In My Opinion: Guarantee Their Job Security - Now It's Our Turn

You would think that after the Enron debacle, corporate executives would be wary of displaying arrogant disregard for the interests of their investors and employees while feathering their own nests.

But no, the moguls at AT&T and Comcast seem to be tone deaf about public opinion — or else just plain don’t care.

AT&T’s CEO Michael Armstrong is preparing to bargain a new contract with CWA beginning this month at the same time that he is presiding over the corporation’s breakup and making plans to jump ship at year’s end to become chairman of a new cable empire — AT&T Comcast — upon finalization of the merger of AT&T Broadband with Comcast.

The core long distance company that he leaves behind, which employs some 28,000 CWA members, is also likely to be saddled with about $20 billion in debt left over from Armstrong’s purchase of the cable properties that created Broadband.

Quite obviously, the AT&T workers’ number one concern in bargaining this year is job security. Having seen the growth areas of the business — Wireless and now Broadband — spun away from the embattled core company, even as thousands of jobs have been lost to contractors, they are worried about their future.

So what does AT&T management do? They make a highly publicized offer of an early contract extension, but with the provision that they won’t even discuss job issues. On top of that, their extension proposal calls for raiding the workers’ pension plan to pay for our contractual termination benefits. In other words, we pay (rather than AT&T) for eliminating our own jobs.

Needless to say, we rejected that offer and will sit down according to schedule, beginning March 11, and bargain a comprehensive contract that meets our members’ needs.

Meanwhile, here’s what Armstrong has been cooking up with Comcast CEO Brian Roberts.

Buried within the 99 pages of their merger agreement is a section that states that in this year’s bargaining, AT&T will not renew its neutrality and consent election agreement with CWA and IBEW. We had to find that section ourselves — no heads up from Armstrong that an outside entity is dictating the terms of our collective bargaining relationship with AT&T.

This of course just underscores the perception, as we have raised with the Securities and Exchange Commission, of a conflict of interest for Armstrong. Where the interests of the AT&T long distance company and the future AT&T Comcast don’t coincide, whose side will he take? When it comes to our members’ interests, I think we know the answer.

Armstrong, Roberts and company don’t want to talk about workers’ job security or organizing rights, but they sure have taken care of their own job security.

In the preliminary proxy statement just released, shareholder rights activists were shocked to find governance provisions for the new AT&T Comcast that lock Armstrong and Roberts and their board of directors into their jobs until 2005, with shareholders having no power to oust them or even to call for special meetings. Then CEO Roberts, who is expected to also become chairman when Armstrong retires in 2005, could only be removed from office by a vote of nine out of 12 of his handpicked directors — a provision that extends to 2010.

There’s more. By setting up a dual class of stock with “supervoting” rights for the Roberts family, Roberts will have a controlling 33 percent of shareholder votes even though the family has only a 1 percent economic stake in the company. And to guarantee iron-fisted control for Roberts, the deal prohibits any single investor from acquiring more than a 10 percent stake in the company without board approval. (Roberts will chair the committee that selects directors.)

In a truly classic bit of understatement, AT&T and Comcast admit in the merger proxy that this structure makes it “unlikely that C. Michael Armstrong or Brian L. Roberts will be removed from their management positions.” They consider that a good thing, for “corporate stability.”

Others take a different view. “It’s despicable from a shareholder perspective,” according to Ann Yeager, research director for the Council of Institutional Investors, of which CWA is a member. The company is telling investors, “Give me your money and go away for three years,” said Charles Elson, director of the Center for Corporate Governance at the University of Delaware.

Yes, the top execs have certainly taken care of their own future with their job security nailed down in a merger proxy that might as well be an employment contract. Now it’s our turn.

I urge every AT&T member to get actively involved in your local’s mobilization program as negotiations unfold over the next two months. Don’t be a bystander. Our entire union will stand with you. Let AT&T know that we’re united and determined to fight for our future.