IBEW LOCAL UNION 1357

BUSINESS MANAGER'S REPORT

May 2, 2008

1.  I met with Hawaiian Telcom CEO Steve Cooper on May 1st and our discussions centered around:

•  The financial state of the Company --- Although HT continues to lose access lines and revenues, the Company's financial liquidity projection is solid for the next 2 years.

• The recent announcement of Metro One exiting Hawaii --- The CEO referenced the relatively short notification from Metro One, about its financial problems and its plans to exit Hawaii. The vendors in Hawaii were not able to support HT's business requirements and HT is currently looking at our PTI members in Saipan as an alternative. The Union did lobby to bring the Call Center home. However, the equipment necessary to properly service our customers is not available, and given the short timeframe, HT would have a difficult time standing up the business.

• The strategic plan for the future of Hawaiian Telcom --- There is recognition from Mr. Cooper that we cannot exist and hope to survive with the current products and services that we offer. Plans have been presented to the HT Board of Directors, and with the Board's concurrence, HT is moving to implement those initiatives.

• Pension concerns --- With the recent shut down of Aloha Airlines, negative pension editorials in the newspaper, and the current economic slump we are experiencing nationally, many members have been asking what happens to their pensions in tough times.

          As we have addressed in earlier reports, the Pension Fund is currently overfunded by 44 million dollars and

          the performance of Hawaiian Telcom does not directly impact the fund.

          The Company will be addressing the concerns of the employees with regards to the pension plans within the

          week. The Union has also been in contact with our representative, Ben Ayson, of Honolulu Actuarial

          Consultants and we will also be communicating the impact of tough economic times on our members.

• Bargaining --- Mr. Cooper recognizes the need to address the bargaining issues of HT employees and has reiterated the commitment  to get the contract done.

          Given the current economic conditions of the Company, the State and the Nation, our members must be

          ready for tough negotiations. International Representative Harold Dias, Jr., President Ted Furukado and the

          bargaining team have been working diligently on our preparation for the bargaining session scheduled for

          June.

2.  With the recent announcement of Metro One leaving Hawaii, PTI CEO Larry Knecht has advised us that they have been approached by Hawaiian Telcom to help stand up HT's Directory Services business. The CEO has indicated the potential for 20 new members should the contract go through. Mobi Wireless has also been looking at PTI for assistance.

Because of the transitional issues with Directory Services and PTI's recent purchase of IT&E, the Company has asked the Union to resume discussion on the performance incentives in June.

Meanwhile, our Unit 10 members will be asked to continue their efforts to grow our membership in the CNMI and Guam.

3.  As we prepare for bargaining, the Union staff has been meeting with the various work groups to discuss what we need to do as responsible Union members.

• GPS (if you are going to deviated from practice, notify your boss)

• Be the best service providers with the products we have

• Drive your referrals into the Retail Stores and support the HE'E program

• Be safe

• Help your fellow brothers and sisters get better.

No different than our Sisters and Brothers who recently ratified a 4-year agreement with PTI, it was the responsible behavior of our members that positioned the Union to close the deal.

Please stay informed and involved.