The thought of another standoff between Verizon ( VZ) and its labor unions has Wall Street wincing.

The nation's largest local phone company and one of its biggest unions have begun talks over agreements set to expire this summer. As usual, management and labor don't exactly see eye to eye, with each side hurling invective about the other's demands.

With two union contracts covering some 80,000 workers hanging in the balance and Verizon facing setbacks on a number of other fronts, investors can be forgiven for squirming a bit about the prospect of further acrimony. After all, Verizon and its regional Bell peers have sat out much of the spring rally that has swept across tech and telecom, as their softening core businesses and heavy debt load continue to discourage would-be buyers. And many on Wall Street remember Verizon's sharp pullback the last time it faced a strike, in the summer of 2000.

Verizon shares rose 18 cents Wednesday to $40.15.

Coming to Terms

Perhaps most alarming for investors watching the situation is how badly Verizon's business has atrophied since the last labor deal was forged. The New York-based company has since seen sharp drops in revenue and total access lines. And as big and powerful as Verizon is, the strike of 2000 dealt the stock a serious blow.

As you may recall, the last time it took an 18-day strike to bring the two parties into agreement, the episode cost the company about $2 million a day, or roughly 1% of its average daily revenue, according to Deutsche Bank analyst Viktor Shvets. But while the company shrugged off the strike's financial effects, the stock wasn't nearly as durable.

Verizon shares fell 12% to a 52-week low three days into the strike. Of course, the bitter labor negotiations merely compounded the company's troubles at the time. On Aug. 8, the company cut financial projections and reached an $800 million agreement to buy half of NorthPoint, a struggling digital subscriber line, or DSL, outfit. But bears would note that Verizon has its issues now, too.

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