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AT&T Institutional Shareholders Discuss Breakup Proposal: Some 150 investors, analysts join AFL-CIO
Washington, D.C.- More than 150 major institutional investors and shareholders of AT&T (NYSE:T) joined a conference call sponsored by the Communications Workers of America and the AFL-CIO's Capital Stewardship Program to hear experts discuss the serious concerns surrounding the proposed breakup of the company.
Participants on the call, representing banks, public employee retirement funds, asset managers, analysts and joint union-management pension funds, together hold 20 percent 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."
CWA and the AFL-CIO have stressed that AT&T is failing to confront key strategic challenges, such as its poor execution of bundling strategy, loss of major customers in business and services and troubled integration of expensive cable acquisition, and high turnover in staff, including both corporate and technical employees.
"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, 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, and a January 2000 survey by the Strategis Group showed that 66 percent of business customers and 63 percent 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.
CWA and the 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 on the establishment of broadband and consumer tracking stocks. Shareholders also should demand that the board of directors step up involvement in company operations and refocus attention on operations integration and longterm strategy that will create and reinforce shareholder value. CWA and the AFL-CIO also are seeking support for a shareholder proposal calling for separation of the chairman and chief executive officer position.
CWA vice president Ralph Maly, who heads the AT&T unit, stressed that union workers very much want the long term viability and competitiveness of AT&T. "We want the company to succeed and be profitable, but the company is not delivering," he said.
Joseph Van Eaton, an attorney who represents cities in cable licensing matters, noted that the road to spinoff for AT&T is not a smooth one, because many local governments require local approval of any spinoff as part of the franchise agreement.
Communities are concerned about customer service and the possible decline of this service as part of the merger process, Van Eaton said, adding that the spinoff may also raise issues in the areas of rights of way, franchise fees and other concerns.
More information is available at www.attinsider.com
Participants on the call, representing banks, public employee retirement funds, asset managers, analysts and joint union-management pension funds, together hold 20 percent 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."
CWA and the AFL-CIO have stressed that AT&T is failing to confront key strategic challenges, such as its poor execution of bundling strategy, loss of major customers in business and services and troubled integration of expensive cable acquisition, and high turnover in staff, including both corporate and technical employees.
"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, 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, and a January 2000 survey by the Strategis Group showed that 66 percent of business customers and 63 percent 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.
CWA and the 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 on the establishment of broadband and consumer tracking stocks. Shareholders also should demand that the board of directors step up involvement in company operations and refocus attention on operations integration and longterm strategy that will create and reinforce shareholder value. CWA and the AFL-CIO also are seeking support for a shareholder proposal calling for separation of the chairman and chief executive officer position.
CWA vice president Ralph Maly, who heads the AT&T unit, stressed that union workers very much want the long term viability and competitiveness of AT&T. "We want the company to succeed and be profitable, but the company is not delivering," he said.
Joseph Van Eaton, an attorney who represents cities in cable licensing matters, noted that the road to spinoff for AT&T is not a smooth one, because many local governments require local approval of any spinoff as part of the franchise agreement.
Communities are concerned about customer service and the possible decline of this service as part of the merger process, Van Eaton said, adding that the spinoff may also raise issues in the areas of rights of way, franchise fees and other concerns.
More information is available at www.attinsider.com
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