Pressure Mounts for an AT&T; Contract : Labor: The company and union are in the third day of talks since a strike deadline passed. Many key issues are unresolved.

American Telephone & Telegraph Co. and unions representing 127,000 workers returned to the bargaining table Tuesday to try to hammer out a contract under a cloud of pessimism about unresolved issues.

Pressure mounted on the negotiators as the talks entered the third day since a strike deadline passed Saturday night.

The unions are seeking improved pay and pensions and better job security. The company wants more flexible work rules to meet non-union competition.

AT&T; and the Communications Workers of America, which represents 100,000 workers, and the International Brotherhood of Electrical Workers, representing 27,000, have been negotiating almost nonstop since Saturday.

CWA President Morton Bahr said when talks adjourned late Monday that 20 issues remained, and “most of these are major issues,” including job security.

He added that he was “more pessimistic” about a new contract in the near term than he was Saturday.

The inability to reach a new contract is seen as reflecting the increasing automation of the telecommunications industry and the new competition AT&T; is facing.

Union members have authorized a strike if necessary.

AT&T; says it has contingency plans to use active and retired managers and hire temporary workers if union members walk out.

CWA spokeswoman Gaye Mack said for progress to be made, the company had to offer some sound proposals.

Herb Linnen, an AT&T; spokesman, said: “What’s been clear from the beginning is that all parties to these negotiations have a lot to do, and they have been working at doing that with vigor and commitment.”

Despite both sides’ determination at the bargaining table, neither AT&T; nor the unions want a strike.

While many AT&T; automated operations could run without staff, installation of equipment would be delayed and competitors could step in to win new business that might have gone to AT&T.;