This week, two stories about Alcatel-Lucent hit the business headlines. Both suggest further leadership challenges facing the organization. In each, it is hard to separate fact from creative fiction
Since the merger of American and French telecommunication firms, there have been a series of boardroom squabbles and upheavals in the merged organization.
Today [September 8th 2009], disturbing news over the AFL agency news-lines reported that five employees of French/American company had occupied its Italian factory at Battipaglia, near Naples, overnight and were threatening to set fire to themselves to protest restructuring at the plant
“They have jerry cans of petrol and are threatening to immolate themselves and set fire to the factory. They’re preventing anyone from getting in,” Giovanni Sgambati of the local branch of metal workers union UIL. [was quoted by News Agency AFP as saying]
He said the five employees of the telecommunications equipment giant entered the factory at Battipaglia, near Naples, overnight.
They want Alcatel-Lucent to abandon its plan to suspend production at the site,” where around 100 people work in research and another 100 in production, Sgambati said.
Alcatel-Lucent said in a statement that it was “managing the situation very attentively along with the local authorities. While we understand the concern of workers at Battipaglia, Alcatel-Lucent is working continuously with local authorities and employees’ representatives to ensure a lasting solution for the employees.”
Alcatel-Lucent, which employs around 2,000 people in Italy, announced several months ago its intention to restructure the Battipaglia factory by giving up production activities and keeping the research facilities. Italian Economic Development Minister Claudio Scajola has announced a meeting to discuss the matter Sept. 15.
The group has been through a long period of cuts and boardroom upheavals since the groups merged.
That alarming story did not have an immediate and violent end [as of September 9th 2009] and the longer term challenges to the company’s leaders regained the headlines.
The rationale for the 2006 takeover was the creation of effective competition for rival Chinese telecommunications accessory manufacturers Huawei and ZTE. But the hoped-for results had not followed the takeover, and rumours developed that a takeover was imminent.
It is not out of the question that the financial markets, especially Wall Street, are using a bit of creative license to promote stories and stock market bullishness.
Update [Sept 16th 2009]
The rumours and denials continue. Huawei’s denials fail to convince:
DALIAN, China (Reuters) – China’s Huawei HWT.UL, one of the world’s top makers of networking equipment, on Thursday denied a report it was in talks to form an alliance with Franco-American rival Alcatel-Lucent (ALUA.PA).
French magazine Challenges said the two companies had begun preliminary tie-up talks, envisioning making a certain number of products together, but had ruled out a merger.
Alcatel-Lucent shares rose slightly in Paris on Wednesday.
“The reports are inaccurate. Huawei is not in discussions with Alcatel-Lucent,” said Huawei spokesman Ross Gan. A spokeswoman for Alcatel-Lucent declined to comment to Reuters on Wednesday.
This is not the first time Huawei has scotched speculation of a linkup with Alcatel-Lucent.
Late last month, the Chinese company declared it had no plans to buy a stake in Alcatel-Lucent, two days after the latter’s stock surged 16 percent in a single session partly on market talk it could be bought by a Chinese rival.
There have been instances though where a Chinese company has said something and later done quite the opposite