AT&T appears to hold upper hand in labor dispute

A dozen strikers circle slowly in front of the C&P Telephone Company, music blaring from a convertible parked nearby. It is the first business day that the 155,000 members of the Communications Workers of America have gone off the job since midnight Saturday, when the CWA and American Telephone & Telegraph failed to reach a contract agreement.

But despite the CWA's size -- it represents more than 75 percent of AT&T's union work force -- the telephone company seems to be holding most of the cards, analysts say.

One plus for the company is that, in the short run at least, few customers will notice the strike. Local phone company employees are still working, because their contracts don't expire until August. Also, 90 percent of long-distance calls are automated. For the 10 percent that are operator-assisted, AT&T has dispatched more than 10,000 managers to replace the 36,000 striking operators.

Time appears to be on management's side. ``Unless the strike goes 30 days or longer, it won't affect AT&T,'' says Charles Schelke, a telecommunications analyst at Smith, Barney, Harris, Upham & Company. He says that the part of AT&T's business most affected by the strike has a long lead time. For example, a business ordering new telecommunications equipment would not get it for another three months. While a strike may delay installation of such equipment, it would not cut into sales much, if at all, Mr. Schelke says.

The union may have less time to play with. CWA spokeswoman Francine Zucker says the 600,000-strong union has ``millions of dollars'' in its strike fund and credit with banks, and will be able to outlast management. But the union may feel under pressure to resolve the strike so it can be organized for the Aug. 9 deadline for regional company contracts.

Moreover, AT&T scored a major coup when it reached a tentative agreement with the leader of the International Brotherhood of Electrical Workers, the second-largest union at AT&T, for a contract similar to the one the CWA rejected. The rank and file has yet to ratify the tentative contract, which calls for an 8 percent wage increase over three years without any cost-of-living adjustment. The ratification process could take a couple of weeks.

The other major sticking points are eliminating the bonuses manufacturing workers got for beating manufacturing targets and reclassifying systems technicians jobs. The latter item, which affects 22,000 people, would allow AT&T to reduce the pay scales of some technicians and, the company says, allow it to be more competitive.

The union is fighting reclassification tooth and nail, and denies that higher wages for technicians make AT&T uncompetitive. But AT&T has played hardball in the past in the name of competitiveness. Last August it announced it was eliminating 24,000 jobs in its information-systems division, which is separate from its communications division.