Strike shows risks of work stoppages in ailing industry

It was the largest strike of 2014, pitting a telephone company in the declining landline business against its 1,700 workers in Maine, New Hampshire, and Vermont.

When the painful 18-week fight was over, both sides claimed victory. But in truth, the "victories" were costly for both sides, underscoring the limits of the labor movement in many of the aging, problem-plagued industries it calls home.

On one side was FairPoint Communications, a company asking workers for more than $700 million in concessions as it struggled back from a 2011 bankruptcy. On the other side, two tenacious unions - the Communications Workers of America and the International Brotherhood of Electrical Workers - pushed back, decrying the company's demands as excessive.

In the end, FairPoint didn't get nearly everything it had wanted in terms of cost savings, casting doubt on the company's ability to remain competitive. But the two unions also emerged facing a major question: Does their traditionally adversarial approach to labor relations pose big risks to all parties - employees, companies, and communities - in beleaguered sectors of the economy? Indeed, after having made substantial concessions to FairPoint to end the walkout, workers returned to their jobs, only to see the company cut 200 positions after announcing financial losses that it attributed to the lengthy strike.

In many ways, the FairPoint saga shows the challenges faced by old industries, from newspapers to landline telephones, as they try to adapt their traditional business models to compete in the digital age. More than that, the experience of FairPoint and its unions is a cautionary tale whose lessons have resonance in Philadelphia, where 10,000 communications and electrical workers are entering into contract negotiations with telephone companies that face less-than-bright prospects in the landline business.

Already, the unions representing these workers are staking out tough positions and hurling invective at Verizon and other firms. "The phone company never gave us a thing," says one CWA flier circulating among members. "Once again, Verizon will test our resolve. We will have to be tougher than ever."

FairPoint faced a stark reality: It was in a declining sector. According to the most recent Census data, 71 percent of households had landlines in 2011, down from 96 percent in 1998 - the result of mobile phones' soaring popularity.

The unions sought to cast the outcome as a victory, saying that they beat back the most Draconian elements of FairPoint's initial proposal.

But some union members were not so enthusiastic, "I wish I could be more positive about it, but I don't know," Alan Castonguay, a FairPoint mechanic from Livermore, Maine, told the Portland Press Herald. "We lost a lot."

FairPoint and Wall Street say the company did what it had to do to position itself for survival.

"They've gotten a much more competitive compensation structure with the unions," said Barry M. Sine, a Wall Street analyst with Drexel Hamilton. "They've reduced obligations on the balance sheet."

What the future holds for FairPoint and its workers is unclear. But this much is apparent: If this industry has any hope of thriving once again, labor and management can hardly afford more such costly confrontations.

Source: Philly.com