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Alcatel-Lucent's future is at risk: CEO

Michel Combes, Telecom equipment maker Alcatel-Lucent Chief Executive Officer, attends a commission hearing at the National Assembly in Pari
Michel Combes, Telecom equipment maker Alcatel-Lucent Chief Executive Officer, attends a commission hearing at the National Assembly in Pari

PARIS (Reuters) - Alcatel-Lucent's future is at risk after the telecoms company, which has been in the red since 2006, missed key technological shifts, its chief executive Michel Combes said on Tuesday as French workers protested against job cuts.

The Franco-American group last week unveiled plans to slash 10,000 jobs worldwide, including 900 in France, arguing the cuts were its last chance to stem years of losses and turn the company around.

"This company could disappear," Combes told Europe 1 radio.

During a two-hour parliamentary hearing, Combes told French lawmakers his plan differed from previous attempts to overhaul Alcatel since 2006 - six in total - and he pledged to find new jobs for all 900 workers facing layoffs in France.

"I don't plan on there being a 7th" restructuring plan, Combes told parliament's economic affairs committee. "I'm convinced that we have a plan that is coherent, that is complete, that addresses all the problems the company is facing and can get it back on its feet."

More than 1,500 Alcatel-Lucent workers marched in Paris on Tuesday to protest against the plan, which involves closing several sites including the Orvault facility in northern France that in January Alcatel management promised to maintain.

Backed by a sympathetic Socialist government which has pressed Alcatel-Lucent to limit job cuts, CFDT union leader Herve Lassale said workers would try to extract concessions from Combes in talks starting this month.

But Combes declined to say whether he would negotiate on the number of departures, promising instead to place all laid-off workers in new jobs "within or outside" the company and seek buyers for the threatened work sites.

"This is the company's responsibility with regard to employees, some of whom have worked for the company for 10, 15, 20 years," he said.

He added that he was seeking buyers for the sites and had entered discussions with a potential acquirer for a site in the southern city of Toulouse.

STATE INTERVENTION?

The French government, battling against years of de-industrialization and high unemployment, has warned it could use new labor rules to block the plan.

Government sources said it is counting on new rules that would force management to agree terms with trade unions to produce a fair plan, although Combes faced little direct criticism over layoffs.

He told lawmakers the firm had little choice but to cut operating costs and consolidate resources around fewer sites as after losing 700-800 million ($1.08 billion) per year since its merger with U.S. firm Lucent Technologies in 2006.

"The plan sets targets that are key to the survival of the company ... But it can obviously be improved. That's the point of the social talks that begin today," Combes told Europe 1 radio, adding that he had four months to negotiate with unions the terms and timeframe of the restructuring.

Under labor reforms that became law in May, firms must agree on terms of their restructuring with unions before submitting them to the Labour Ministry for approval. Previously, they only had to consult with a works council.

Combes, who took the helm of Alcatel-Lucent in April after being CEO of Vodafone Europe from 2008 to 2012, said he had already put aside a plan by predecessor Ben Verwaayen that aimed to end completely the group's activities in France.

"If I decided to come back to France to try to get this company back in shape, it's because I believe in it," he said.

(Reporting by Nicholas Vinocur and Cyril Altmeyer; Writing by Natalie Huet and Nicholas Vinocur; Editing by David Holmes and David Evans)

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