Qwest, Unions Extend Labor Negotiations Past Deadline

By Whitney Kisling

Aug. 17 (Bloomberg) -- Qwest Communications International Inc., the third-largest U.S. local phone company, and two unions extended a midnight deadline on labor contract talks to avert a strike of more than half its employees.

Talks will continue, according to a Qwest statement. Qwest didn't provide a new deadline. The Communications Workers of America and the International Brotherhood of Electrical Workers are negotiating wage increases, health-care benefits and future union jobs.

``Qwest will continue to bargain in good faith and remains committed to reaching an agreement as soon as possible,'' the company said in the statement.

The unions represent about 20,000 workers, or 57 percent of Qwest's employees. A week ago, workers authorized a call for a strike if the two sides didn't reach an agreement by midnight local time tonight. The contract expires a week before the start of the Democratic National Convention in Denver, where Qwest is based.

``We're prepared to reorganize the company temporarily should we need to,'' Qwest spokesman Bob Toevs said Aug. 15 in a telephone interview. ``It's something we do in every bargaining cycle.''

The unions mostly represent customer-service workers and technicians who install and maintain lines. The CWA covers employees in Qwest's 14 West and Midwest states except Montana, where the IBEW covers about 200 employees. Qwest has about 12 million phone lines.

Losing Lines

Qwest lost 1.08 million phone lines in the 12 months ended in June as customers defected to cable companies and wireless service. The company, third behind AT&T Inc. and Verizon Communications Inc., this month reported a 24 percent drop in second-quarter profit and cut its annual forecast.

Qwest rose 6 cents to $3.92 on Aug. 15 in New York Stock Exchange composite trading. The shares have dropped 44 percent this year.

Negotiations began July 8. The unions want to limit employee health-care premiums, increase wages and ensure there are future union jobs. The three issues are equally important, said spokeswoman Candice Johnson, declining to give further details.

Last year, Qwest cut its benefits costs to $39 million, an 81 percent reduction from 2006, after changes to post-retirement benefit plans, according to the company's annual report.

``Workers have made substantial sacrifices over the years,'' Johnson said.

Qwest's last union contract negotiations were in 2005, when the company averted a walkout by agreeing to a 7.5 percent wage increase over three years.

The two unions agreed on a new contract with Verizon a week ago. Under those terms, New York-based Verizon will increase workers' wages about 10 percent over three years and continue to provide fully paid health-care premiums for current employees.

To contact the reporter on this story: Whitney Kisling in Washington at wkisling@bloomberg.net