BONN -(Dow Jones)- Deutsche Telekom, Friday said that the telecommunications firm will execute on its plans to set up three new service units by July 1 despite protests from its staff, including almost two weeks of strikes.
But Deutsche Telekom Chief Financial Officer Karl-Gerhard Eick told reporters that the company is still striving to reach an agreement with labor union ver.di, which has opposed the plans and has been organizing the strikes.
"We invite (ver.di) again to return to the negotiating table," the CFO said.
Deutsche Telekom will transfer up to 50,000 staff from its fixed-line unit into three new service units - call centers, technical infrastructure and technical service - with the aim of lowering labor costs by cutting wages.
Under German labor law a company needs the approval of staff representatives and unions when it amends labor contracts.
In April, ver.di walked away from the negotiating table, rejecting Deutsche Telekom's proposal to cut wages by 12% over a 30-month period, while at the same time pledging to forego layoffs until 2010.
The company has since endured strikes at its fixed-line units for almost two weeks, with the number of staff participating ranging from 10,000 to 20,000 a day.
Deutsche Telekom said it is willing to extend its job guarantee for the staff in the service units beyond the current proposal if negotiations are restarted.
Furthermore, Deutsche Telekom personnel director Thomas Sattelberger has said the company has already offered a job guarantee until the end of 2011 in recent negotiations.
However, Eick warned that, if no deal can be reached with the labor union, Deutsche Telekom will simply implement existing labor agreements it has in place for T-Mobile call-centers and Viventi Technical Services - two units which could be transferred into the new service units.
Eick said the implementation of these labor agreements would mean some of the company's staff working under even worse conditions than it is offering in its new proposal.
Ver.di has disputed the legality of applying the existing labor deals to the new units, arguing that under German labor law, new labor deals need to be struck for the new divisions.
Deutsche Telekom needs to lower its cost base in Germany as its fixed-line unit is rapidly losing business to smaller low-cost rivals.
On Friday, more than 15,000 Deutsche Telekom workers again went on strike.
Deutsche Telekom's fixed-line chief, Timotheus Hoettges, said the strikes are hampering some of the unit's operations, such as linking up new customers and fixing technical disruptions.
But he added that the strikes aren't affecting its call-center and network operations and also won't jeopardize telecommunications at big projects like the upcoming G8 meeting.
Company Web site: http://www.telekom.de
-By Richard Breum and Joon Knapen, Dow Jones Newswires; +49-30-28884127; joon.knapen@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 25th May 2007
Posted to: www.cellular-news.com/story/23974.php