We seem to be caught up in a never ending battle with US WEST. For the most part, things seem to be the worst in the Network, or Operations and Technologies side of the business. For example, management has been entrenched on their positions surrounding vacations, priority days, personal days, and general time off requests. To add fuel to the fire, the Vice President for the state has now proclaimed a new performance plan to weed out the work force, for poor performance. This is the “Select 200 plan”, by which management shall remove the worst 200 producers in the states of Washington and Oregon by Labor Day. How can they do this you ask? Believe us, they will try. It is time for every member to realize that this company is not looking out for our welfare, but looking out for managements’ results and the bottom line.
In addition to this, US WEST is now involved in a major realignment of the business by announcing the Global Crossing-US West merger. To date, US WEST is living up to its poor service reputation. Mergers of this size are not simply about scale. They are about market power. When a firm like Global Crossing takes on a firm the size of US WEST, it is hoping to capture the power of the super provider.
It appears that the management teams of these firms have crafted a strategy that breaks them free of the dividend trap that holds back incumbents. In this merger we have two types of firms, the ILEC US WEST with 1998 revenues of $12.4 billion and a market cap of $29 billion.
Global Crossing has a comparable market capitalization of $26 billion. But, its revenues in 1998 were just $424 million. Thus the question, why would Global Crossing dilute itself with US WEST? Now the deal has been announced, we see management’s strategy to create two classes of stock. In essence, this could mean they are spinning off dead weight. The real question investors will face is which class to choose. Not a tough decision.
The first class is G stock. It will pay no dividends but incorporate every asset the companies have that is in the high end of the value curve. Those include Global Crossing’s global fiber network, US WEST’S INTERPRISE data networking business (data and internet), US WEST’S frame relay and asynchronous transfer mode (ATM) network, US WEST’S Wireless PCS business, US WEST’S Internet Yellow Pages directory business, Frontier Corp.s’ long distance business, Frontier’s fiber network, Frontier’s Web hosting and data center business, Frontier’s CLEC business and the companies’ data LEC businesses.
Class L is the Old maid class-the one you don’t want to get stuck with. It contains all of US WESTS’S local lines. Frontier’s ILEC lines and the paper directories of both businesses. On the supposed up side, it will pay dividends - thereby providing investors an alternative investment choice.
In reality, Class L has been stripped of every existing growth asset in the final entity. Its only saving grace is US WEST’S track record of defeating the Telecom Act by keeping competition out of its service territory. This territory will eventually give into competition and the company will be granted long distance once competition is introduced. With all the data networking and internet assets belong to class G there will be little or no opportunity to chase value.
portions reprinted from worldly investor.com by Casey Freymuth
According to FCC reports:
CWA gathered evidence from US WEST employees to discover the story behind these numbers. According to these workers, all of whom are CWA members, the continuing deterioration of service at US WEST is due to these factors:
For over four years, US WEST has been on the wrong path. US WEST is responding to the crisis in service quality with the wrong approach. Management by stress does not produce quality service. Quality service requires motivated, skilled, experienced employees who are give the time, resources, and support they need to do a quality job the first time and who are not required by their employer to sacrifice their personal and family life with excessive mandatory overtime.
US WEST is out of step with the high performance practices in the telecommunications industry.
The Americans with Disabilities act was initiated to help workers who were in need of temporary or permanent restrictions in their jobs. It states there will be no discrimination in job application procedures, hiring, advancement, compensations, training, terms and conditions of employment, or firing.
Most employers can accommodate people in need of being accommodated.
JAN is a toll-free information and referral service on job accommodations for people with disabilities, on the employment provision of the Americans with Disabilities Act, and on resources for technical assistance, funding, education, and services related to the employment of people with disabilities. In addition, JAN analyzes trends and statistical data related to the technical assistance it provides. JAN can be accessed by phone at 1- 800-526-7234 or 1-800-ADA-WORK (1-800-232-9675) or by Internet, at www.pcepd.gov.
(JAN is a result of the President’s Committee on Employment of People With Disabilities)
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