AT&T-Union Alliance Frays

AT&T leaned heavily on union support for its attempted acquisition of T-Mobile USA last year. Now, two months after the $39 billion deal collapsed, some union leaders say the carrier doesn't seem very grateful.

In a face-off with more than 40,000 landline workers whose contracts expire next month, AT&T has called for wide-ranging benefit cuts, including sharp increases in health care premiums and deductibles, elimination of paid sick days, and reduced pensions, union officials say. The move, which follows a similar effort by rival Verizon Communications to cut costs tied to its landline labor force, reflects the sharp change in fortunes in the telecommunications business, which has seen wireless business surge and traditional telephone revenue stall. It's also the latest in a string of attempts by major companies to rein in union workers' benefits, even though telecommunications is still relatively profitable and AT&T has a long history as a big union employer.