The call, sponsored by the Communications Workers of
America (CWA) and an AFL-CIO program, addressed issues such
as creating long-term shareholder value and rejecting the
corporate restructuring plan.
The CWA and AFL-CIO are urging shareholders to reject AT&T’s “ill-conceived” restructuring plan at the May 23 annual meeting and at the special shareholder meeting later this summer. The plan calls for establishing broadband and consumer tracking stocks.
The labor groups also said shareholders should demand that the AT&T board of directors step up involvement in company operations and refocus attention on operations integration and long-term strategy “to create and reinforce shareholder value.” The CWA and AFL-CIO also are seeking support for a shareholder proposal calling for separation of the chairman and chief executive officer position.
Participants on the call, representing banks, public employee retirement funds, asset managers, analysts and joint union-management pension funds, together hold 20% of the outstanding shares of AT&T stock, or 680 million shares.
Michael Garland of the AFL-CIO Office of Investment, outlined labor’s position on the proposed breakup and the implications for long-term shareholder value. Garland called the proposed breakup of AT&T into four separate companies – consumer, business, wireless and broadband – “a costly, two-year diversion from the real problems AT&T confronts, one that will destroy shareholder value.’
“AT&T should be using its competitive advantage and unique strengths to create value,’ Garland said. Those “unique strengths” include a diversified portfolio of telecom services, a huge consumer and business customer base, a leading reputation for quality and reliability, an experienced workforce and a dominant brand name, he said.
AT&T’s initial bundling strategy was designed to capitalize on these advantages. A January 2000 showed that 66% of business customers and 63% of residential customers want bundled services, Garland noted. Further, leading telecom competitors provide such bundled services, but AT&T has been unable to implement bundling, failing to integrate sales and services and other systems, he said.
– Chuck Epstein email@example.com