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Telephone customers using AT&T for out-of-state long-distance service could experience some inconvenience beginning Sunday if the Communications Workers of America go on strike as scheduled when their contract expires at midnight tonight.

Joe Petersen, executive vice president for Local 7704 in Salt Lake, said about 500 Utah AT&T employees, the majority of them at the company's billing center in Murray, will strike along with other locals nationwide if negotiations fail.Friday afternoon, local AT&T employees, carrying signs and wearing red T-shirts, got in several hours of picketing practice as they held a rally in front of the AT&T office, 70 S. State, protesting the company's hiring of replacement workers while negotiations are under way to prevent a strike.

Local president Randy Warner said the company shouldn't be hiring replacement workers from employment agencies while negotiations are being held. There is still a possibility a strike will be averted to-night, he said, although nationally, union members voted to authorize their president to call a strike in the event consensus isn't reached on a new contract.

Warner said AT&T showed a $2 billion profit last year and is financially sound. He said it is also distressing to know the chairman of the board of AT&T made $1.5 million last year.

Meanwhile, there was guarded optimism late Friday that a new agreement could be reached before midnight tonight - avoiding a nationwide strike sure to be costly to both sides.

Negotiators for AT&T reportedly put an offer for a new health-care proposal on the table Friday, but the unions said the company's latest proposal remained insufficient.

AT&T's latest proposals still mean "that millions of dollars of health-care costs would be shifted to workers and that prevents us from reaching an agreement," said Steven Rosenthal, a spokesman for the Communications Workers of America.

However, Rosenthal said there was "cautious optimism" that the company and unions could overcome their differences on health benefits and still negotiate wages and job security issues in time to reach new labor contracts before the old pacts expire.

"There is still time to reach an agreement," Rosenthal said.

If there is a strike, though, the average telephone customer will likely not notice, said AT&T spokesman Ray Child.

"Ninety percent of the long-distance calls made are direct-dial and use automated electronic switching. Those calls will be unaffected," Child said. "Only those calls requiring some kind of operator assistance will be affected."

Contingency plans to put management employees at the operator consoles are in place, Child said, a move AT&T hopes will diminish any inconvenience created for customers.

Petersen said pickets will return to 70 S. Main in Salt Lake and 5245 S. College Drive in Murray on Sunday if the strike occurs. Also, picket lines could be formed at AT&T Phone Stores in local malls.

The major issues on the bargaining table are health insurance benefits and a cost-of-living raise, Petersen said. AT&T is proposing a 6 percent raise over the three-year life of the union contract while shifting some of the health insurance cost burden to the employees.

Presently the company pays 100 percent of the health insurance package. The company wants employees to pick up 20 percent of the cost of hospitalization and doctors office visits, Petersen said.

Petersen said the national union may take the strike high tech if needed. He said the CWA and its parent union, the AFL-CIO, are considering an electronic picket line. The organizations would urge other unions to bypass AT&T carriers for long-distance telephone calls and fax messages by using alternate carriers.

"That could involve as many as 85,000 offices," Petersen said. "That would be a chunk of revenue."

Petersen said an electronic picket line would be a temporary move because AT&T is the only union-affiliated long-distance carrier.