Recession helps AT&T with labor contracts

NEW YORK (AP) — AT&T Inc., the largest employer of union labor in the country, is renegotiating contracts that cover 112,500 workers and looks set to take advantage of the recession to reduce its health-care costs.

Five regional union contracts expire April 4. A sixth that expires a few months later is being negotiated at the same time.

The last time this batch of contracts was up for negotiation, five years ago, there was a four-day strike that was seen as a minor victory for the Communications Workers of America. But this time, the economic meltdown has shifted the balance of power decidedly toward the employer.

“This is not the time to get involved in a strike. It’s incredibly bad timing,” said Gary Chaison, a professor of industrial relations at Clark University.

Though 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.