Verizon eyes margin improvements, labor contract

* Eyes cutting business products from 4,000 to few hundred

NEW YORK, Sept 21 (Reuters) – Verizon Communications (VZ.N)
is looking to boost profit margins in its traditional wireline
telephone business through a new labor contract, restructuring
its business services products and cost cuts in other areas,
according to its Chief Executive Lowell McAdam.

McAdam said the company wants a labor contract that helps
it operate more efficiently. He is also looking to cut costs by
reducing the number of business products it offers from
thousands to hundreds.

On the labor front McAdam said the company is making
progress with unions representing 45,000 workers and expects
them to come up with a proposal for a new contract that would
address the concerns of both sides by Oct. 1.

“I’m encouraged over recent dialogue. The union, by October
1 has committed to giving us a proposal,” Chief Executive
McAdam told the Goldman Sachs Communacopia Conference.

The company has been negotiating since late August after a
two week strike. Verizon wanted big changes in areas such as
benefits and work rules but the unions said it was asking for
too many concessions all at once.

The biggest issue for the union is jobs because the company
has outsourced a number of jobs in its telephone business.

For two weeks after technicians and customer service
representatives walked off the job Verizon asked thousands of
managers to try to cover for the striking workers.

McAdam said that while they were on strike duty, many
managers had come up with suggestions about where the company
could operate more efficiently and cut more costs.

“The strike was a great opportunity” from that perspective,
McAdam said.

The executive said that Verizon is also looking for more
efficiency in its business services division, which offers
about different 4,000 products.

“We’re going to streamline those down to a few hundred,”
McAdam said. “It’s our goal to expand margins on the wireline
side.”
(Reporting by Sinead Carew; Editing by Derek Caney)

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Article source: http://www.reuters.com/article/2011/09/21/verizon-idUSS1E78K0GP20110921

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