AT&T; Holders Take Stand on Abortion Issue : Telecommunications: A proposal, defeated at the firm’s annual meeting, would have denied funds for groups supporting abortion rights.
American Telephone & Telegraph shareholders on Wednesday soundly defeated a proposal that would have denied corporate funds for groups advocating legalized abortions.
But some shareholders on the winning side viewed their victory as hollow because of AT&T;’s recent decision to withdraw a $50,000 annual contribution to Planned Parenthood, which in recent years has become a vocal supporter of abortion rights.
Also at its 105th annual shareholders meeting--the first to be held in Los Angeles--AT&T; reported the first-quarter earnings increased 12.5% to $668 million on a 2.7% increase in revenue, to $8.89 billion. It also said initial customer response to its newly unveiled Universal credit card far exceeded expectations.
Just 5.5% of the 654.8 million shares voted were in support of the abortion resolution, offered by shareholder Shirley Leschin of Iowans for Life, which opposes abortion. The resolution sought to forbid AT&T; to contribute funds to any groups “that endorse, counsel or perform abortions.”
But in presenting her resolution, Leschin also welcomed AT&T;’s break with the Planned Parenthood Federation of America, saying that action had reduced the need for her proposal.
Some major groups of shareholders called for defeat of Leschin’s resolution while also encouraging AT&T; directors to restore the $50,000 contribution, which supports educational programs to reduce teen-age pregnancies. Among these was New York City Comptroller Elizabeth Holtzman, who represented the 4.4 million shares owned by the city’s pension fund.
“Your action has been interpreted as strongly on the side of the anti-choice movement,” Holtzman said, referring to opponents of abortion. “We believe that this hurts your image as a corporate philanthropist.”
But AT&T; Chairman Robert E. Allen insisted that the action was taken to maintain corporate neutrality on an issue that is “a matter of personal conscience.” He said Planned Parenthood’s high visibility in support of abortion rights had “tainted” the company’s reputation “among some of our constituents.”
He also said the company continues to finance educational programs on teen-age pregnancy conducted by other groups in communities--including Los Angeles--where there are large concentrations of AT&T; employees.
Planned Parenthood, in full-page advertisements published by the Los Angeles Times on Wednesday and earlier in the month by the New York Times, accused AT&T; of “corporate cowardice” and charged that it was “caving in to extremists.”
In remarks to reporters before the meeting in the Los Angeles Convention Center, Allen tartly responded to the ad by saying, after 25 years of contributions, “I’d probably have said ‘thank you for your support.’ ”
Shareholders also defeated a resolution to end AT&T;’s affirmative action program. The proposal, advanced by a group called National Alliance on behalf of “white workers and their families,” received 8.8% of the vote.
While the abortion issue dominated discussion before the 1,021 shareholders present at the convention center, others were concerned with the “downsizing” that has eliminated 90,000 AT&T; jobs since 1984, when local phone operations were shifted to seven new regional companies. Yet Allen attributed much of AT&T;’s 12.5% increase in quarterly earnings on a 2.7% increase in revenue to reducing payroll and redeploying remaining workers.
Allen also said that immediate response to the new AT&T; Universal credit card--good for charging long-distance phone calls or gasoline and plane trips--”has exceeded our wildest expectations.” But it remains to be seen, he cautioned, whether consumer interest translates into “a profitable business.”
Overall, Allen called 1989 “a breakthrough year” and the best financially since divestiture. “We have come to the close of the first phase of AT&T;, the 6-year-old AT&T;,” he said, “and we have set the stage” for future growth in global telecommunications and the merging of computer and telecommunications technology.
“We now have a new flexibility as we move into the future,” he said, and reduction of the payroll is dictated by competition. “We live or die by the market place,” Allen said. But he acknowledged that “one can’t simply cut costs forever” and that the real challenge is increasing sales in a sluggish economy.
“There are no ripe melons that are easy picking,” he said.
