Wednesday, May 26, 2004

SBC ends strike with deal guaranteeing union jobs

Company agrees to reduce outsourcing in new sectors

By T.A. Badger
The Associated Press

SAN ANTONIO - SBC Communications Inc. had insisted its unionized employees were seeking too much - asking the company to improve job security amid cost-cutting efforts to stay competitive.

But after a four-day, 13-state strike, SBC and the Communications Workers of America settled Tuesday on a tentative contract far more generous than the company previously said it could afford.

The five-year agreement increases wages and pensions, guarantees work for more than 100,000 union employees and could reduce the outsourcing of jobs. A ratification vote by CWA members is expected in June.

The settlement came hours after the telephone operators, linemen, service technicians and others returned to their jobs.

In Ohio, SBC provides service in Middletown, Dayton, Columbus, Cleveland and other areas - but not Cincinnati.

The union wanted access to positions in SBC's emerging sectors, including Internet support and wireless data service. That work is now handled largely by lesser-paid contract workers, many of them in India and the Philippines.

Both sides touted the deal's benefits.

"SBC now has a labor agreement that provides us greater control over our cost structure and flexibility to meet our competitive challenges, while continuing to provide the outstanding wages and benefits that are hallmarks of this company," SBC chairman and chief executive Edward Whitacre Jr. said in a statement.

Ralph Cortez, president of CWA Local 6143 in San Antonio, said the agreement gives workers access to jobs running fiber-optic cable to households, work that is often outsourced.

"You're talking about millions of homes across America," Cortez said. "To cut us out of that loop, you're talking many, many jobs."

But on Wall Street, investors sent SBC shares down 14 cents, or 0.6 percent, to close at $24.05 on the New York Stock Exchange.

"SBC blinked. This is not a good deal," said Peter Morici, a business professor at the University of Maryland. "Generally speaking, when both sides declare victory, somebody won and the other is putting a good face on losing."

But Lance Compa, who teaches labor law at Cornell University, was more encouraged.

"It's a classic collective bargaining outcome in the best sense," said Compa. "This settlement shows that unions are still here, that they still have a voice and still have a future in certain industrial sectors."

With 2003 sales of $41 billion, SBC is the nation's second-largest provider of local-phone service. It is also a major player in other telecom sectors, including long-distance phone, data and Internet services.

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