ECID Coordination Committee: December 14th 2009: annus horribilis. 2010?

ECID Coordination Committee met with A-Lu management on December 14th. The meeting started with the handing out of resolutions by Stuttgart and Nuremberg employees criticising ”Outsourcing, co-sourcing, offshoring and downsizing as the keywords in the group leading to an unprecedented disastrous cutback of the staff”. Unfortunately, this applies to most European subsidiaries, especially at the moment in Romania where workers were on strike.

Management confirmed the job suppressions figures in Alcatel-Lucent EU subsidiaries.

• Managers plan: 402 at the end of Q3. Not completed yet. A few more until year end
• New restructuring plan announced in Q3: 2269
• Sale of manufacturing plants in Bonndorf(623) and Battipaglia: totaling 710
• Co-sourcing: (fixclass, mobile NGN, IS/IT, Business Process, Payroll): +/- 1090

Total: <= 4500 confirming what we knew already.

Some country figures have been improved. On the positive news, management indicated that 1736 recruitments were made in Q1 to Q3. This of course reduces the impact of the plans. The figure have however to be confirmed: part of it (a few hundreds?) simply comes from the purchase of other activities.

A-Lu confirmed that 80% of the 750 million cost cutting program was completed at the end of Q3. This count was made before most laid off had taken effect. We can think that the actual cost cuts will go widely beyond 750 M€ when fully implemented. We also learnt that the cost of restructuring is roughly similar to the yearly benefit. Really it costs a lot to cut costs. Where is the logic?

Finally the subcontractors plan (target: reduce by 5000) will fall very short of the initial objectives. This simply shows that many subcontractors jobs are totally interleaved with A-Lu jobs and cannot be cut. It would be more simpler for A-Lu budget and efficiency to recruit these people.

The sales growth objectives for 2010 are from 0 to +5% with a current estimate at +2.5%. These are provisional data. A-Lu guidance will be given on February 11th. We were told that there is currently no new major cost reduction plan, but ALU management confirmed that “efforts” will continue next year. We suspect some projects will negatively affect the workers in 2010: implementation of the principal unit model, Front End / Back End principle, possible sale of (part of) RFS and Vacuum activities, ASG / EBG new organisation (we were said it is neutral for employment), new cost reductions mentioned by Mr Verwaayen, new co-sourcing ideas our cost killers might dig out. We can hope that we will not bleed as much in 2010 than in 2009, but we must remain cautious. Plans are usually announced when it is too late.

Facing this situation, ECID will continue to fight for Alcatel-Lucent employees through:

• better sharing information between all European units
• working with representatives of the manufacturing units to fight the dogma of a fabless Europe. A meeting will take place in Stuttgart in January
• lobbying for our industry at the level of European Commission and Parliament. We have already received positive feedback from the European Metalworkers Federation and Nokia Siemens Networks works council
• protesting when we have to . See the success of our paneuropean action on Nov. 10th!

More on ECID website http://alw.web.alcatel-lucent.com/ecid/