Strikes are as bad for companies as a 7-10 split is for a bowler. Even a company like SBC Communications
It appears that talks between SBC, the No. 2 local telephone carrier, and its union, the Communications Workers of America (CWA), on a new five-year deal have hit an impasse. SBC claims that about 100,000 workers expect to go on a four-day strike starting in the wee hours Friday.
What we know about strikes is that they paralyze companies and put a strain on the wallets of workers. Previous strikes, such as the Verizon
SBC has not had to endure a strike of its workers in over 20 years, and this spotless modern-day record might soften the blow of any thought of a prolonged walkout. The company is very concerned about rising health-care costs but is willing to offer some coverage without monthly premiums.
The employees are focused on wages and job security. They are looking for raises in excess of 3%, but the company has been holding firm at 2.5%. Employees are also concerned that the company has eliminated an average of 10,000 jobs per year over the past three years and has been outsourcing jobs overseas to cut costs.
A four-day strike would send a message to management that the CWA means business, but it would also taint the stellar relationship the workers have had with the company. The CWA has already made it known that it will urge SBC customers to switch their service to AT&T
If the strike stretches past four days, competitors such as Sprint
Give your take on the CWA strike plans at the SBC Communications discussion board.
Fool contributor Phil Wohl spent over 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.