AT&T up against possible wireline union strike
AT&T (NYSE: T) may be facing one of its largest strikes in recent history if it can't reach an agreement for a new contract with the Communications Workers of America (CWA) by this weekend.
CWA members at Verizon on strike last August.
Although negotiations with almost 40,000 CWA-represented union workers at AT&T East, Midwest, West and Legacy continue, the existing contracts expire at 12:01 a.m. on Sunday, April 8.
With 93 percent of voting union members approving the strike authorization if no agreement is met by the deadline on Sunday, the telco could find itself in a similar situation to what Verizon (NYSE: VZ) found itself in last August when 45,000 union workers went on strike over various concessions proposed by Lowell McAdam, Verizon's CEO and Chairman.
Verizon and its unions have yet to agree on a new contract. The same goes for Hawaiian Telcom (Nasdaq: HCOM), which told the IBEW Local Union 1357 leaders that it would implement a modified employment agreement that reflected previously proposed offers in January.
Similar to Verizon, AT&T is trying to reduce healthcare costs, pension reductions and other benefit expenses like sick time. AT&T said that medical costs for non-union employees have shot up 8 percent in 2010 and 54 percent since 2004.
"Core wireline CWA employees currently pay about 60 percent less for health care than union employees in other areas of our business, AT&T managers, and the national average," AT&T said on a website focused on the negotiations.
However, CWA representatives believe they service provider just want to put more of its cost burden on its workers.
"Everything leads me to believe that we're in the same position today with AT&T that we were with Verizon last year," said Chuck Simpson, president of CWA Local 2204 in Salem, Va. "Like so many companies, they want to shift more costs to the employees."
If a strike does occur, AT&T management said it has a contingency plan in place where it will use managers and vendors to conduct daily routine work on its networks.
Separately, AT&T is in the process of negotiating a contract with its CWA-represented workers.
Debates between labor unions and telcos have become an ongoing trend in recent years as telcos have looked for ways to reduce costs in their respective wireline divisions where traditional voice service revenues have continued to decline.
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