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NEWSWIRE
More than 6,000 telephone workers went on an island-wide strike Thursday
to try to stop the sale of a controlling stake of the government-owned
Puerto Rico Telephone Co. to a consortium led by the GTE Corp. The
strike began with several confrontations between picketers and the
police on the same day the Puerto Rico Senate approved the $1.8 billion
sale. The House was expected to do the same by Saturday. But the sale,
in which GTE has agreed to buy a majority stake in the telephone company
_ 50 percent plus one share _ for $375 million, is not expected to
be completed until the end of the year, pending regulatory approval,
including that of the Federal Communications Commission. Many countries
where telephone companies have been state monopolies, particularly
in Latin America, are privatizing the concerns. But the government
here has faced heated public opposition to selling what many view
with nationalistic pride as a profitable public asset that could compete
in an open telecommunications market. Workers also fear massive layoffs
from Connecticut-based GTE, which has said it would honor existing
labor contracts and would not dismiss any employees for at least one
year. Michael Masin, vice chairman of GTE and president of international
operations, said the company had yet to assess whether dismissals
would be required. But he added that the company planned to offer
financial inducements for workers to leave voluntarily if necessary
within the first year. He called the strike ``unfortunate'' and said
GTE was prepared to sit down with the two striking unions, the Independent
Brotherhood of Telephone Workers with 2,000 members and the 4,400-member
Independent Telephone Workers Union, to deal with their concerns.
The strike's first day began on a violent note when shoving matches
broke out broke out between riot police officers escorting managerial
workers to their offices and striking workers who tried to block their
way at several buildings here. In a chaotic early-morning scene captured
by television cameras, police officers hit and jabbed workers with
nightsticks as they clung to an entrance gate to prevent anyone from
entering. About 1,400 of a total of 1,800 management employees made
it to work on Thursday, the telephone company said, with some ferried
by helicopters to the roof of the telephone company's headquarters
here. Others rushed through picket lines with food and pillows. Superintendent
Pedro Toledo of the police department recommended long stays for those
working to minimize confrontations. The police said there had been
only one arrest, that of a worker accused of spraying the police with
a substance similar to Mace, and two incidents of sabotage that left
some San Juan neighborhoods without telephone service. While customers
found it hard on Thursday to get directory assistance and operator
service, company officials said regular phone service was virtually
normal throughout the island of nearly 4 million residents. The partial
sale of the telephone company is part of a privatization program initiated
by Gov. Pedro Rossells. In an interview on Thursday, he said that
telecommunications legislation enacted by Congress in 1996 mandated
an end to the telephone monopoly here and that he envisioned more
efficiency, better service and lower rates after the company passed
to private control. ``We see no reason for the government to be an
additional and ineffective competitor,'' he said. Union leaders, however,
have criticized the deal struck with GTE as too favorable for the
buyer, and political opponents have accused the governor of selling
the company short in order to finance some of his electoral promises.
Under the terms of the agreement, the government of Puerto Rico would
receive $1.8 billion for the majority share of the company, of which
a consortium that includes GTE, Banco Popular of Puerto Rico and other
local investors would pay $375 million, a cash figure critics find
too low. The other $1.5 billion would come from a commercial loan
taken by the privatized telephone company. The government of Puerto
Rico would retain at least 44 percent ownership after contributing
a 3 percent interest to an employee stock ownership plan and offering
to sell an additional 3 percent interest to employees for that plan.
The money from the sale would go to pay off the telephone company's
current debt, finance certain retirement and health-care benefits
for company employees and establish a $1 billion fund to invest in
public works like sewage systems and water distribution systems. ``We
have worked to maintain Puerto Rico Telephone at its present level
and have shown ourselves to be productive workers and the people of
Puerto Rico know it,'' said Olga Grajales, 43, a striking employee
who works in the billing and collections department. ``The people
know that really what they're doing is a theft.''