EMF Conference Brussels, 14 th - 16 th December 2005

1. European Works Councils within the ICT Sector: Alcatel's restructuring and the role of its European Works Council EMF Conference Brussels, 14th - 16th December 2005 This activity is held in co-operation with Uni-Europa and with the financial supportof the European Union

2. Alcatel's restructuring • 3 phases: • 1995-2001: refocusing on core business activities and reducing costs. • 2001-2004: the industrial 'tsunami' • 2005 onwards: the R&D issue…European challenge

3. Refocusing and the bubble effect! Turnover 2000 €31.4 billion Turnover 2003 €12.5 billion This activity is held in co-operation with Uni-Europa and with the financial supportof the European Union

4. ACQUISITIONS €18 billion SALES €11 billion This activity is held in co-operation with Uni-Europa and with the financial supportof the European Union

5. The cost of restructuring: €17 billion

6. Alcatel's restructuring • -2001-2004: the industrial 'tsunami' • A stock market crash combined with an industrial crash. • Outsourcing of almost all factories • Surrender of all European industrial capabilities to the benefit of US companies. • Handing the unions a fait accompli:trade union negotiations of accompanying measures (early retirement) • Negotiation at national level since the EWC was nothing more than a forum for information and exchange.

7. Alcatel's restructuring • -2005 post-crisis assessment • Human consequences • Preservation of remaining industrial capacity since the assessment of outsourcing is disastrous (Sanmina/Flextronics,Jabil, etc…). • Adoption of a rationale of permanent and rapid restructuring • The practice of negotiating social issues has made progress in some countries, but Ecid played a secondary role. • Negotiation has meant that innovation potential has not been destroyed. - +

8. Alcatel's restructuring • -2005 the R&D challenge • The threat of the relocation of R&D has followed the threat of industrial relocation: negotiating a balance. The basis of a consensus: retaining strategic studies and R&D jobs in Europe with the capacity for integrating new blood in return for more intense internationalisation. • -To halt the policy on outsourcing and on the development of ‘subcontracting alone'. • To encourage investment in research and industrial applications: extending the dynamism of the competitiveness centres in France to European projects. • To give thought to the accelerating changes with regard to core business.

9. Alcatel’s Strategy • A profession of architect-integrator • “Services” and convergence orientation • A “de-multiplied” partnership policy • The temptation of low cost R&D

10. The challenges for the Alcatel EWC • Prepare the pivot role of Ecid for 'negotiation of social issues at European level' in collaboration with the unions and EMF. • Make European trade union action and also action taken by European trade union bodies EMF/ETUC more visible: example of the Ecid website. • Actively invest in a policy for developing R&D and innovation both within Alcatel and at European level. • Push for a voluntary European industrial policy, especially for space activities.

11. ECID Intranet Web