September 2, 2011 10:15 AM EDT
The abysmal August jobs report released on Friday -- zero-job growth and unemployment rate frozen at 9.1 percent -- provides a gloomy backdrop to the battle being waged between the Justice Department (DoJ) and AT &T (NYSE: T) with respect to the telecom giant’s proposed merger with T-Mobile.
The DoJ opposes the $39-billion deal, largely on anti-trust grounds, but also cited that such a transaction would cost thousands of jobs -- in an economy that simply cannot withstand anymore job losses.
James M. Cole, the deputy attorney general, said at a news conference that mergers usually lead to job cuts and “so we see this [lawsuit] as a move that will help protect jobs in the economy, not a move that is going in any way to reduce them.”
However, other parties claim that the government is mistaken and that this merger will create jobs, not eliminate them.
The union representing AT&T’s wireless workers, the Communications Workers of America (CWA), not only endorsed the merger, but has also criticized the DoJ for blocking it.
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On her blog, Debbie Goldman, CWA’s Telecommunications Policy Director, wrote: “[Critics have] manufactured a fact, claiming that the AT&T/T-Mobile merger will lead to 20,000 lay-offs of T-Mobile workers. And they are repeating it again and again. Certainly, with unemployment hovering at a stubborn nine percent, the impact of the proposed merger on jobs today and in the future should be a top concern of policymakers.”
Goldman added: “The critics are just [plain] wrong. The proposed AT&T/T-Mobile merger is good for workers and good for job creation.”
She sought to refute some of the assertions made by critics of the proposed merger.
One contention is that AT&T has eliminated 100,000 jobs over the past ten years. Goldman counters that those job cuts came from the company’s wireline business that has suffered deep declines in its customer base as more people switched to mobile phones.
“CWA is not defending job cuts at AT&T, but at least get your facts straight,” Goldman wrote. “On the wireless side of AT&T, there has been very little drop in employment, despite multiple mergers. In 2002, there were 67,000 employees at AT&T Mobility and its predecessor companies. Today, there are 70,000 employees at AT&T Mobility. Certainly not evidence to point to massive wireless job cuts at AT&T.”
She also rejects the notion that mergers always pave the way toward job losses.
“CWA will both negotiate and enforce agreements with AT&T to ensure that no AT&T Mobility or T-Mobile occupational workers will lose their jobs,” she wrote.
“The simple fact is that in CWA’s long experience in working with AT&T on mergers and acquisitions, not one CWA-represented employee has ever lost their job due to that fact.”
Goldman also said that T-Mobile needs to merge with AT&T for its own survival -- and that Sprint Nextel (NYSE: S) would have been a bad partner.
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