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Wednesday, October 28, 2009

Unions balk at FairPoint’s calls for $30m in concessions in plan

FairPoint Communications has reached an agreement with a group of its lenders to reduce its debt by more than $1 billion, but it comes with conditions, according to Monday’s bankruptcy filing. Among them: at least $30 million in concessions from its 1,450 union workers in New Hampshire, Maine and Vermont.

The unions, which are working together with shared counsel and bankruptcy experts, have not agreed to that figure, according to Glenn Brackett, business manager for International Brotherhood of Electrical Workers Local 2320. The union represents more than 1,000 FairPoint workers.

“That’s a number, as far as we can tell, that they just pulled out of the sky,” Brackett said. “There’s been no justification to it.”

FairPoint bought the three-state landline network from Verizon last year and took over operations at the end of January.

The company filed for Chapter 11 bankruptcy protection Monday, citing a total of $2.7 billion in debt and declines in its revenue and customer base.

Chairman and CEO David Hauser acknowledged during a press call Monday that the company is asking the unions, which also include Communications Workers of America Local 1400, for concessions but has given few details. He said they could include changes to work rules and a rollback of wage increases.

FairPoint’s filings detail an agreement the company has made with lenders that hold a majority of FairPoint’s $2.1 billion in bank debt.

Attached to one is a list of conditions that includes concessions.

The agreement will be “null and void unless, prior to the plan deadline (Dec. 3), the company’s unions for the (northern New England) operating companies agree to a minimum of $30 million in annualized cost reductions,” the filing says.

Hauser had not previously said how much the company is looking for.

He said management could see cuts in the form of health care changes and wage increases deferred. He doesn’t want to cut current wages for management or union workers.

Hauser said layoffs are possible, though he didn’t specify whether he was referring to union or nonunion workers.

Brackett said the banks made billions of dollars in “lousy investments.” Coming to the workers for $30 million is unacceptable, he said.

“This was never a labor issue,” he said. “It’s never been a worker issue. It’s been poor investments and enormous debt.”

Don Trementozzi, president of the Communications Workers chapter that represents about 450 workers, said the unions are in “listening mode.” He also emphasized that the company’s trouble is due to no fault of the workforce.

Thirty million dollars is a “huge number,” he said. “I don’t know what it means. Layoffs? I hope not. I think the company needs every frontline worker to make this company successful. At the end of the day, I don’t think they can lay off anybody.”

A FairPoint spokeswoman said it was appropriate for the company and unions to have conversations. She would not comment on what those entail, saying nothing has been agreed to.

By way of comparison, the state has just laid off 192 people and demoted or reassigned 88, with an additional 16 taking retirement, in order to meet a legislative mandate to cut $25 million in personnel costs.