It looks like Verizon's (NYSE: VZ) union workers aren't the only ones unhappy with the terms of their contract as Hawaiian Telcom's (Nasdaq: HCOM) main union, the International Brotherhood of Electrical Workers Local Union 1357 (IBEW 1357), went on strike this week.
The IBEW's decision to go on strike follows what the telco says was its "last, best and final offer" for a new collective bargaining agreement it presented to the union in early October.
Like Verizon and other larger telcos that have been restructuring contracts with their respective union workers, Hawaiian Telcom was also looking for a number of concessions. Among the new changes, union workers would have to contribute 10 percent to healthcare premiums for employee and dependent coverage and they would get a 1 percent pay increase and a $500 bonus each year over the life of the contract.
However, the union, which currently represents 700 employees of its 1,300 workforce, decided that the deal did not meet their requirements and decided to strike in protest.
Although Hawaiian Telcom did warn consumers and businesses that there could be delays in fixing service issues that arise during the strike, the service provider has already activated its readiness plans to minimize any service and repair delays.
"While we hope to return to normal operations soon, we sincerely apologize to our customers for any temporary inconvenience due to the union's action and ask for their patience and understanding during this period," said Scott Simon, Executive Director - Corporate Communications for Hawaiian Telcom in a statement.
Much of the telco's management and non-union employees have been cross-trained to fulfill other functions like network repair. In addition, it has established agreements with local and mainland contractors to help out during the strike.
The strike comes at a time when Hawaiian Telcom has returned to a path of profitability as evidenced by its Q2 2011 results (its Q3 2011 results will come out on Monday) following its emergence out of Chapter 11 protection last October.
George Waialeale, an IBEW member, said in a Hawaii Reporter article that union members feel they are being short changed as the compensation of Eric Yeaman, Hawaiian Telcom's President and CEO, rose from $1.32 million in 2009 to $6.72 million 2010.
"This is what I call "The Pie Theory"--Eric gets more and the employees get less," Waialeale said. "Many working people believe that we should take care those who work hard and reward them for their hard work. It appears that Eric Yeaman has been rewarded beyond all reason; and at the same time he has forgotten about the employees who work each day to make Hawaiian Telcom a better company. I suggest that we reverse "The Pie Theory" Eric should receive LESS and the employee's should get MORE to send the right message about performance incentives."
For more:
- see the release
- Hawaii Reporter has this article
Related articles:
Hawaiian Telcom completes amendment of $30M credit facility
Hawaiian Telcom surges to second straight quarterly profit
Hawaiian Telcom stays mum about its IPTV strategy
Hawaiian Telcom begins trading on NASDAQ