Alcatel-Lucent: how Michel Combes defends his social - Clubic

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Posted by Ludwig Gallet Tuesday, October 15, 2013

Tuesday evening, Michel Combes, the CEO of Alcatel-Lucent, was heard by the Commission of Economic Affairs of the National Assembly. The opportunity for him to justify a social scope.

They were more than a thousand employees of Alcatel-Lucent to demonstrate in the streets of Paris. They denounce the scale of the social plan announced last week at a price of 10,000 job cuts worldwide, including 900 in France. Tonight is before the members of the Committee on Economic Affairs that the Group Managing Director, Michel Combes has defended his plan “ Shift .” The man considers this, the sixth time in seven years, is not a social level, but rather an industrial plan aimed at restoring the competitiveness of the company.

Inevitably, questions parliamentarians sought to understand how Alcatel-Lucent got there, how would shape the social and requested a response to the government’s call to the defense of a certain economic patriotism.

Alcatel responsible for his problems …

On this point, Michel Combes is adamant Alcatel difficulties are primarily attributable to the fact of his mistakes. The group lost each year between 700 and 800 million euros. Its net loss for the year 2012 amounted to € 1.2 billion. Besides a huge debt.

According to Michel Combes, the group pays its failures. Starting with the turn of 3G, which was not anticipated, not believing at the time for its development due to low number of available terminals. To which must be added the cost too high to compete. “ Our administrative and marketing expenses represent 14.1% of sales, against 11.5% to 12% for competition .” Many points of margin lost by him to invest in networks. But still, the excessive disparity of business entities must be reviewed by him. The leader explains for example that the group has 58 R & D sites in the world.

Another problem is the deployment of investment on different networks. The Director General explained as Alcatel dedicates 50% of its investments in 2G and 3G networks, the small remaining half being so devoted to 4G. For him, this “ can not go .”

… But not only

However, Michel Combes not avoiding external brakes. He denounces first European regulations. For him, Europe has become the forgotten continent of telecommunications. While the Asian industry turns full pot in terms of production than its U.S. equivalent is a reference in terms of innovation, Europe remains mired in him in a vicious circle.

“ The United States realize significant investment, led by players such as Sprint and Verizon. This allows smaller companies, start-up type to enter the market, thus creating a true telecommunications ecosystem. What follows is the development of technologies for quality, for which customers are willing to pay a fair price. This results in higher margins, allowing new investments . “

On the other hand, Europe has it as an aberrant legislation. Firstly because it focuses on a logical price. Unable to invest massively, European players in his suffering from a lack of technological differentiation. Customers choose is based on price, which compress margins.

Michel Combes also back on the rough competition on the telecommunications market, with players such as Huawei, which he said made a disproportionate place in the European market

Plan Shift. more details in the coming weeks

To recover, Alcatel-Lucent is about degreasing. Massively. With 10,000 job cuts worldwide, including 900 in France, the band broke up a substantial part of its global workforce. Michel Combes would also streamline the activities of the group. For R & D, for example, he hopes to halve the number of dedicated in the world by 2015.

Exact figures on the social plan announced in France sites should be disclosed in coming weeks. The time is still in the negotiation, and the mobilization of employees who report the inevitable closure of sites in Toulouse and Rennes. Not to mention the fears brought on others, like Orvault. Responding to questions from parliamentarians, Michel Combes said that the group was not on this site “ perspective sufficient load .” This does not allow him “ ensure only the future .” He promised to visit the site to meet the employees.

With regard to activity, Michel Combes evokes an indispensable strategic reorientation in a time when we pass “ from 3G to 4G, copper to fiber, voice to IP “ Should establish an economic patriotism

Last main point raised during the hearing: the notion of economic patriotism, to put forward the work of European actors (although Alcatel would be more fully) in the European market. “ I am glad we called this solidarity ,” says managing director, that this policy was its place from the moment Alcatel designs satisfactory products.

Yes to economic patriotism operators, but not to a state protectionism. Michel Combes same categorical shows. “ I am opposed to any form of protectionism, we will be better “, is it justified.

Finally, it stresses the need to “co -innovate “, with large groups, as it has done with the U.S. Qualcomm. An actor whose stake allowed to raise funds through a capital increase, encouraging innovation. For Michel Combes is satisfied and stubbornly defends the Shift Plan:. “ A company that no longer innovates is doomed ”