I have been following companies like AT&T for more than twenty-five years and have seen this same threat happen, time after time.
Much is the same this time as in the past.
However so much is very different this time and that can make a difference.
Companies like AT&T and Verizon wrestle with this strike issue every time a contract comes up for renewal.
They usually take a short term PR hit, but they always recover.
This is not the same AT&T as we have watched in the past.
Remember, around 2004 AT&T was dying. Then the smallest baby bell, SBC from Texas did a series of major acquisitions. They acquired AT&T, Bellsouth and Cingular. During the process Cingular also acquired AT&T Wireless, which was a separate company that just licensed the use of the AT&T brand.
All these companies were now owned by SBC out of San Antonio Texas. The deals were done by CEO Ed Whitacre.
There was so much confusion at that time.
SBC took the AT&T name and spent the next several years trying to stitch together a viable competitor. The smallest baby bell in the industry suddenly became the largest roughly tied with Verizon.
So this may be the first time this new AT&T has to negotiate with workers.
We should expect something similar to what SBC has done in the past, not what AT&T has done, because that AT&T is no longer in existence.
With that said the marketplace is very different.
AT&T runs both a wire line business and a wireless business. Wire line reached it’s peak about a decade ago. It crested and has been falling ever since. Wireless has been growing since that time.
This is the “wave theory” I regularly talk about. Every company rides a wave up then down again.
The part of AT&T that will go on strike is the wire line side which is currently on the way down.
The company competes with many new competitors in the wireless, cable television, VoIP and other industry segments. These competitors are not unionized.
So in order for AT&T to remain competitive they must reduce costs.
That is the hard part for the workers in this segment. The needs and interests of AT&T and their workers are competing with each other.
So while this will be hard for the workers, I don’t see a choice.
What will likely happen is AT&T and the workers will both give some and meet in the middle. Workers and AT&T will both give in a little.
That’s the way it usually works. Will it work this way with this new AT&T?
Who knows. We’ll just have to wait and see.
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Please attribute to Jeff Kagan, Tech Analyst with www.jeffKAGAN.com
If you would like to discuss, call me at 770-579-5810 or send an email to jeff@JeffKAGAN.com
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Jeff KAGAN| Tech Analyst www.jeffKAGAN.com
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