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The Merger of The Merger of CenturyLink and QwestCenturyLink and Qwest
– – Implications for CWA MembersImplications for CWA Members
CWA Local Officer PresentationCWA Local Officer PresentationAugust 2010August 2010
Presentation for CWA Locals With Presentation for CWA Locals With Qwest and CenturyLink MembersQwest and CenturyLink Members
Overview and Status Report on Proposed Overview and Status Report on Proposed Merger Merger
A Tale of Two Companies -- Review of A Tale of Two Companies -- Review of Union Contracts at Qwest and CenturyLink Union Contracts at Qwest and CenturyLink
Meeting Challenges, Creating Meeting Challenges, Creating Opportunities – CWA’s Plans for Moving Opportunities – CWA’s Plans for Moving ForwardForward
Overview and Status Report on Proposed Overview and Status Report on Proposed Merger of CenturyLink and QwestMerger of CenturyLink and Qwest
Companies Claim Merger will Yield Companies Claim Merger will Yield Gains for Customers & ShareholdersGains for Customers & Shareholders
Increase availability of high speed Increase availability of high speed broadband access in largely rural footprintbroadband access in largely rural footprint
Expand availability of Internet TV servicesExpand availability of Internet TV services
Implement LTE wireless data accessImplement LTE wireless data access
Achieve significant savings through Achieve significant savings through “synergies” – elimination of duplicate “synergies” – elimination of duplicate services, increased economies of scale for services, increased economies of scale for costly capital expenditurescostly capital expenditures
Big Question: Can They Deliver?Big Question: Can They Deliver?
CenturyTel will be 8 times larger than it CenturyTel will be 8 times larger than it was before the Embarq purchase was before the Embarq purchase
High risk investment with lots of debtHigh risk investment with lots of debt– CTL will assume Qwest’s debt which is 5 CTL will assume Qwest’s debt which is 5
times more than it currently owestimes more than it currently owes
CTL is a rural local exchange carrier with CTL is a rural local exchange carrier with no experience with Qwest’s highly valued no experience with Qwest’s highly valued long-haul transport businesslong-haul transport business
Mergers Expand CTL 800% in 2 yearsMergers Expand CTL 800% in 2 years
0
2 ,0 0 0
4 ,0 0 0
6 ,0 0 0
8 ,0 0 0
1 0 ,0 0 0
1 2 ,0 0 0
1 4 ,0 0 0
1 6 ,0 0 0
1 8 ,0 0 0
C e n tu ry T e l3 Q 0 8
E m b a rq 3 Q 0 8 C o m b in e d3 Q 0 8
C e n tu ry L in k4 Q 0 9
Q w e s t 4 Q 0 9 C o m b in e d4 q 0 9
T o ta l Ac c e s s L in e s
Merger is Too Much, Too SoonMerger is Too Much, Too Soon
CTL has not yet completed its merger with CTL has not yet completed its merger with EmbarqEmbarq– Still integrating Embarq systemsStill integrating Embarq systems– Merger with Qwest will further distract themMerger with Qwest will further distract them
Failed to meet 1Failed to meet 1stst year broadband year broadband commitments, requested delay of FCC’s commitments, requested delay of FCC’s “1 Day Porting” order“1 Day Porting” order
Merger Must Be ApprovedMerger Must Be Approved
Federal Trade Commission determined Federal Trade Commission determined the merger passes anti-trust rulesthe merger passes anti-trust rules
Special shareholders meetings Aug 24Special shareholders meetings Aug 24
Federal Communications Commission Federal Communications Commission must determine if deal is in public interestmust determine if deal is in public interest
State commissions must ruleState commissions must rule
CWA to Express Concerns in FCC and CWA to Express Concerns in FCC and PSC ProceedingsPSC Proceedings
““determine whether… transaction serves the determine whether… transaction serves the public interest…”public interest…”
““specific and verifiable commitments to improve specific and verifiable commitments to improve service quality.”service quality.”
““concrete timetables and plans for systems concrete timetables and plans for systems integration”integration”
““assurances that the merged entity will not lead assurances that the merged entity will not lead to any reduction in employment levels, workers’ to any reduction in employment levels, workers’ living standards, and organizational rights.”living standards, and organizational rights.”
A Tale of Two CompaniesA Tale of Two Companies
A Review of Union Contracts at A Review of Union Contracts at
Qwest and CenturyLinkQwest and CenturyLink
Union Density Yields Union PowerUnion Density Yields Union Power
Non-Union
64%
Union
36%
CenturyLink
20,096 employeesQwest 30,138 employees
Non-Union
48%Union
52%
Combined Company
50,234 employees
Union
45%
Non-Union
55%
Union DensityBy Company
Union Power Delivers a Single Union Power Delivers a Single Contract at QwestContract at QwestQwestQwest
One ContractOne Contract51 Locals51 Locals14,384 CWA represented14,384 CWA represented100 IBEW100 IBEWIn 1989 bargaining, In 1989 bargaining, Pacific Northwest Bell, Pacific Northwest Bell, Mountain Bell and Mountain Bell and Northwestern Bell were Northwestern Bell were merged into a single merged into a single contract with USWest. contract with USWest. USWest was purchased USWest was purchased by Qwest in 2000.by Qwest in 2000.
CenturyLinkCenturyLink33 Contracts33 Contracts31 CWA Locals31 CWA Locals3,749 CWA represented3,749 CWA represented3,386 IBEW3,386 IBEWBoth CenturyTel and Both CenturyTel and Embarq are the results of Embarq are the results of many mergers and many mergers and purchases of smaller, purchases of smaller, rural companies over the rural companies over the years. years.
Union Representation at Qwest Union Representation at Qwest and CenturyLink Call Centersand CenturyLink Call Centers
6,438
497
4,997
5190
1000
2000
3000
4000
5000
6000
7000
Qwest CenturyLink CenturyLinkWork at Home
Union Workers Non Union Workers
Union Power Delivers Union Power Delivers Better WagesBetter Wages
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
Top Craft Customer Service Clerical
Top Wage Comparisons
Qwest CenturyTel Oregon Embarq Oregon
Union Power Preserves Better Union Power Preserves Better BenefitsBenefits
QwestQwest CTL CTL
Bargaining over Bargaining over BenefitsBenefits
Company must Company must bargain with union bargain with union over benefitsover benefits
Company must Company must notify union of notify union of change in benefitschange in benefits
PPO PremiumPPO Premium
(CTL: for those (CTL: for those earning $40-70K)earning $40-70K)
$47/month single$47/month single
$94/month family$94/month family
$34/month single $34/month single
$132/month family$132/month family
PPO Annual PPO Annual DeductibleDeductible
$250 single$250 single
$500 family$500 family
$300 single$300 single
$600 family$600 family
PPO Out of PPO Out of Pocket MaxPocket Max
$1,000/year single$1,000/year single
$3,000/year family$3,000/year family
$2,000/year single$2,000/year single
$4,000/year family$4,000/year family
Union Power Preserves Better Union Power Preserves Better Benefits (Continued)Benefits (Continued)
Network ServicesNetwork Services Qwest PPOQwest PPO CTL PPO CTL PPO
Office Visit Office Visit Co-PayCo-Pay
$25$25 $25$25
Inpatient Inpatient HospitalizationHospitalization 90/10 coinsurance 90/10 coinsurance
after deductibleafter deductible
$250 co-pay, then $250 co-pay, then 80/20 coinsurance 80/20 coinsurance after deductibleafter deductible
Prescription DrugsPrescription Drugs Generic/Formulary/NonFormularyGeneric/Formulary/NonFormulary
RetailRetail$10/ $30/ $50$10/ $30/ $50
$7/ 30%*/ 45%*$7/ 30%*/ 45%** *$35 min/$60 max ** $45 min/$100 max
Mail OrderMail Order $20/ $75/ $125$20/ $75/ $125 $15/ $80/ $140$15/ $80/ $140
CenturyLink’s Strategic Plan: Use CenturyLink’s Strategic Plan: Use Divide and Conquer to Gut ContractsDivide and Conquer to Gut Contracts
Current Arkansas NegotiationsCurrent Arkansas Negotiations
1% annual lump sums, no wage increases1% annual lump sums, no wage increases
Mgmt able to do bargaining unit workMgmt able to do bargaining unit work
Cutbacks in overtime payCutbacks in overtime pay
Concessions on disability, workers’ compConcessions on disability, workers’ comp
Challenges for CWAChallenges for CWA
Based on the Embarq experience, we knowBased on the Embarq experience, we knowwhat to expect:what to expect:
Company will move work to unrepresented Company will move work to unrepresented locations, where possible locations, where possible
Management will try to bargain contracts down Management will try to bargain contracts down to the lowest common denominator or lowerto the lowest common denominator or lower
Meeting Challenges, Meeting Challenges, Creating OpportunitiesCreating Opportunities
CWA’s Plans for Moving ForwardCWA’s Plans for Moving Forward
CWA Can Meet Challenges and Take CWA Can Meet Challenges and Take Advantage of OpportunitiesAdvantage of Opportunities
CWA’s Goal: Provide secure jobs with good CWA’s Goal: Provide secure jobs with good compensation throughout the companiescompensation throughout the companies
Union strength at Qwest has come from wall-to-Union strength at Qwest has come from wall-to-wall representation and one contract covering all wall representation and one contract covering all employeesemployees
CTL bargaining units can gain from experience CTL bargaining units can gain from experience of Qwest wall to wall representationof Qwest wall to wall representation
Success will depend on our ability to mobilize Success will depend on our ability to mobilize and organize to expand Union powerand organize to expand Union power
CWA’s Strategic PlansCWA’s Strategic Plans
1.1. Negotiate safeguards for workersNegotiate safeguards for workers
2.2. Educate and mobilize members to Educate and mobilize members to engage in community and political engage in community and political actionaction
3.3. Build power through organizing Build power through organizing unorganized unitsunorganized units
CWA’s Goals in NegotiationsCWA’s Goals in Negotiations
Employment guarantees Employment guarantees
Enhanced employment security provisionsEnhanced employment security provisions
Expand organizing rights in Qwest Expand organizing rights in Qwest contract to CTLcontract to CTL
Pave the way to share in company growthPave the way to share in company growth
Goal in Negotiations – Expand Goal in Negotiations – Expand Organizing RightsOrganizing RightsExpand Neutrality Language at Qwest to all CTLExpand Neutrality Language at Qwest to all CTL
The Company agrees to remain neutral during any organizing The Company agrees to remain neutral during any organizing campaign …campaign …
The Company agrees that when non-represented employees of the The Company agrees that when non-represented employees of the Company who perform duties similar to currently represented Company who perform duties similar to currently represented employees choose representation by CWA as a result of organizing employees choose representation by CWA as a result of organizing efforts, the Company shall apply this Collective Bargaining efforts, the Company shall apply this Collective Bargaining Agreement …Agreement …
In other instances in which employees of the Company choose In other instances in which employees of the Company choose representation by CWA as a result of organizing efforts (e.g., the representation by CWA as a result of organizing efforts (e.g., the Union has organized employees who worked for an acquired Union has organized employees who worked for an acquired company or who do not perform work that is similar to that of company or who do not perform work that is similar to that of existing represented employees), the Company shall apply the existing represented employees), the Company shall apply the grievance/arbitration procedures and other administrative provisions grievance/arbitration procedures and other administrative provisions of this Collective Bargaining Agreement to these newly represented of this Collective Bargaining Agreement to these newly represented employees unless otherwise agreed…employees unless otherwise agreed…
CWA Members Must Mobilize to CWA Members Must Mobilize to Express ConcernsExpress Concerns
Locals must educate and mobilize members to act in Locals must educate and mobilize members to act in their own intereststheir own interests
Raise concerns about risks of the deal for consumers, Raise concerns about risks of the deal for consumers, workers and communitiesworkers and communities
Contact Governors, State Legislators, Local OfficialsContact Governors, State Legislators, Local Officials
– Letters and visitsLetters and visits
Contact state PUCsContact state PUCs
– In states where CWA has not intervened, contact consumer In states where CWA has not intervened, contact consumer advocate and commissionersadvocate and commissioners
– In states where CWA has intervened, do NOT contact In states where CWA has intervened, do NOT contact commissionerscommissioners
CWA Locals Must Mobilize MembersCWA Locals Must Mobilize Members
In District 7 states:In District 7 states:
Educate and mobilize 5%-10% of membershipEducate and mobilize 5%-10% of membership
SIF funds available for lost timeSIF funds available for lost time
Generate handwritten letters to Governors, Generate handwritten letters to Governors, legislators (PSCs in non-intervention states)legislators (PSCs in non-intervention states)
Local Presidents to write Letters to EditorsLocal Presidents to write Letters to Editors
L/P coordinators set up meetings with key L/P coordinators set up meetings with key officialsofficials
Member-to-member action to get more lettersMember-to-member action to get more letters
CWA Locals Must Mobilize MembersCWA Locals Must Mobilize Members
In CenturyLink-only states:In CenturyLink-only states:
Educate and mobilize membershipEducate and mobilize membership
SIF funds available for lost timeSIF funds available for lost time
Generate handwritten letters to CWA Generate handwritten letters to CWA leadership for use in other statesleadership for use in other states
Local Presidents to write Letters to EditorsLocal Presidents to write Letters to Editors