Few statements could have been met with as much incredulity as when AT&T
The CWA said last summer that the merger would create 100,000 new jobs. The CWA president even testified on the benefits of the deal before Congress.
But that increased employment claim raised the eyebrows of Albert Foer, president of the American Antitrust Institute. "I've never seen a merger that has produced new jobs," he said.
Common sense alone would indicate that redundant positions in sales, engineering, and customer relations would certainly be ripe for elimination.
No good deed shall go unpunished
So how does AT&T reward its union employees for working with the company in its attempt to suspend the disbelief of regulators, Congress, and the public over the benefits of the merger?
By letting them hang out to dry over current contract negotiations.
Half of the 80,000 AT&T employees represented by the CWA work in the telecom's wireline business, and they are still waiting, according to the union, for AT&T to begin holding "serious" talks. Through a CWA website, the union told its rank-and-file membership: "Both sides are still far apart. The pace of progress is slow and frustrating."
So far the sides have managed to avoid a walkout, even though 93% of the union members who voted authorized the CWA leadership to call a strike. The last contract expired just after midnight last Saturday.
The snag in negotiations appears to hang on a proposed increase in union employees' health-care contributions and cuts to the workers' pensions. AT&T said on its website that it wants a contract which would "enable a competitive cost structure reflecting current market realities."
Those market realities must refer to the trend of customers moving away from fixed-line phone service to that of wireless-only communications.
The changing landscape
But, as noted in Verizon's fourth-quarter 2011 earnings report, its wireless business is made up almost entirely of non-union employees. Couple this with the aforementioned trend of customers choosing wireless over wireline, and you may have a clue as to how hard a line carriers are willing to take in contract negotiations with their union-represented wireline employees.
A stormy union year
More than half of AT&T's employees are covered by union contracts. According to the company's 2012 annual report, contracts covering 120,000 workers will expire in 2012. Given that, the CWA -- no matter how far it bent over backwards last summer to lobby for the AT&T/T-Mobile merger -- should expect no quarter from management in current and future negotiations. And investors should expect more telecom strike threats in the headlines this year.
Both AT&T and Verizon have been consistently paying dividends for years, but the Fool has identified several other outstanding dividend payers. For a free guide to more strong income-producing stocks, get this Motley Fool report: "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can't own shares in too many solid dividend-producing companies!
Fool contributor Dan Radovsky owns shares in AT&T. The Motley Fool has a disclosure policy.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.