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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: SirWalterRalegh who wrote (21847)	4/6/2006 8:09:00 AM
From: Teddy	Respond to of 21876

Franco-American By Ed Gubbins With 8000 job cuts coming to a combined Alcatel/Lucent Technologies, Chief Executive Officer Pat Russo will have some tough choices to make: How much of the cuts should fall in the U.S., where big corporate bonuses and deep cuts in retiree benefits have singed her popularity among employees (the Corporate Library recently concluded Russo has one of the biggest pay/performance gaps in corporate America)--and how much should fall in France, where hordes of young people recently took to the streets to upend cars and light stuff on fire to protest a law that would make it easier to fire them? True, Alcatel's current CEO, Serge Tchuruk, didn't spare the axe when right-sizing Alcatel for the post-bubble telecom winter; he cut some 40,000 jobs. But it may be harder for French employees to hear "you're fired" from Russo, who hasn't spoken French since high school and is about to move to Paris to lead one of France's largest companies. (I imagine Russo listening to one of those instructional CDs that aim to teach languages through rote repetition: "Nettoyez vos bureaux par midi...Clean out your desks by noon...Votre chèque de règlement sera retiré si vous mettez le feu au bâtiment...Your severance check will be revoked if you set fire to the building.") Unless Russo divides the cuts equally among continents, any choice will ignite outrage. More cuts in the U.S., and she's viewed as a traitor to her former coworkers. More in Europe, and she enflames French nationalism and labor politics. ("We give the Americans Lady Liberty, and they give us Pat Russo?" they'll cry.) It's easy to imagine the new entity--60% controlled by Alcatel, headquartered and stock-listed in Paris, with a European majority on the board--making more cuts here than abroad. (I've often heard it said that, in the coming wave of equipment vendor M&As, extranational firms such as Siemens, Nokia and Ericsson view American firms as plum acquisition targets in part because labor laws make it easier to lay off workers here than over there.) Perhaps the smartest move for Alcatel/Lucent is for Tchuruk to make those 8000 job cuts before he retires this summer. Let him be the bad guy and disappear, taking with him the ill will that would otherwise be directed at the person who actually has to lead this beast of a company going forward.