WORKERS, SBC REACH AGREEMENT UNION TO VOTE ON CONTRACT.

Byline: Evan Pondel Staff Writer

SBC Communications Inc. and the union representing 100,000 telephone workers reached a tentative contract agreement Tuesday, ensuring stronger health benefits and more job security after three months of failed negotiations.

A four-day strike over the weekend culminated with the Communications Workers of America and SBC agreeing to a new five-year contract. Concessions were made on both sides of the bargaining table, and now union workers in 13 states will have to decide whether the contract is favorable. CWA plans to conduct a vote in the next several weeks, with results likely due back by late June. Union leaders and SBC executives expect the new contract to pass without any friction.

``The contract is good, but it's not great. I suppose there is always a give and take at the bargaining table,'' said Dan McCrory, an SBC power technician and president of a CWA local in North Hollywood. ``At first glance, the contract seems positive, although I know we'll have to take a fine-tooth comb to it.''

The tentative terms call for average base wage increases of 2.3 percent a year and lump sums averaging $300 a year. San Antonio-based SBC also agreed to provide current employees with a guaranteed job offer, meaning their position would not be cut even if there is a surplus in a particular department. The company is not extending the offer to new employees.

``We are pleased with the agreement because it helps us address the economic pressures that face our industry,'' said John Britton, an SBC spokesman in San Francisco. ``We feel the agreement gives us better control over costs.''

That control translates to SBC's cost savings approaching $2 billion under the new five-year contract. The savings are a result of SBC executives' enhanced ability to reduce the company's exposure by raising co-payments for health benefits.

The new contract will raise co-payments in 2007 to $20, up from the current $10-to-$20 range. Meanwhile, emergency room co-payments will increase to $50 in 2005, from the current $25-to-$50 range. SBC employees will still not be required to pay a monthly premium.

``I think it's a well-balanced agreement and underneath it all the CWA recognizes the operating conditions of SBC and the overall industry,'' said Qaisar Hasan, analyst with Utendahl Capital Partners in New York. ``Both sides had to compromise, but it's probably more of a mild positive for the union.''

As SBC continues to morph into more of a wireless company, employees have become concerned about the longevity of their jobs. In many cases, companies are hiring workers abroad to better distribute the cost of adapting new technologies. Hasan said SBC can't necessarily afford to lose workers that understand the telecommunications business. But at the same time, it is not cost-effective to keep those employees who have expertise in a trade that may soon be obsolete.

To protect workers, the union is demanding more training in new technologies. McCrory said the company plans to provide additional training for interested employees. ``The company realizes we had them over the barrel and now only time will tell if the new contract will be in our best interest,'' he said.

SBC is the second-largest of four Baby Bell local phone operators, with pressure mounting to capture an even greater market share. Employees are feeling that pressure as well, with union participation among the only outlets to control their destiny.

The recently concluded grocery workers' strike differed from the SBC walkout in that the telecommunications industry still has relatively strong union density, said Kent Wong, director of the Center for Labor Research and Education at the University of California, Los Angeles.

``The retail industry has seen a strong erosion of wages and working conditions,'' Wong said. ``Meanwhile, telecommunications companies are more profitable and you have a huge work force that is not easily replaceable.''

To meet demand during the four-day strike, SBC was forced to fill positions with about 40,000 managers, contract workers and retirees. At least 30,000 California employees and thousands more across 12 other states were expected to join picket lines over the weekend.

The company expects lump-sum payments from the new contract and strike-related costs to increase second-quarter operating expenses in 2004 between $250 million and $300 million.

In 2003, the company posted sales of $41 billion, gaining more traction in telecom sectors including long distance, data processing and the Internet.

Evan Pondel, [phone]

evan.pondel(at)dailynews.com