Merger is 'natural,' says chief of Bell 10-12% earnings rise seen over next 5 years

April 27, 1996|By Michael Dresser | Michael Dresser,SUN STAFF

WILMINGTON, Del. -- Declaring that "this is no ordinary annual meeting," Bell Atlantic Chairman Raymond W. Smith told shareholders yesterday that the company's planned merger with Nynex Corp. will lay the groundwork for 10 percent to 12 percent earnings increases over the next five years.

"This is a natural partnership between the two of us," the Philadelphia-based regional phone company's chief executive exulted at a sometimes raucous, sometimes comic gathering.

Mr. Smith predicted the merger announced Monday would make the combined company a more effective competitor in the areas of video, wireless communications, Internet services, global ventures and what he called "the ultimate potential opportunity" -- long distance.

"We will be able to deliver more services faster than any of our competitors," he predicted during a meeting where he repeatedly tweaked rival AT&T Corp. over its layoff record and opposition to the merger.

Coming four days after the announcement of the largest merger in the history of American telecommunications, the annual meeting became a magnet for union protesters. Members of the Communications Workers of America, including a sizable contingent from Baltimore, vented concerns that the company's promises of no merger-related layoffs of union workers would prove hollow.

"We just don't believe that promise and we take that from actual experience," CWA International Vice President Jan Pierce told Mr. Smith.

But the Bell Atlantic executive repeated his assertion that the merger would actually increase employment, including jobs in union ranks. He added that the merger was necessary to give the company the scale to compete in world markets against the likes of British Telecom and France Telecom.

At one point, he contrasted Bell Atlantic's downsizing with AT&T's widely reported plan to eliminate 40,000 jobs, contending that almost all of the employees who have left Bell Atlantic have done so under voluntary separation plans.

"No fair observer would say Bell Atlantic's record on layoffs over the past four years has been anything but exemplary," he said.

When challenged by Mr. Pierce, the CWA official, to put his assurances in writing, Mr. Smith only said that he would "give consideration" to the idea.

In a news conference before the meeting, Mr. Smith said that what he called "the world's best merger" would create minimal disruption at the two companies. He predicted the companies would be able to secure all the required approvals and close the deal within 12 months, despite anticipated "fraternity pranks" from AT&T and MCI intended to slow down approvals.

Mr. Smith said the response to the merger plans in Washington and in all the affected states has been positive.

He said he had plans to meet with several senators after the meeting, which was scheduled in the same hotel where President Clinton was meeting with the Democratic Leadership Conference -- a coincidence that made the annual meeting one of the few in history to be protected by the Secret Service.

The Bell Atlantic chairman also made it clear that while he will step down as chief executive in favor of Nynex Chairman Ivan Seidenberg a year after the merger is completed, he has no intention of going away soon. He said he will remain as the new Bell Atlantic's executive chairman and Mr. Seidenberg's boss until 1999, when he plans to retire after 40 years of service.

Mr. Smith said that in addition to earnings gains of 10 percent to 12 percent, the company expects revenues to increase in "the high single digits" over the next five years.

Pub Date: 4/27/96

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