AT&T will spend $565 million on alternative-fuel vehicles

CEO Randall Stephenson says companies like his need to make investments in sustainable growth and strong workforces to boost the economy.

Stephanie Condon Staff writer, CBSNews.com
Stephanie Condon is a political reporter for CBSNews.com.
Stephanie Condon
3 min read

WASHINGTON--AT&T is making the largest ever commitment by an American company to purchase alternative-fuel vehicles, CEO Randall Stephenson told the Economic Club of Washington on Wednesday.

"My No. 1 job is long-term growth," he said. "I only know of one way to do that and that's by investing in areas that drive sustainable growth."

Companies like AT&T, Stephenson said, have an obligation to make investments that will drive the nation's economic growth and productivity, as well as to invest in America's workforce.

AT&T CEO Randall Stephenson says that his company will embrace alternative-fuel vehicles. Stephanie Condon/CNET
"The time to invest in America's future is not when (the economy) turns, the time is right now," he said. "By working together, I do believe we can accelerate the velocity of commerce in this country."

Stephenson commended President Obama's emphasis on expanding communications infrastructure, as well has his commitment to health care. He and other AT&T executives, however, cautioned against regulations on broadband funding that could stifle private investment, as well as further union reforms in the Employee Free Choice Act.

"Less regulation results in more investment," he said.

The company plans to make two investments amounting to $565 million to increase the number of alternative-fuel vehicles it uses from 100 to 15,000 by 2020.

Over the next five years, AT&T will spend $350 million to purchase 8,000 vehicles that run on compressed natural gas. The new vehicles AT&T will buy will be built by the U.S. auto industry and should produce 25 percent less greenhouse gas emissions than traditional vehicles, Stephenson said.

AT&T will also spend $215 million to replace nearly all of its 7,100 passenger vehicles over the next 10 years with alternative-fuel vehicles, starting with electric hybrids.

With these two investments, AT&T expects to reduce its gasoline consumption over the next 10 years by 49 million gallons.

The company continues to make large investments--which should amount to around $17 billion to $18 billion this year--expecting to weather the current economic downturn relatively well, Stephenson said.

AT&T's traffic has increased 50 percent year over year, largely in video and data. As an additional sign of its economic health, Stephenson pointed out the company has increased its dividends in all 25 years of its history, including during the 2001-2002 downturn.

"This environment is tough, but it really isn't much more difficult in our industry than what we experienced in the '01-'02 time frame," he said.

Stephenson said the company's growth lies in promoting mobility.

"Wireless is going to be a big opportunity inside and outside the United States," he said. "Everything you do on your desktop, over time your expectation is that it will be mobile."

Federal commitments to broadband infrastructure will help accelerate economic growth, Stephenson said, as long as conditions are not imposed that would deter private investment or influence companies to invest in the wrong technologies.

"The obsolescence curves we are riding are significant," he said. "We have got to make sure we get the policy right on this stuff."

AT&T is not actively seeking stimulus funds, said Tim Harden, AT&T's president of fleet operations, though it will take a look at what is available.

He said federal agencies will have to take inventory of available broadband before making any policy decisions and carefully consider definitions for undefined terms like "unserved" and "underserved." They will also have to be careful shaping the open-access conditions mandated for some stimulus funds.

"I would hope they would not seek to go farther than the FCC has already gone," Harden said.

Stephenson also said that, although more than half of AT&T's workforce is unionized already, the company opposes some aspects of the Employee Free Choice Act, a bill introduced Tuesday in Congress to make it easier for workers to join unions.

"Secret ballots we think are inherently important," he said. "How first contract arbitration manifests itself is very important."

While AT&T's overall workforce is declining because of the dismal economy, the company expects to add 3,000 new high-tech jobs this year that will be union-represented in its growth areas of wireless, broadband, and video. The added jobs will fulfill AT&T's commitment to bring 5,000 offshore jobs back to the United States.