GTE California offers CWA new, three-year labor contract worth $40 million in wages, $35 million in incentives

Business Wire, April 15, 1996

THOUSAND OAKS, Calif.--(BUSINESS WIRE)--April 15, 1996--GTE California Monday presented the Communications Workers of America with a three-year labor-contract offer that includes $40 million in wages and targeted incentives of $35 million, as well as improved benefits for about 9,000 hourly employees.

``After 13 weeks of serious labor negotiations with the CWA bargaining unit, we believe we've arrived at a fair and equitable settlement package,'' said Ron Johnson, GTE region director-human resources and head of the GTE negotiations team.

``We're offering an attractive combination of wages, benefits and working conditions that will provide our hourly employees with significant earning incentives and improved benefits,'' Johnson said. ``In addition, this package will greatly strengthen GTE's ability to compete in this highly competitive environment.''

Johnson presented the proposal to the CWA bargaining team Monday morning. He said he is hopeful that an agreement for a new labor contract can be reached soon.

The offer, if accepted by the CWA bargaining unit, would be sent to union members for vote. If approved (usually about a three-week process), the new agreement would affect hourly employees of GTE California and GTEL, its deregulated subsidiary.

Johnson called the proposed pact ``generous, realistic and in keeping with the spirit of past GTE labor agreements with the CWA. As in the past, we're offering our hourly employees a benefits, wages and compensation package that is consistent with or better than others in our market, and one that should keep them ahead of inflation in terms of real buying power.

``For example, from 1991 to '95 the inflation rate was 10.7 percent in Southern California and 13.9 percent nationally,'' he said. ``During that period, GTE California gave hourly employees compensation totaling 18.1 percent, including their Team Performance Award (work group incentive) bonus payments.''

Under the new pact, about 7,000 of GTE's and GTEL's hourly employees will receive incentive compensation through the TPA, while about 2,000 employees will receive additional compensation through individual incentive plans.

Johnson said the new contract offers employees even better TPA bonuses than in the past. Under the new agreement, they could receive TPA payouts of as much as 3 percent, 3.6 percent and 4.8 percent, respectively, for 1996, 1997 and 1998.

Average Hourly Wage About $19

Under the new contract, the average wage for a GTE hourly employee would about $19. GTE would guarantee wage increases of 8.5 percent over the next three years for all hourly positions except for operators, business sales associates, language-assistance business sales associates, customer-contact sales associates and language-assistance customer-contact sales associates.

Hourly Compensation Similar to Management's

``For several years, a major portion of our management employees' compensation has been tied to incentives related to achieving goals in reducing our company's costs and improving our quality of service and revenues,'' Johnson said.

``Now, hourly employee compensation will be more closely linked to measurements used for compensating management -- and these are criteria tied to critical business realities here in California's competitive business environment,'' he said.

Operator Incentives

GTE operators would receive a 2 percent general wage increase in 1996 upon contract ratification. Thereafter, they could increase their earnings through an incentive plan that would give them the ability to earn up to 4.7 percent in 1997 and 5.9 percent for 1998.

``By giving operators incentives, we're accomplishing two important things,'' Johnson said. ``First, we're giving them the opportunity to substantially increase their annual earnings through achieving critical performance standards.

``Secondly, we're addressing a cost issue. Our operators here in California have the highest pay schedules of any GTE operators nationwide. We need to contain costs in this area to compete with newcomers -- competitors who could undercut our costs and potentially jeopardize our operators' jobs.''

Johnson said the company is attempting to accommodate the CWA's concern about operators' job security by creating a lower-paying job classification in operator services -- called ``operator II.'' Under this arrangement, current GTE operators would continue to work and be paid under their existing pay schedules.

However, with the new operator job classification, GTE could explore new ventures or contracts for providing operator services more competitively, and provide such services in a more cost- effective manner.

Sales, Language-Assistance Incentives

For customer-contact sales associates and language-assistance customer sales associates, these employees would get a general wage increase of 2 percent in 1996, with a targeted incentive of 6.7 percent in 1997 and 8.7 percent in 1998.

GTE would pay business sales associates and language-assistance business associates a lump sum of $900 each upon contract ratification, with the incentive plan tentatively scheduled to begin July 1, 1996, and continuing through the duration of the agreement. These employees would have a targeted incentive of 8.1 percent annually.