Verizon workers worried
By Dan Nakaso
Advertiser Staff Writer
The union representing Verizon Hawaii workers has received more than 50 telephone calls from members worried about how a possible sale would affect them.
"They're calling in concerned," said Jerry Genovia, business manager for the International Brotherhood of Electrical Workers, Local 1357. "The company hasn't released anything to us, so we'll only know if something comes down and it's concrete."
The IBEW represents Verizon Hawaii's unionized linemen, splicers, installers, transmission people, electronic technicians, telecommunication technicians, office workers and others who are among the company's 1,800 employees.
They're worried about reports that Verizon Communications Inc., the country's No. 1 telephone company, is talking to the private equity firm Carlyle Group about selling its local access lines in Hawai'i and upstate New York. Bloomberg News Service quoted people familiar with the situation as saying the Carlyle Group may pay $2 billion for Verizon Hawaii.
The companies would not comment on the report.
The IBEW has three years left on a five-year contract, which includes a "successor clause" that would obligate any new buyer to honor the existing contract, Genovia said.
"After that, we don't know," Genovia said.
Verizon officials in New York sent an e-mail to Verizon Hawaii employees on Thursday acknowledging that discussions about a sale have taken place, but the company did not specify whom it was talking to.
The Washington, D.C.-based Carlyle Group has more than 500 employees in 20 offices. It has invested in defense contractors such as Vought Aircraft Industries Inc. and United Defense Industries Inc. and financial-services companies including Korea's Koram Bank.
The Carlyle Group, with assets of $18 billion, last year completed the biggest leveraged buyout in 14 years with the $7 billion purchase of Qwest Communications International Inc.'s yellow-pages business, according to Bloomberg.
Frank Carlucci, a former defense secretary from the Reagan administration, was chairman for more than a decade. Former President George H.W. Bush and former British Prime Minister John Major have served as senior advisers.
The Carlyle Group invested a total of $2.5 billion last year and raised $2 billion in new capital. Carlyle spokesman Chris Ullman declined to comment on the Hawai'i lines.
A sale of Verizon Hawaii is unlikely to have much effect on residential customers because rates are regulated by the state Public Utilities Commission.
"The last time that a sale went through, or the merger went through for Verizon, there wasn't a change in rates in Hawai'i," said Cheryl Kikuta, acting executive director of the state division of consumer advocacy.
Verizon Hawaii became the name of the local phone company in 2000 when GTE Corp., owner of Hawaiian Telephone Co., merged with Bell Atlantic Corp.
Verizon Hawaii had 735,000 local access lines at the start of 2003. It ended 2003 with only 714,773 lines, according to figures that the company reported to the PUC.
The drop in lines is part of a national phenomenon, said Verizon Hawaii spokeswoman Ann Nishida.
"There is a lot of growth in e-mail, cable modem, instant messaging," Nishida said. "That's all competition and there's a lot of it."
While they're acknowledging the talks to their employees, Verizon officials also are telling customers that they will continue to get good service.
"We don't want our customers to worry," Nishida said. "These kind of discussions happen all of the time with a company as large as Verizon. Whether or not there is a sale, we will be here to serve our customers with the team that's here."
Bloomberg News Service contributed to this report.
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.
