AT&T hopes to gain concessions from unions
NEW YORK — AT&T Inc. is negotiating new contracts that cover 112,500 union workers, including more than 3,000 in the St. Louis area, and looks set to take advantage of the recession to reduce its health care costs.
The last time this batch of regional contracts with the Communications Workers of America was up for negotiation, five years ago, there was a four-day strike that was seen as a minor victory for the union. But this time, the economic meltdown may have shifted the balance of power decidedly toward the employer.
While the phone company’s overall results are holding up well in the recession, the contracts cover AT&T’s shrinking wired phone business, rather than the growing cell phone division.
Dallas-based AT&T wants concessions on health benefits, saying the wireline workers pay far fewer of their health care costs than employees on the mobile phone side. Retirees’ health benefits are also likely to be affected.
After talking to management, UBS analyst John Hodulik wrote last week that a strike is likely but that the company would come out on top.
Management employees have received extensive training to keep the company running if there is a strike, Hodulik said.
And Sanford Bernstein analyst Craig Moffett said the union’s war chest is likely badly depleted by the weak stock market.
AT&T could reap large savings on its health care costs. AT&T spends $5.5 billion a year on health care; its 2008 revenue was $124 billion.
Communications Workers of America spokeswoman Candice Johnson said Hodulik’s report was "way premature" because talks have just started.
"We are focused on productive talks," she said payday loans for bad credit. "We’re not talking publicly about issues at this time, but AT&T is doing well financially, even in these economic times. AT&T should be a leader in maintaining quality jobs and quality benefits."
About 3,200 AT&T employees in the St. Louis area are covered by the core contract that’s being renegotiated, a spokeswoman from CWA Local 6300 said.
AT&T’s health care proposals have clearly touched a nerve among the union’s members. The website of the Communications Workers’ District 4, which covers the Midwest, said members showed up at work in scrubs, wearing Band-Aids, in wheelchairs and on crutches last week to show their displeasure.
"It’s clear from their proposal, the company isn’t really interested in fixing the health care problem. Their solution is massive cost-shifting to us," a bargaining update said.
AT&T spokesman Walt Sharp said the workers covered by the expiring contracts pay 8 percent of their yearly health care costs, compared with the national average of 34 percent. Their total health care costs are also higher because the benefits structure doesn’t promote responsibility, he said. The company wants to phase in a deductible at a level determined by an employee’s wages.
Meanwhile, AT&T employees are well-paid, compared with the competition, Sharp said.
A 2007 survey by the Bureau of Labor Statistics puts the hourly wages of phone company line installers and repairers at $26.80 per hour, compared with $19.50 per hour at cable TV service providers.