18 months of service to the calculation of the highest average pay formula.
Management employees can grow into early retirement eligibility with Verizon after June 30, 2006, but the additional 18 months of service will not count for this purpose.
Beginning Jan. 1, 2006, new management employees will not earn pension benefits.
Management Retiree Healthcare
Verizon management employees who have at least 15 years of service as of June 30, 2006, and who become eligible for company subsidized retiree medical coverage, will have their company subsidy toward retiree medical benefits calculated based on service through June 30, 2006. They will not earn service towards the company retiree medical subsidy beyond June 30, 2006.
For management employees earning retiree medical service credits as of June 30, 2006, Verizon will enhance benefits by calculating the subsidy percentage based on service as of June 30, 2006, plus an additional 18 months. Employees who have less than 15 years of service as of June 30, 2006, but who will attain 15 years with the additional 18 months, will be eligible for the retiree medical subsidy upon retirement.
Management employees can grow into retirement eligibility to qualify for retiree medical benefits based on service with Verizon after June 30, 2006. However, the additional 18 months of service will not count for determining if an employee is eligible to retire.
Employees who do not have 15 years of service with the additional 18 months of service added as of June 30, 2006, will not have any company subsidy for healthcare or life insurance. However, upon achieving retirement eligibility, they will have access to these plans at their own expense upon retirement.
The restructuring is expected, after the effect of the increase in the savings plan match, to provide pre-tax net savings to the company of approximately $3 billion over the next 10 years.
There is no specific action required of employees as part of this restructuring. However, more detailed information is available to help employees understand how this affects them individually.
A brochure with more detail is available on the eWeb. You are encouraged to read this material. Please click the following URL, or copy and paste it in your browser to go directly to the brochure: http://hr.verizon.com/p/comm/BrochureRetirementBenefits.asp
A Q&A document is also available on the eWeb. Please click the following URL, or copy and paste it in your browser: http://hr.verizon.com/p/comm/QARetirementBenefits.asp
Ivan Seidenberg and EVP-Human Resources Marc Reed will host an employee webcast on Monday, Dec. 12, at 2 p.m. (ET) to discuss these changes and take employee questions. For those employees who cannot view the webcast directly, it will be posted on the Web afterwards for viewing by employees later. Further details about the webcast will be available later this week.
Posted by: 22yrs | Dec 15, 2005 4:06:12 PM
When I had reporting people, I always supported their efforts during the strikes (I have seen several in my career). I would kind of like to be around just to see the unions put the royal screwing to Ivan (AKA scum sucking, maggot, parasitic bastard whom we all loathe)and the boys in 08. Just to further piss you off, here is a copy of something that was flying around at work the other day about the bitch Doreen Tobin.
A world unto itself
By Steve Bailey, Globe Columnist | December 16, 2005
It may be of some comfort to those 50,000 managers at Verizon Communications Inc. who are fuming about having their pensions frozen and losing their retirement health benefits to know that the people at the top know all about hard work and sacrifice. Take, for instance, Doreen Toben, Verizon's chief financial officer.
''Horses are an incredible amount of work," Toben told Fortune magazine two years ago. ''I was raised on a horse farm in Harding Township, N.J. My father worked on Wall Street. There were always horses on the property, and we grew up with horses and fox hunting with the likes of Jackie Kennedy and stuff. When you got home from school, you would have to muck your own stall. You would brush your own horses. You would groom your own horses."
Imagine the hardship. But to continue: ''My daughter does show jumping, and we have six horses. If you think of the Olympics with maybe one rail lower, that's the kind of jumping I'm talking about. We do horse shows every single weekend. It's a real bond between the two of us because we can talk about it. My husband talks to my son about basketball. It's also a very stay-out-of-trouble, all encompassing, wear-blue-jeans-and-a-T-shirt-with-no-makeup-and-your-hair-pulled-back kind of lifestyle."
It gets better: ''Our horses are warmbloods, which come from Europe. A thoroughbred, which you see on a racetrack, is considered a hotblood. The warmbloods are much more mellow, and they're also bigger. So we go over to Europe and buy them. Generally the ones that she has now cost someplace between $150,000 and $300,000. That's her cutoff. Some of these horses are half a million to a million. It really is a world unto itself."
Heaven knows, a mom has to draw the line somewhere. Toben and Verizon's senior management just decided the place to draw the line at the nation's second-largest telephone company is with the pension and retirement healthcare benefits for its managers, including 3,500 in Massachusetts. After next June, managers will stop earning pension credits and managers hired after the first of the year will receive no pension benefits at all. Verizon managers with less than 13 1/2 years with the company will no longer receive subsidized retiree medical benefits. Verizon's unionized workforce of 105,000, and its 210,000 retirees, fear they are next.
Toben declined to comment. Ivan Seidenberg, Verizon's CEO, said, ''This restructuring reflects the realities of our changing world."
This changing world will cost Ralph M. Casillas, a Verizon manager in Thousand Oaks, Calif., about a quarter of his pension, or about $101,000, he estimates. That wouldn't even buy a low-end nag for Toben's daughter, but for Casillas, 56, it means he will be working longer than expected. Says Casillas about Verizon's senior management: ''These guys don't know what the inside of a grocery store looks like."
Terminating pension plans is becoming common among big companies -- a promise broken to their own people. The three-legged stool of retirement -- your pension, your Social Security check, and your savings -- is looking pretty wobbly. In place of traditional pensions, we have 401(k) accounts, which have the advantage of moving with you from job to job, but in general are a poor substitute for what's lost. Last year, the average 401(k) account at Fidelity Investments had a balance of $61,000 -- which is less than it had six years ago.
Verizon's bosses are sharing the pain, freezing their own pension plans. They can afford it. Through the end of last year, the company had contributed $13.8 million to Seidenberg's pension plan and $11.9 million to president Lawrence Babbio's plan. Verizon contributed $3 million to Toben's pension. Last year alone, Seidenberg received $13.1 million in total compensation plus stock options worth $4.2 million. Toben received $4.5 million in total compensation and $1.3 million in options.
At the top, as Toben says, it really is a world unto itself.
Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902
Posted by: specialist | Dec 18, 2005 4:08:31 PM
"Verizon, We never stop messing with you"
Fabulous!!
"FTTP= Funding Technology Through Pensions"
Even funnier. You should see the Manger's version of "Twas the Night Before Christmas" that someone has floating out there...HILARIOUS! If it were not a power point, I'd copy and paste it here.
Posted by: ClarkWGrisswold | Dec 23, 2005 5:26:18 PM
Unfortunately it was too late for me to return to my Union position. I urge all to return if it's not too late. I was shop steward for ten years and got tired of being treated like crap and watching others treated the same. I know I could be a good supervisor, and I am. Now, not only did our medical triple and we lost our pensions, but we are piled so high with work (wouldn't want to hire anyone else to screw over) that it makes it impossible to be a good supervisor to my team. All this for a "satisfactory" review. Corperate police you know. Sigh, anyway, DON'T LEAVE THE UNION!! STAND STRONG!Long live IBEW, I miss it.
Posted by: Disillusioned | Sep 28, 2006 1:20:26 PM
At the time that these posts were written, I was let go from VZ land. There was made up stuff about me that got up the corporate ladder, Security got involved whom are also a bunch of liars and they let me go. This is what they do to good workers who are white males. They would rather hire minorities so they can mold them into their conservative ways through more work and less pay 'cause the minorities are used to make low wageswhile the higher ups put the boots to the employees while they ride horses like Toben. By the way, don't let her kid you, she never picked up a piece of horse poop in her life.
So, watch out for the Employee Resource Groups that VZ has. They make it sound like they care about the employee, but they are mainstreaming these cultures to outsource work. So when WAVE, the black and Asian groups start singing their song about how important diversity is, watch out, they got their hand on your bankbook and your future.
As to the pension, that's a shame. Why stay at VZ. It is just another company now. So to Allyson J. Joe B. Tom P. Colon F. you jerk, Kim G. you play favorites in your group, that's your punishment for letting me go. Next time, don't be so quick to judge 'cause someone said it was true. What do they know, nothing.
Posted by: Clarence | Aug 15, 2007 7:59:50 AM
