Telecommunications Merger Activity Benefitting Union Membership

I recently saw a Cingular Wireless ad touting the company as "the only" unionized wireless carrier in the U.S. My first reaction was that this could not possibly be true, since Verizon, T-mobile, and Sprint, all grew out of heavily unionized wireline companies. As it turns out, the assertion is more or less correct, with some qualifications. For those interested in either patronizing or investing in labor friendly companies, pay attention.

Over the last few decades, the telecom industry has gone through several cycles of divorce, spin-offs, remarriages, and consolidation. In the early part of this decade, Sprint, Verizon, and AT&T each spun off their wireless operations into separate tracking stocks. SBC and Bellsouth formed Cingular in a joint venture. A few years ago, Cingular bought AT&T wireless while the AT&T parent company was bought by SBC. Now, with the pending nuptials of Bellsouth and the newly rechristened AT&T (SBC adopted the AT&T brand, despite being the acquirer), 100 percent of Cingular will be under one roof, giving AT&T (actually, the renamed SBC) control of two baby bells, the old AT&T Wireless, and all of Cingular. Ironically, after spending hundreds of millions rebranding AT&T Wireless as Cingular a few years ago, now they are going to spend hundreds of millions more to re-rebrand back to AT&T wireless.

Confused enough? Back to the labor issues. Due to its good relationship with SBC, the Communications Workers of America are now able to organize at Cingular and Bellsouth sites. Of the 40,000 or so wireless workers in the CWA, almost all of them are now Cingular employees. Verizon has adopted a "neutrality" stance, which means that they do not stand in the way of organizing activities, but thus far, the Verizon Wireless offices have not voted to organize.

So far, AT&T (formerly SBC) contends that the unions have not stood in the way of cost-cutting measures, so for now, peace reigns between the union and management. As the "cost efficiencies" (read: layoffs) commence as a fallout of the AT&T/Bellsouth merger, we will see if that continues.