Mon, Apr 09, 2012 - Page 10 News List

AT&T fails to reach deal with union

TELECOMS IN TURMOIL:Unions are trying hard to maintain benefits they have secured in past years, but AT&T is facing declining margins in a beleaguered sector

Bloomberg

AT&T Inc, the largest US phone company, failed to reach agreement with one of its unions to renew two employee contracts and said it will extend negotiations to reach a deal.

AT&T, based in Dallas, and Communications Workers of America (CWA) did not agree by the April 7 expiration of the East and Legacy T Core wireline contracts, the carrier said in a statement published yesterday.

The Communications Workers of America is renegotiating four separate contracts with AT&T, affecting a total of 40,000 workers. On March 31, union members voted to authorize CWA to call strikes if agreements on new contracts could not be reached.

AT&T continues to negotiate with the CWA in the Midwest and west, where the contract expired at 11:59pm, according to the carrier’s statement.

The union, which represents about 16 percent of AT&T’s 256,000 workers, has been organizing rallies and meetings to help push for a deal to address issues ranging from guaranteed weekend days off to healthcare benefits. In 2004, it led a four-day stoppage at SBC Communications Inc, which bought AT&T the following year.

“Unions are trying to maintain many things they’ve gained over the years, and it’s hard,” Ivan Smith, a partner at Lewis Brisbois Bisgaard & Smith LLP, said in an interview.

“In general, the strike is the last thing a union wants. If the employer can withstand a strike, you lose all the leverage you had. You don’t make that move unless there’s no other recourse,” he said.

Last August, CWA called the end of a two-week strike by 35,000 members at Verizon Communications Inc and Verizon Wireless, when the companies agreed to extend the workers’ current contracts and resume bargaining. Verizon and Verizon Wireless, the unit it co-owns with Vodafone Group PLC, and the union are yet to reach a new agreement.

AT&T and rival Verizon regularly negotiate with unions representing larger parts of their workforce. About 55 percent of AT&T’s employees are represented by CWA, the International Brotherhood of Electrical Workers or other unions, according to the company’s annual report.

“We are focused on getting good contracts, and aren’t focused on a strike,” CWA spokeswoman Candice Johnson said in an interview on April 5, regarding its talks with AT&T.

Contracts covering about 120,000 employees will expire this year, according to AT&T.

“As one of the largest employers in America we’re proud of the number of high-paying, middle-class careers we’ve produced,” Marty Richter, a spokesman for AT&T, said in an e-mailed statement on April 3. “Our goal is to do everything in our power to protect those careers.”

AT&T and Verizon are negotiating new union contracts amid declining margins and rising network investment costs. Last year, AT&T’s total operating revenues rose 1.9 percent to US$126.7 billion while capital expenditure rose 3.1 percent to US$20.1 billion.

“By now, it is no longer particularly controversial to argue that returns in the Telecom business are poor,” Craig Moffett, an analyst at Sanford Bernstein & Co, wrote in a report on March 7.

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