Verizon CEO says Bernie Sanders is 'disconnected from reality'

Thousands of Verizon workers walk off the job
Thousands of Verizon workers walk off the job

Bernie Sanders isn't making a lot of friends in the business world.

After Sanders spoke at a rally of striking Verizon workers Wednesday, Verizon CEO Lowell McAdam lambasted the Democratic presidential candidate in a long LinkedIn post.

McAdam said Sanders' "uninformed views are, in a word, contemptible," and that the senator is "disconnected from reality."

Issue 1: Sanders said Verizon fails to pay its fair share of taxes

Sanders said Verizon "in a given year has not paid a nickel of taxes."

McAdam said Sanders is dead wrong: Verizon (VZ) paid more than $15.6 billion in taxes over the past two years, at an effective tax rate of 35%. That's the official U.S. corporate tax rate.

It's unclear what "given year" Sanders was referring to. It might have been 2013, when Verizon's tax rate was -4.8%. That was in part because Verizon Wireless was, at the time, 45% owned by Britain's Vodafone. It is now 100% American-owned.

Issue 2: Verizon doesn't use its profits to benefit America

bernie sanders verizon
Sanders a the Verizon rally

Sanders said Verizon is not investing in American communities, in particular the "inner cities."

McAdam said that's nonsense, noting that Verizon has invested about $35 billion in infrastructure -- virtually all of it in the U.S. -- over the past two years, making the company one of the top three capital investors in corporate America.

"We're making significant investments in New York City, Philadelphia and other metro areas throughout our wireline footprint," McAdam wrote in his LinkedIn post. "I challenge Sen. Sanders to show me a company that's done more to invest in America than Verizon."

Telecommunications companies are among the most capital-intensive businesses on Earth. That $35 billion isn't altruistic -- it's the cost of doing business.

Although Verizon has a landline footprint that reaches just about everyone from Massachusetts to Virginia, Verizon has repeatedly been criticized for rolling out its super-high-speed FiOS network only to wealthier neighborhoods.

Issue 3: Verizon is demanding workers take pay cuts and reduce health benefits

Sanders said Verizon will ship workers' jobs overseas if they don't agree to reduced benefits or pay.

McAdam countered that Sanders is oversimplifying a complex labor negotiation. He said Verizon has agreed to wage increases and continued pension benefits while asking for "more flexibility in routing calls and consolidating our call centers."

"Feeling the Bern of reality yet, Bernie?" McAdam quipped.

Verizon has outsourced about 5,000 jobs to Mexico, the Philippines and the Dominican Republic, and the company has contracted some U.S. jobs to lower-wage, non-union workers, angering the Communications Workers of America union.

Related: 36,000 Verizon workers go on strike

McAdam says the "facts of life" have changed, as wireless overtakes the landline and broadband business. He said Sanders is "ignoring the transformational forces reshaping the communications industry."

"Nostalgia for the rotary phone era won't save American jobs, any more than ignoring the global forces reshaping the auto industry saved the Detroit auto makers." McAdam said.

The Verizon workers' union, the CWA, endorsed Sanders. But Sanders isn't alone in his support of the union. Rival Hillary Clinton also sided with the striking Verizon workers, saying the company should give them a "fair offer."

GE CEO Jeff Immelt criticized Sanders last week for being out of touch, noting that "GE has never been a big hit with socialists."

Social Surge - What's Trending

Personal Finance

CNNMoney Sponsors