Lucent to sell 2 of 4 U.S. equipment plants

Factories employ 8,400

company will contract out some manufacturing

January 20, 2001|By BLOOMBERG NEWS

MURRAY HILL, N.J. - Lucent Technologies Inc., the biggest maker of phone equipment, said yesterday that it plans to seek buyers for two of its four U.S. factories in the next six months and to cut costs by contracting out manufacturing.

The plants, in Oklahoma City and Columbus, Ohio, have 8,400 employees making traditional phone switches and wireless equipment. Lucent can't predict how many positions may be lost until sale negotiations are completed in about six months, said Mary Ward, a Lucent spokeswoman.

"We very probably will be working for another employer," said Michael Quinlan of the International Brotherhood of Electrical Workers, which represents 6,400 workers in Columbus and Oklahoma City. "Lucent wants out of manufacturing."

Lucent has been slower than many rivals to pull out of manufacturing and focus on equipment design and development.

Last year, Nortel Networks Corp. sold four factories to Solectron Corp. for $900 million, and Flextronics International Ltd. paid $100 million for Cabletron Systems Inc.'s manufacturing and repair operations.

Cisco Systems Inc. contracts out about half of its manufacturing to Solectron, Flextronics, SCI Systems Inc. and others.

"Lucent is way behind," said Steve Levy, an analyst atLehman Brothers Holdings Inc. , who rates the stock a "hold."

Lucent stock, once a high-flier, fell 81 percent last year as earnings tumbled. The stock rose 88 cents to close at $20.56 on the New York Stock Exchange yesterday.

Since unveiling a plan in April to reduce its manufacturing work force of 30,000, Lucent has spun off Avaya Inc., an office-networking unit; sold Power Systems, a maker of power supplies, and earmarked its Agere Systems Inc. microelectronics business for a spin-off. That leaves the Columbus and Oklahoma City factories, and plants in Atlanta and Merrimack Valley, Mass.

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