Union files suit to halt AT&T layoffs

Here’s a link to a podcast about this article on Union Edge radio: https://goo.gl/VZRuZQ

The Communication Workers of America (CWA) called a pre-Christmas announcement by AT&T that it will be laying off more than 700 workers in its Southwest region “an extraordinary act of corporate cruelty.”

The union on January 3 filed a lawsuit in a federal court in Austin seeking to stop the layoffs and to reinstate those who subsequently lose their jobs. The lawsuit also seeks compensation for workers harmed by the layoffs.

AT&T, which announced the layoffs on December 14, said that the layoffs would begin on January 4 when 152 premises technicians in Arkansas, Missouri, Oklahoma, and Texas will lose their jobs.

Premises technicians install AT&T’s internet and internet-based television services.

The company also said that in February, 561 more workers in various job titles will lose their jobs.

Claude Cummings, CWA District 6 vice president, described the layoffs as unprecedented because they come at a time when the company is highly profitable and expanding.

Cummings also noted that AT&T is relying heavily on subcontractors to perform work that union workers could be doing.

“We know that AT&T is using contract employees to do installation work while AT&T premises technicians, who are qualified and do the same work, will be jobless in just a few days,” said Cummings when the union filed suit.

The company justified its mass firings as a business decision based on “changing market dynamics.”

But the union isn’t convinced that “changing market dynamics” is the real reason for the layoffs.

The internet and internet-based television services that premises technicians install are highly profitable and are growing components of AT&T’s business.

In a recent media release aimed at investors, AT&T CEO Randall Stephenson said that the company’s internet and television business is expanding rapidly.

“We’re . . . on track to have one of the largest high-speed internet networks in the US, reaching more than 50 million customer locations with competitive high speeds,” said Stephenson in a release announcing AT&T’s third quarter results. “This expansion will make our bundled video, mobile, and broadband services even more compelling.”

In the same message to investors, Stephenson said that the company’s third quarter revenue was $39.7 billion and its quarterly profit was $3 billion.

In its lawsuit, the union called the company’s publicly stated reason for the layoffs “a self-serving fabricated fiction” and “palpably false.”

According to the union’s complaint, there is no shortage of work at AT&T.

“In the Austin, Texas area, the Company is subcontracting approximately 80 percent or more of the kinds of work that Premises Technicians are trained and qualified to perform,” states the lawsuit.

The lawsuit also points out that in Dallas, 1000 subcontractors are performing the work of premises technicians.

After being notified on December 12, that the company would be laying off union members, Cummings contacted AT&T and proposed alternatives to the layoffs.

Cummings told the company that it should use union workers to perform the work being done by subcontractors.

He also said that the layoffs should be postponed until the company and union could meet to discuss his proposal and other alternatives to layoffs.

But the company refused to discuss the matter, which the union argues is a violation of Article VIII of its collective bargaining agreement with AT&T.

In addition to layoffs in its Southwest region, AT&T has announced layoffs in other areas of the country as well.

Newsweek on Christmas Eve reported that “AT&T plans to layoff and fire more than 1000 workers” in 2018.

The Chicago Tribune reported that AT&T will be laying off 600 workers in its Midwest region.

In New York, 700 DirecTV installers received pre-Christmas pink slips. DirecTV is owned by AT&T.

These firings come just weeks after Stephenson promised Congress that if it passed the massive corporate tax cut proposed by Republicans, the company would add thousands of new jobs.

In its lawsuit, the union blames the layoffs on the company’s attempt to “diminish the union’s bargaining strength” by reducing the number of employees in the bargaining unit represented by the union.

In a parallel legal action, the union also filed  unfair labor practices charges against AT&T with the National Labor Relations Board.

The union’s charge states that AT&T’s layoffs are being implemented in bad faith because the company is violating its collective bargaining agreement with the union by contracting out work that should be done by union members.

“We expected AT&T to invest in our communities and customers, and to create more jobs, as the Republican tax plan promised,” said Cummings. “Instead, AT&T is cutting jobs and working people face layoffs and an uncertain future.”

More bad news for Carrier workers

Carrier workers in Indianapolis, Indiana received some more bad news.

Think Progress reports that Greg Hayes, CEO of United Technologies, the corporation that owns Carrier, said that his company will invest millions of dollars in state money to automate work at the plant and that the automation will lead to more job losses.

The money from the state of Indiana was part of deal negotiated to keep Carrier from moving jobs in Indiana to Mexico.

That news came a week after Carrier workers learned that 550 jobs at the plant would be eliminated.

The workers had previously thought that their jobs had been saved after President-elect Donald Trump announced that he had convinced United Technologies to keep its Indianapolis Carrier plant open.

The last year has been a roller coaster ride for Carrier workers.

In February, Carrier, which makes gas furnaces at its Indianapolis plant, announced that it in order to save money it would close its factories in Indianapolis and Huntington, Indiana and move the work to Mexico.

At the time, President-elect Donald Trump expressed outrage at the proposed closures and the company’s plan to move the work to Mexico and promised that if elected he would fight to save those jobs.

One of the first things he did after winning the election was to strike a deal with Carrier to keep the Indianapolis factory open.

Indiana Gov. and Vice President-elect Mike Pence, serving as Trump’s representative, agreed to give Carrier $7 million in state incentives to keep the Indianapolis plant open. Pence also agreed to give the company $16 million in state money that would be used to make capital investments at the plant.

Trump made a trip to the Carrier factory in Indianapolis to announce that he had saved 1100 jobs.

According to Chuck Jones, president of United Steelworkers Local 1999 whose members work at the Indianapolis Carrier plant, workers were elated to hear the news.

They assumed that the 1100 jobs that would be saved were the manufacturing jobs at the plant, which would mean that almost all of production jobs at the plant would be saved.

But the workers mood became more somber when they learned the details of the deal.

After Jones met with the company, he learned that 350 of the 1100 jobs that were supposed to be saved were engineering jobs that company had planned to keep in Indiana all along and that 550 workers at the Indianapolis plant would still lose their jobs.

Carrier also planned to carry through with its plan to eliminate 700 jobs at its Huntington plant.

Jones reported that workers at the Indianapolis plant were devastated when they learned that 550 workers would be laid off.

A week later, Hayes told CNBC that the state’s $16 million investment in capital improvements would be used to automate work at the Indianapolis plant.

“We’re going to… automate to drive the cost down so that we can continue to be competitive,” said Hayes to CNBC during an interview. “Is it as cheap as moving to Mexico with lower cost labor? No. But we will make that plant competitive just because we’ll make the capital investments there. But what that ultimately means is there will be fewer jobs.”

In an Op-Ed piece that appeared in the Washington Post, Jones expressed his anger at the false hopes raised by the deal and race-to-the-bottom mentality of corporations like United Technologies.

“These plants are profitable, and the workers produced a good-quality product,” writes Jones. “Because of corporate greed, though, company leaders are racing to the bottom, to find places where they can pay the least. It’s a system that exploits everyone.”

Union launches boycott to save jobs

The union representing laid off workers at the Nabisco bakery in Chicago has launched a boycott campaign to protest the layoffs.

The Bakery, Confectionary, Tobacco, and Grain Millers Union (BCTGM) is urging consumers not to buy Oreos, Chips Ahoy, and Ritz Crackers made in Mexico.

The union on March 23 also announced that it would be sending teams of workers laid off at the Chicago bakery to communities all over the US to publicize the boycott.

Two days before the union made its announcement, Mondelez International, the owner of the Chicago bakery, laid off 277 workers at the bakery.

Mondelez, the world’s largest maker of snack foods, is in the process of moving much of the work done at the Chicago bakery to Mexico. When the process is complete, 600 of the 1200 jobs at the bakery will be eliminated.

In July 2015, Mondelez told its Chicago workers that instead of investing to upgrade the Chicago bakery, it would be shutting down some of its production and moving the work to Mexico.

Prior to the announcement, Mondelez had made the workers an offer that the company knew the workers couldn’t accept–agree to $46 million a year in concessions in perpetuity, and the company would invest in upgrading the plant.

David Durkee, international president of BCTGM called Mondelez’s offer a sham.

“They made an offer that was so ridiculous they knew it could never be accepted,” said Durkee.

Had workers accepted the proposed concessions, their pay and benefits would have been cut by 60 percent.

“I don’t know of anybody who could support a family if 60 percent of their pay is cut today,” said Jethro Head, vice president Midwest Region BCTGM.

According to Durkee, Mondelez’s offer was made to justify a decision that had already been made.

Mondelez was ranked 91 on the 2015 Fortune 500 list of the world’s largest corporations.

It is the product of a Byzantine restructuring of the commercial food business that involved Kraft, General Mills, Nabisco, and the RJ Reynolds Tobacco Company.

After a series of mergers, restructuring, and spinoffs, Kraft in 2010 split itself in two. One company continued to make and sell food products under the Kraft and other brands.

The other became Mondelez, a global snack food corporation, that makes Oreos, Cadbury candy, and a host of other popular snack foods.

The Wall Street Journal reports that the split was forced by Trian Fund Management, a hedge fund and activist investor with major holdings in Kraft.

Five years later, according to the Journal, William Ackman another hedge fund manager and activist investor acquired a $5.5 billion stake in Mondelez. The Journal reports at the time of the acquisition that Ackman “believes that Mondelez has to grow revenue faster and cut costs significantly or sell itself to a rival.”

At about the same time that Ackman was calling for cost cuts, Mondelez announced that it would be moving much of the work done at its Chicago bakery to Mexico.

Mondelez’s Chicago Nabisco bakery has been a fixture on Chicago’s Southwest Side since the 1950s.

Most of its workers are African American or Latino, many live in neighborhoods near the bakery, and quite a few have worked at the bakery for decades.

The Chicago Tribune reports that the Chicago bakery has been “crucial to Mondelez’s North American bakery business in part due to its location and because its skilled workers know how to make a variety of cookies and crackers.”

BCTGM says that the timing of the Chicago layoffs suggests that the company is trying to gain leverage just as Mondelez and BCTGM begin a round of negotiations on a new collective bargaining agreement that covers 2,200 BCTGM members who work for Mondelez  at six locations across the US.

The union’s boycott campaign will give workers and consumers across the country an opportunity to stand in solidarity with laid off Mondelez workers and those who remain on the job but are facing the possibility of more cuts to their wages and benefits.

“(Mondelez) wants Americans to buy Oreo, Ritz Crackers, and Chips Ahoy, but (the company) isn’t interested in investing in Americans to make them,” said Head. “(Mondelez) wants to box up our decades of experience and use it to exploit the good people of Mexico.”

Hunger strike at Tufts to save janitors jobs

Five students at Tufts University in Massachusetts have been on a hunger strike since May 3.

The students are supporting 35 school janitors who are being laid off.

The hungers strikers, who belong to the Tufts Labor Coalition (TLC), are demanding that Tufts stop the proposed layoffs.

“Our decision to hunger strike and occupy space on campus is in solidarity with the janitors’ calls for no cuts,” said Nicole Joseph an organizer with the TLC.”This culmination comes from a long history of Tufts treating workers poorly. We have decided to pursue this drastic action to make Tufts administrators’ priorities align with the rest of the Tufts community, given that all previous efforts from workers and students have been silenced and ignored.”

The Tufts administration recently announced that 35 part-time janitorial positions will be cut for budgetary reasons.

The janitors work for DTZ, a private company that provides janitorial services for Tufts.

The Tufts administration said that the layoffs at the school, which has an endowment worth $1.6 billion, are the result of budget constraints and the school’s desire to keep education affordable.

“We take seriously our responsibility to control tuition costs and offer financial aid that allows us to admit outstanding students from all socioeconomic backgrounds,” said Kim Thuler, Tuft’s director of public relations.

Thuler went on to say that the administration is looking for other ways to lower administrative expenses.

Lorena Arita, one of the janitors whose job is being eliminated, had a different take on the impact that the layoffs will have on making higher education affordable.

“To be cut, to be fired, will create big problems economically,” said Arita, whose son is attending college elsewhere, to the Somerville Journal. “I have payments of my son’s university that I couldn’t continue making.”

Tufts is located in Medford and Somerville, Massachusets.

The Somerville City Council, which passed a resolution supporting the janitors, suggested another way of keeping higher education affordable.

According to the City Council’s resolution, instead of making low-wage workers bear the cost, Tuft’s administration should rein in the over sized salaries of some of its top executives.

The resolution noted that Tuft’s president Anthony Monaco in 2012, the latest year for which salary information is available, was paid $705,728 for the year.

Other top administrators had salaries of at least $500,000 and ten had salaries of at least $300,000.

The most recent post on the Tufts Labor Coalition’s Facebook page said that the hunger strikers are beginning to feel the effects of not eating for two days but their resolve is still strong.

Supporters of the hunger strike have pitched tents around the five and are occupying space near the administration building.

“Our hunger strike is basically our last resort,” said Arismer Angeles, one of the students on strike. “Other actions that we’ve tried to perform on campus have yielded little to no results and this is our last chance we think before the semester ends and these cuts happened.

“The students at Tufts University who are calling for the preservation of essential jobs on their campus deserve enormous credit taking initiative on this critical economic justice issue,” said Roxanna Rivera, vice-president of the janitors’ union, SEIU 32BJ. “The Tufts Labor Coalition is an inspiring, student-led effort that for years has been working to defend workers’ rights in campus. They recognize how much the workers at Tufts contribute to the campus community and the world beyond its gates. The students who chose bold action and engaged in a hunger strike deserve our unconditional support and respect.

“The hunger strikers should know that 32BJ SEIU janitors appreciate the students’ courage.  SEIU 32Bj hopes for quick end to the hunger strike and a just outcome for the whole Tufts community.”

Accenture helps private sector eliminate jobs too

Some public universities like the University of Texas at Austin have contracted with Accenture, a global consulting firm based in Ireland, to find ways to make  universities operate more efficiently.

Last year, Accenture produced the first part of its plan to make UT more efficient. The plan, called Shared Services, would eliminate 500 jobs.

Accenture also contracts with private corporations for the same purpose. The company’s recent partnership with private equity firms that bought H.J. Heinz Co., the ketchup and other food products manufacturer, demonstrates that Accenture has a one-size-fits-all formula for creating efficiencies–eliminate jobs.

The Brazilian private equity firm 3G Capital and Warren Buffett’s Berkshire Hathaway in 2013 paid $23.3 billion to buy Heinz. The deal paid shareholders $72.50 per share, so that the new owners could take the company private.

After the two private equity companies bought Heinz, Accenture was called in to study the company’s cost structure.

In August, Heinz announced that it was eliminating 600 office jobs, including 350 in Pittsburg, the company’s headquarters, and in November, the company announced that over the next six to eight months, it would be closing three plants in North America, eliminating nearly 900 jobs.

The lost jobs are about 10 percent of the company’s workforce.

According to Heinz the job cuts and plant closures were regrettable but necessary because they would “enable faster decision-making, increase accountability, and accelerate growth.”

The company’s statement makes it sound like Heinz was bloated with job redundancies.

But Fortune reports that before the 3G-Berkshire takeover, “Heinz was already viewed by analysts and competitors as a relatively lean, hard-working enterprise.”

The company’s assertion that the plant closures and job cuts would lead to greater efficiency puzzled the leader of the economic development corporation in one town where Heinz closed a plant.

John Regetz, executive director of the Bannock Development Corporation in Pocatello, Idaho, where the Heinz is closing its plant, told the Idaho State Journal that in 2011, the Pocatello plant was recognized as being the most productive facility in the entire Heinz operation.

IUF’s Private Equity Buyout Watch argues that the Heinz job cuts are less about creating efficiencies and more about shedding labor costs, so that when the new owners decide to sell Heinz, as they will surely do, the company will fetch substantially more than the investors paid.

Shedding labor costs also helps 3G and Berkshire enhance their short-term rate of return.

The Heinz acquisition isn’t the first time that 3G and Accenture have worked together.

According to the Financial Times, 3G hired Accenture to help it trim costs after 3G bought AB InBev, an international brewing company that owns more than 200 brands including Budweiser and Stella Artois, and Burger King.

In both instances, 3G implemented aggressive cost cutting measures that included significant job cuts.

The Wall Street Journal reports that shortly after 3G acquired Burger King in 2010, 300 employees at the company’s headquarters were let go and layoffs continued for months after that.

According to the South Florida Business Journal, by 2011 40 percent of the employees at Burger King corporate headquarters had been laid off. Some were top executives, but plenty of middle-class people working as administrative assistants, analysts, quality control supervisors, and others lost their jobs.

Low-wage workers at Burger King restaurants weren’t affected because most of them work for franchise owners.

Private Equity Watch reports that by shedding labor costs, 3G “achieved the seemingly impossible by squeezing even more cash out of Burger King when they took over from earlier rounds of private equity investors who effectively vacuumed out large quantities of cash.”

After the mass sackings at Burger King, 3G cashed out. In 2012, it took Burger King public again in a $1.4 billion deal with Justice Holdings Limited, a UK investment firm.

Accenture’s work has caught the eye of other private equity investors in the food production industry.

Mondelez, the maker of such snack foods as Oreos and Cadbury chocolates, recently announced that it had hired Accenture to help it slash costs.

“We’ve watched the work that 3G has done with AB InBev and Heinz – Accenture was the partner with them, and we believe they can be of great help to us,” said Irene Rosenfeld, chief executive of Mondelez to the Financial Times.

“(Accenture) has managed more synergy than anticipated in the merger between AB Inbev and Interbrew, while it also shut down 3 Heinz factories with 2,000 jobs lost,” added Johan Van Geyte writing for retaildetail.