Atlanta, GA, August 7, 2011 — Comment from Jeff Kagan, Tech Analyst at www.jeffkagan.com
Thoughts On The Verizon Strike
This is the first strike at Verizon in quite a while. Perhaps 11 years. I remember the last strike. I commented on that as well and many of the same factors were in play. The industry was changing back then as it is changing today. This is something consumers and investors love, but workers hate.
The problem was then and is today that the workers see the company as successful and profitable and think the company should live up to its promises.
On the other hand the industry is changing and Verizon must change with it in order to remain competitive.
The traditional phone business across the country is shrinking. Verizon continues to grow competing in new sectors like wireless and FiOS. In these areas they are competing against non unionized companies.
There is a difference between how much it costs to operate a unionized and non unionized. It is difficult for a unionized shop to compete with a non unionzed shop financially.
On a personal level I understand the needs of the individual Verizon workers. On a business level I understand Verizon’s need to cut costs and remain competitive so they remain strong.
I guess what Verizon is saying is simply if they have higher costs than competitors they will have to charge more, then lose business, then the entire organization and all the investors suffer.
As difficult as it is to deal with from the employees perspective, this may be life in the continually changing industry that we all love as consumers and investors.
There must be some middle ground both sides can agree to. We’ll have to watch and see.
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Jeff KAGAN| TECH ANALYST | www.jeffKAGAN.com
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