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Pin to quick picksVodafone Share News (VOD)

Share Price Information for Vodafone (VOD)

London Stock Exchange
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Share Price: 69.36
Bid: 69.34
Ask: 69.36
Change: 1.28 (1.88%)
Spread: 0.02 (0.029%)
Open: 68.48
High: 69.78
Low: 68.48
Prev. Close: 68.08
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UPDATE 2-France pressures Alcatel-Lucent on lay-off plans

Wed, 09th Oct 2013 15:26

* Govt presses firm to strike union deal or face blockage

* Alcatel-Lucent hit by years of losses since 2006 merger

* Shares fall more than 6 pct

By Nicholas Vinocur and Leila Abboud

PARIS, Oct 9 (Reuters) - France warned on Wednesday it coulduse new rules to block a plan by telecoms company Alcatel-Lucent to lay off 900 French workers, but unions andgovernment sources questioned whether the state would go thatfar.

The Franco-American group unveiled plans on Tuesday to slasha total of 10,000 jobs worldwide, arguing that the cuts were itslast chance to stem years of losses and turn the company around.

The plans were criticised by President Francois Hollande'sSocialist government, which is struggling to tackle highunemployment. Prime Minister Jean-Marc Ayrault said new labourrules could be invoked to stop the company forcing them through.

"If there is no majority agreement (with unions) therestructuring plan won't be accepted, because the law now givesthe state the responsibility to act," Ayrault told Europe 1radio.

"We want a negotiation that saves as many jobs as possible,as many sites as possible," he said, calling on Alcatel-Lucentto review a plan which at present foresees the closure of sitesin Rennes and Toulouse and the possible sale of others.

France has a long history of intervention in the corporatesector. The case follows an abortive attempt by Hollande earlierthis year to rescue activities earmarked for closure atArcelorMittal's steelworks in northeastern France.

The French state owns a 3.6 percent stake in Alcatel-Lucent,making it the second-biggest shareholder behind investment fund Capital Research & Management. Alcatel-Lucent shares were downabout 7.5 percent to 2.56 euros at 1523 GMT.

Alcatel was once one of France's biggest conglomerates withactivities from trains to electronics, but it no longer earnsmajor revenues there following its 2006 merger with Lucent.France accounted for a mere 5.7 percent of its 2012 revenues of14.44 billion euros.

Likewise, the French component of the overall restructuringof its 72,000-head workforce is relatively minor. Even beforeTuesday's announcement, its French workforce was 8,300 - lessthan half its total in 2006 after previous job-cutting.

Ayrault's call for talks will be the first big test of rulesintroduced in June giving trade unions more say in corporatedecisions, a move intended to emulate Germany's cooperativelabour model and avert the risk of strike action.

GRANDSTANDING?

Under those rules, firms must win backing of trade unionsrepresenting a majority of unionised staff and then submit theplans for government approval. Previously, they had only toconsult a works council whose opinion was non-binding.

"Our goal is to weigh on the number of lay-offs," HerveLassalle, a CFDT union delegate at Alcatel-Lucent, told Reuters.The CFDT aims in talks starting next month to rescue some sitesfrom closure and oblige the company to fund job re-training.

If talks fail, the state will proceed to an in-depth checkof the company's restructuring plans, assessing whether they areviable given the group's assets and economic health.

"There is a bit of grandstanding in Ayrault's comments,"Stephane Dubled, a delegate of the CGT union which has minorityrepresentation at the group, told Reuters. "The state has somepower in as much as it decides to use it ... but there hasn'tbeen much experience of that so far."

One government source said its main aim was to applypressure so that unions could come out of negotiations with thebest possible result.

"The idea behind what every government official has saidsince yesterday is that this should be put to negotiation andhope that the final result is to limit or even avoid altogetherany lay-offs," said the source, who requested anonymity.

Alcatel-Lucent, which battles in a fiercelyprice-competitive market with larger rivals Ericsson of Sweden, China's Huawei and Finland's Nokia, has posted five straight quarters of net losses.

France's left-leaning industry minister Arnaud Montebourg,who has led a "Made in France" campaign, said French telecomnetwork providers should favour Alcatel-Lucent's products.

But there too, there are doubts over whether the operatorswould follow such a policy and what effect it could have.

At present Orange, which is 27 percent stateowned, is its major French customer. But even if Vivendi's SFR, Bouygues Telecom and Iliad allswitched overnight to buying Alcatel-Lucent gear, this would notbe enough to solve its problems.

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UK earnings, trading statements calendar - next 7 days

Wednesday 8 May 
Alliance Pharma PLCFull Year Results
boohoo group PLCFull Year Results
Brighton Pier Group PLCFull Year Results
Cornerstone FS PLCFull Year Results
HydrogenOne Capital Growth PLCTrading Statement
JD Wetherspoon PLCTrading Statement
Light Science Technologies Holdings PLCFull Year Results
OSB Group PLCTrading Statement
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IMI PLCTrading Statement
ITV PLCTrading Statement
John Wood Group PLCTrading Statement
Rathbones Group PLCTrading Statement
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Synthomer PLCTrading Statement
Wheaton Precious Metals CorpQ1 Results
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CRH PLCQ1 Results
International Consolidated Airlines Group SAQ1 Results
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TBC Bank Group PLCQ1 Results
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Cerillion PLCHalf Year Results
Diploma PLCHalf Year Results
HgCapital Trust PLCQ1 Results
Huddled Group PLCFull Year Results
Team Internet Group PLCQ1 Results
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Vodafone Group PLCFull Year Results
  
Comments and questions to newsroom@alliancenews.com
  
A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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