The Problems Of A Legacy Business: Verizon's Union Freaks Out That Verizon Wants To Look Forward

from the what-a-shame dept

It's really sad to see some of the struggles that legacy businesses go through in trying to adapt to a more modern world, but not all of it is the fault of those businesses themselves. Look, for example, at what's happening with Verizon. Subsidiary Verizon Wireless -- which is 55% owned by Verizon -- began a marketing campaign pushing people to ditch their landline phone and go completely wireless. That's not a bad marketing campaign (and, in fact, might be a very good marketing campaign these days). So what happens? The union that represents Verizon's landline telco workers flips out and accuses the company of trying to undermine the union by helping Verizon get out of the landline business, so it can get rid of those workers. Seriously. First of all, there's little evidence to suggest that's true. Like most traditional telcos, Verizon still sees its basic landline business as a useful cash cow that I'm sure it intends to milk for as long as possible. Chances are, since VZW is a separate company, the marketing plan had nothing to do with the parent's marketing efforts. But, either way, at some point the company should be pushing customers to ditch landlines and other older technologies and embrace better solutions. Not because it puts old union guys out of work, but because it's where the market is headed.
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Filed Under: landlines, markets, mobile, progress, technology, unions
Companies: verizon, verizon wireless


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  1. identicon
    dkmarkins, 15 Jul 2009 @ 6:58pm

    Re: shedding legacy businesses

    The backlash of the sell of this Verizon territory is not commonly known. Not only has the service for the New England suffered, but Fairpoint is teetering on the edge of bankruptcy. The recent track record of Verizon sell offs has resulted in 2 companies filing bankruptcy and 1 teetering. Verizon is currently trying to get approval for another sell off ( or sell out - take your choice) of it's landlines to another smaller company. What this accomplishes for Verizon is a tax free cash influx of approx 3 billion dollars. Good for VZ's stockholders but what about Frontier's stockholders. The smaller company's debt leverage more than doubles. This is at a time when Frontier is forcing management to take 2 days a month off without pay. This does not sound like a company that is financial viable to purchase a territory that nearly triples it's current size. The consumer in this Verizon territory will experience even worse service and the commitments made to local governments by Verizon will not have to be honored. Where will the new company get the resources to meet these commitments? Incentive money from the government. That means from the taxpayers. Which does not mean Verizon because the money for this sale is tax free. There is no way we are ready to depend on unreliable cell sevice. The technology is not there yet, especially in rural areas. Maybe legacy businesses still serve a purpose. RE: unions. They are necessary. If the history of the union is studied, business has demonstrated the abuse they are willing to inflict upon the common worker. The threat of unionization keeps some non-union companies offering competitve wages and benefits. The strength of the unions may have become excessive but the environment has changed and companies are taking advantage of the change. As for the Verizon Business person who commented. I have had some interaction with MCI employees. Maybe you should find a union job somewhere. I as treated rudely, the knowledge base low, and the processes so parced out it took forever to accomplish simple tasks. Everyone had their own little piece of the pie and process had to be followed exactly or everything broke down. The process does work at if the service is not exactly what you have decided the customer should be getting. Verizon Business employees are responsible for a good portion of your own benfits and work at a lower pay in comparable jobs of union companies. You get what you pay for and maybe that explains the rudeness I encountered.

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