Hawaiian Telcom Holdco, Inc. announced today that with collective bargaining between the Company and IBEW Local 1357 (the “Union”) having reached an impasse, the Company has informed the Union that the terms of the Company’s Last, Best and Final Offer will be implemented effective December 1, 2011.
Company and Union representatives began formal negotiations toward a new collective bargaining agreement (CBA) on August 15. In mid-September, a federal labor mediator was also engaged to help facilitate negotiations. The Company engaged in good faith bargaining throughout, but once meaningful progress could not be made, a Last, Best and Final Offer was presented to Union leadership in early October.
The Union rejected the Company’s Offer, and on November 10 and 11 held a 2-day work stoppage while delivering a set of CBA proposals to the Company that included:
- artificial acceleration of Union members’ accrual and vesting of pension benefits to minimums of 55 years old/25 years of service, regardless of actual age and service; immediate cost to Company: over $100 million;
- opportunity for each Union employee to purchase a personal computer reimbursed by the Company up to $2000; cost to Company: up to $1.4 million;
- expanded dental coverage to include cosmetic procedures and orthodontics: cost to Company: unknown;
- employee healthcare contribution of less than two (2) percent; and
- reduced sick leave for 2012, then gradually increased sick leave every year starting in 2013, until returning to the current levels of 26 weeks of fully paid sick leave per year plus the next 26 weeks at 58% pay.
Union leadership’s recent demands, work stoppage, and threats toward employees who elected to work during the work stoppage indicate that the period of good faith bargaining has passed.
The rules and processes governing collective bargaining provide a mechanism for parties to move forward when a compromise agreement is clearly not possible and negotiations reach an impasse. Hawaiian Telcom is proceeding according to those processes by implementing its Last, Best and Final Offer effective December 1, 2011.
The terms of the Company’s Offer – 1% annual compounded wage increase for 3 years, $500 bonus annually for 3 years, up to 8 weeks of sick leave, healthcare at 10% employee contribution, and enhanced 401(k) match while freezing pension at current values – reasonably consider the compensation and benefits packages of industry peers, the highly competitive telecommunications industry, and current economic realities. By implementing the Last, Best and Final Offer at this time, Hawaiian Telcom is acting with the best interests of customers, all employees, and the Company’s future in mind.
Forward-Looking Statements
In addition to historical information, this release includes certain statements and predictions that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, any statement, projection or estimate that includes or references the words “believes”, “anticipates”, “intends”, “expects”, or any similar expression falls within the safe harbor of forward-looking statements contained in the Reform Act. Actual results or outcomes may differ materially from those indicated or suggested by any such forward-looking statement for a variety of reasons. More information on potential risks and uncertainties is available in recent filings with the Securities and Exchange Commission, including Hawaiian Telcom’s 2010 Annual Report on Form 10-K and its Form 10-Q filed November 14, 2011. The information contained in this release is as of November 21, 2011. It is anticipated that subsequent events and developments may cause estimates to change.
About Hawaiian Telcom
Hawaiian Telcom Holdco, Inc., headquartered in Honolulu, is Hawaii’s leading provider of integrated communications solutions for business and residential customers. With roots in Hawaii beginning in 1883, the Company offers a full range of services including voice, video, Internet, data, wireless, and advanced communication and network services supported by the reach and reliability of its network and Hawaii’s only 24/7 state-of-the-art network operations center. With employees statewide sharing a commitment to innovation and a passion for delivering superior service, Hawaiian Telcom provides an Always OnSM customer experience. For more information, visit www.hawaiiantel.com
Filed under: Announcements, Economy, Hawaii, Technology | Tagged: Final Offer, Hawaii, Hawaiian Telcom, Hawaiian Telcom Holdco, Private Securities Litigation Reform Act | Leave a comment »
Councilman Pete Hoffman’s Budget Rumblings and the “800 Pound Gorilla”
I know this is only November, but the first rumbles from the next budget ‘brawl’ have appeared. Perhaps that’s not such a terrible thing; after all, the budget should remain one of the principal legislative measures throughout the year, particularly in time of economic distress.
First we have the announcement of the Operating Fund Balance for the prior fiscal year 2010-2011 ending 30 June 2011. The Mayor indicated that we have in excess of $24M as a fund balance, as compared to a $14M projected balance. That isn’t bad and the administration has the right to ‘pat itself on the back’ a little, as it demonstrated fiscal restraint and budget management. The administration cited cuts in expenses, hiring delays, and other actions that reduced costs and made the fund balance larger than estimated. In that analysis, however, I heard nothing about the fact that the FY 2010-2011 budget featured increased property tax rates, thereby generating additional revenue to offset lower property tax assessments. I remember arguing strongly against such rate increases as being unnecessary and potentially damaging to future investment. That advice was ignored, although the tax rate increases proved unnecessary and ill-advised.
Now the Council has entered the early phases of the budget battle with a proposal to alter the mileage reimbursement program for Councilmen. This is touted as the first of several measures designed to tighten expenditures. Currently, Council members have the option to claim a $600 a month flat rate stipend for mileage or else itemize claiming a $.55 per mile reimbursement. For some years, I was the only Council member who itemized mileage, (I understand Ms. Smart now itemizes as well), calculating that it would be to my advantage, most of the times, since I drove many more miles on County business. Some months, however, particularly if I were off-island, that reimbursement would be less than $600. Those who received the flat rate most likely were not driving $600 worth of miles and it is to their advantage not to itemize.
Mr. Yagong’s proposal is to have all Council members itemize mileage and reimburse for that amount only, eliminating the $600 flat rate option. Sounds good to me. I can support that proposal and whatever other changes the Council Chair wishes to make on this issue. We will save a little money along the way. And I’m certain there are other budget measures that can be taken to reduce expenditures. The Council should be prepared to consider each in turn. Some have criticized this effort as ‘election year politics’. Perhaps so. Let’s remember, however, that all Council members are participants in a political process called County government. Politics are part of that system and, with an election year just around the corner, we can expect a rush of similar measures to dot the landscape in the near future.
With that in mind, I have no difficulty supporting such ‘budget savers’. My only comment would be that there are many other such ‘savings’ that could be proposed that have much deeper impact on our strained economy. Consider for example that approximately 65% of the County’s budget is in some manner connected with personnel costs. When will we as a Council recognize that if real savings are to occur, some dent must be made in staffing? I know. This is an election year and not a good time to advocate personnel reductions. But until the Council and the administration jointly address that “800 pound gorilla,” all other proposals pale in significance and the cries of ‘just another political ploy’ will gain meaning among County voters.
As difficult as it may seem, we must be willing to deal with the controversial items at the same time we are willing to propose the small ‘savings’. The public will not be satisfied until we do, and our credibility as a Council will continue to suffer accordingly. Finally, to put the Council mileage issue in perspective, if anyone’s interested while we are considering budget ‘savings’, let’s not forget that the County continues to subsidize golf to the tune of $833K during this fiscal year in which we’ve deferred (not saved) some $29M in expenses.
Last item: since I’ve mentioned golf subsidies, I now understand that the County might be willing to raise the fees at the Hilo Course slightly in order to offset costs and hopefully break-even. I couldn’t agree more, and while I’ve argued this point for the previous two budget cycles, I salute the County’s willingness to now recognize this first step makes perfect sense during these tough economic times. Might the second step be to eliminate the $500K golf subsidy for West Hawaii?
We can expect to hear more about budget matters as we move forward. We do need to make the small changes. We also must have the courage to address the bigger items as well.
Pete Hoffman
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Filed under: Big Island, County Council, Guest Commentator, Hawaii | Tagged: Hawaii County Council Budget | Leave a comment »