Analysts are looking back on the 15-day US WEST strike that ended Monday with some surprise, saying it punctuates changes unfolding in the telecommunications industry.
Players in the strike are still assessing the fallout and sifting through the proposed three-year contract US WEST's largest union has yet to ratify.All agree the strike is likely to exact a price on the company. US WEST announced Wednesday it will spend $10 million to clear strike-related service backlogs.
"Whether they've specifically lost business I can't say, but I can say with a great deal of certainty they have lost goodwill," said Eileen Eastman, director of telecommunications research for the Yankee Group in Boston.
Sour feelings among customers about US WEST or its workers could give competitors a new foothold as they work to lure customers away from what used to be the only local telephone company in town. Several companies are now offering local telephone service to businesses in the Salt Lake and Ogden areas. A spokesman for one, Electric Lightwave, said only time will tell whether the strike sends disaffected US WEST customers his way.
As labor contracts expired Aug. 15, US WEST held fast to its proposal to put all new employees on a pay structure that included a base salary plus a pay-for-performance component.
The union balked and also demanded the company reduce the amount of forced overtime its members were being required to work.
As the strike began, the company was vocal about how it faces new competition and was quick to point out acts of vandalism and harassment, implicating striking workers. The union was equally vocal in its complaint about forced overtime, its flat-out rejection of the pay-for-performance plan and the company's strike-related publicity campaign.
The tentative agreement announced Sunday night makes the pay-for-performance plan strictly optional for all employees. It also includes a company promise that forced overtime will incrementally decrease to no more than eight hours per week by 2001. Wages and benefits will climb just over 11 percent when compounded over the life of the three-year labor agreement.
"What I'm seeing is very good news for Utah employees," said union Salt Lake Local 7704 President Gail Metcalf. Some customers adversely affected by strike-related service delays "are probably looking elsewhere for services," she said. "I would hope that customers would understand that US WEST has the best ability to provide total telecommunications services at the local level . . . but I believe some of their good will with customers was lost."
"In the short term, the union benefited from its own lack of foresight," said Jeff Kagan of Kagan Telecom Associates in Atlanta whose industry clients include many of the Baby Bells. Kagan believes the contract is sweeter than the company will be able to afford - even though US WEST brought in $1.25 billion in profits last year. "In the long term, US WEST will lose business (to competitors) and they'll have to start laying people off. The union doesn't understand the profound changes about to take place in the industry."
Observers characterized the strike that affected 13 of the 14 states in US WEST's territory as unusually heated. Unfriendly rhetoric flew from both sides from the very start. "I was very surprised about the position US WEST was taking," Eastman said. "US WEST was putting out ads (during the strike) that just fueled the fire. . . . You can't unsay things that you said."
Adverse effects of the rhetoric will linger for some time both in and outside the company. "There was a lot of bickering going on on both sides," Metcalf said. "Management probably has some animosity towards the union, as does the union towards the management."
"There are a lot of internal ramifications in a strike like this," Eastman said.
US WEST's post-strike damage control with its customers is a $10 million investment in equipment and additional wokers who will help clear a backlog of customer service and repair issues.
"With this new investment, many customers should begin noticing the difference immediately," said Fran Dolan, network operations vice president. "These additional resources also will give a jump start to bigger construction projects, enabling developers to meet commitments to their customers. It's an all-out effort to return service to pre-strike levels."