Meeting of Alcatel-Lucent European Committee on 18 March 2009
The meeting was chaired by Adolfo Hernandez, president of EMEA region.
AIP and remuneration: no movement from management
EWC members complained about the salary freeze which has been applied across the board except for around ten countries where prohibited because of collective agreements or legislation. They also protested against the AIP allocation on two grounds:
- the imbalance between different BG and regions is irrational.
- the targets set for employees are more ambitious than those in the company's financial communications.
For 2008, the financial communications convey the message that “we have met our objectives” for revenue and operating results, whereas employees are being told that “we haven't met our objectives”!!
R&D sites: some indications
In December a FAQ on the intranet announced that 40% of R&D sites would be closed. Ph. Keryer provided some information about this in answer to questions from ECID.
As of December 2008, there were 87 R&D sites working for CPG. There were a considerable number of small sites, with 5 to 10 people, particularly in the US. By February 2009, there were only 65 sites. This reduction is the result of the closure of small sites or the merging of neighbouring sites. Some of these 65 remaining sites are also in the process of closure (Chateaufort near Paris, merger of sites in Chicago and Wipany and Murray Hill in New Jersey).
Of the 65 sites currently in existence, 23 are considered small, with less than 25 R&D staff. The plan to reduce the number of sites will continue. It is believed that the target of reducing the number of R&D sites by 40% can be achieved by the end of 2010.
For CPG, the R&D cost reduction programme is also being achieved by the cut in the number of subcontractors and through mobility between CPG and other entities within Alcatel Lucent. The number of employees affected by mobility has not been specified.
Manufacturing sites: management tries to paint a reassuring picture
In its 12 December announcement management mentioned a target for cost-cutting in manufacturing, without giving any further details. Alongside this, certain developments have led to concerns for the future of the manufacturing sites: Bonndorf has been placed in a separate subsidiary, activities have been moved from Battipaglia, Trieste and Eu to low-cost locations, and the number of contractors has fallen in Trieste and Battipaglia.
Current situation for manufacturing:
- Entreprise business sites:
- RFS sites spread between a number of different countries including France and Germany) 900 employees
- Bonndorf and AVT (Alcatel vacuum technologies) sites 900 employees
- Carrier business sites: 3300 employees, 11 sites
- France: 2 sites (Calais, Eu)
- Italy: 2 sites (Battipaglia, Trieste)
- UK: 1 site (Greenwich)
- Poland: 1 site
- China: 2 sites
- Mexico: 1 site
- US: 2 sites
Management is trying to put across a reassuring message on the future of the manufacturing plants.
C. Pedini explained that cost reductions will be achieved mainly through optimising investments.
EWC members pointed out that management has social responsibility as regards the future of manufacturing sites, especially during the current period of crisis where unemployment is rising in many employment catchment areas in Europe.
EWC members are against any sale or closure of a manufacturing site.
Two aspects were emphasised: since S. Tchuruk introduced his “fabless” policy, a number of plants have been sold, only to close a few years later. Also, the Battipaglia plant has been the recipient to considerable European funding for a number of years. That means that Alcatel Lucent has a responsibility vis-à-vis the site, its workers and the local authorities of the area where it is situated.
Job cuts: 1000 “managers”
The overall breakdown of the job losses will be: 450 in EMEA, 450 in North America and 100 in Asia. According to P. Beretti, these cuts will affect levels down to N-4 or N-5 (N = B. Verwaayen).
No detailed breakdown of job losses by country or by organisation was given.
Reduction in the number of contractors
There are currently 11,000 contractors: 4,000 in Europe, 5,000 in Asia and 2,500 in the Americas. These figures do not include temporary workers at manufacturing sites or fee-based contracts.
Management's target is to half the number of contractors, either by stopping the activities concerned, or by replacing contractors with Alcatel Lucent employees. The reduction will be greater in high-cost countries. It will take place gradually during 2009.
Headcount at the end of 2008:
TOTAL 76,200
The increase in headcount in 2008 (+1,300) is essentially due to “managed services” contracts (insourcing). Excluding headcount linked to these contracts, headcount fell by –1,400 in EMEA in 2008 alone and rose by 800 in China! This might look as though activities being relocated to China but the resemblance is purely coincidental… ;-(
ECID information: http://aww.alcatel.com/ecid
