Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Alcatel (ALA) and France -- Ignore unavailable to you. Want to Upgrade?

To: zbyslaw owczarczyk who wrote (3503)	6/29/2001 3:22:34 PM
From: zbyslaw owczarczyk	Respond to of 3891

Alcatel's Factory-Shutdown Plan Angers Unions By Kristi Essick - Paris Bureau Chief European labor union representatives on Friday walked out of a meeting with Alcatel CEO Serge Tchuruk, during which he explained that the operations of 50 of the French telecommuncations equipment supplier's factories would be transferred to outsourcing companies over the next 18 months. Alcatel plans to shut a majority of its manufacturing plants before the end of 2002, putting some 13,500 jobs at risk worldwide. The union representatives had gathered in Paris to discuss the details of the planned closures, which were first reported in the Wall Street Journal on Wednesday. Since then, labor unions have expressed outrage that such a large-scale restructuring was announced without warning via a newspaper article. Tchuruk told the unionists today that he wanted to meet with them to outline the details of the restructuring before speaking further to the media, and that his priority was to "try as much as possible to inform them first." But the "syndicalists" were in no mood to be wooed. After hearing the details of the factory closures, the unions voted to stop the meeting and walked out en masse. The Wall Street Journal reported that Alcatel would sell off all but 12 of its factories around the world by the end of 2002. But on Friday, Tchuruk said the company would transfer the operations of 50 plants to outsourcing companies - principally 41 component-manufacturing sites and nine battery-manufacturing sites. Those divisions, like Alcatel's enterprise distribution business, which is now looking for a buyer, could be sold down the line, he added. The company has a total of about 100 factories in operation today, and it says it plans to keep its optics and space-oriented manufacturing plants. The percentage of the 13,500 employees that would be offered jobs by the outsourcing companies remains uncertain. Out of the 50 factories being shuttered, 23 are located in the United States and 27 in Europe, according to the CFE-CGC union, which counts 193,000 mostly manger-level members in France. Alcatel claims that the move to become a "fabless" company has been on the cards for several years, and that the closure of the plants is part of an ongoing restructuring meant to enable the company to focus on the telecom equipment market. By outsourcing manufacturing, Alcatel hopes to become more flexible "to face up to jolts in the market," according to Tchuruk, who said also on Friday that Alcatel would outsource production only to reputable companies with strong social agendas. But union representatives charge that the CEO orchestrated the "leak" to the Wall Street Journal to give Alcatel's sagging stock price a boost. "Once again, the head of a large group, in outright contempt for his employees, chose to make an announcement aimed at the stock market (which was by the way a flop), without even having informed his staff," the CFE-CGC said in a statement. The wrath of Europe's well-organized and influential labor unions is likely to only worsen as Alcatel moves into action on its restructuring plan. Plus, according to Tchuruk, Alcatel does not rule out further factory outsourcing plans. Earlier stories from TheStandard.com: