Now in his 21st year working for the giant Lucent Technologies factory here, Bruce Bennett has seen the flow of optical telecommunications gear coming through his testing lab go from a torrent that guaranteed plenty of overtime to a trickle. He's seen US$175,000 worth of wealth in his retirement account evaporate as Lucent stock has collapsed.
And now Bennett is growing increasingly resigned to the likelihood that his very job will soon be the next thing to vanish, as a once-soaring Lucent desperately slashes operations in hopes of turning from US$1 billion-a-month losses back to profitability. On the auction block: its landmark Osgood Street plant here near the Haverhill line, and as many as 1,800 of the 2,400 manufacturing jobs that Lucent hopes but cannot promise another company would pick up as a "contract manufacturer."
"It is very depressing to go to work," Bennett, 46, said on Wednesday at the office of Communications Workers Local 1365, where he serves as a shop steward for testing division employees. "The mood is horrible. There's not much work to do. There's not much being ordered. You can spend a lot of time twiddling your thumbs."
PHOTO: NY TIMES
Bennett says he can remember days in the 1980s when 10,000 people worked at the North Andover site "and you had to wait in line to go to the bathroom. Literally wait in line."
Like everyone else at the plant, which started a half century ago making telephone gear for the AT&T Bell System, Bennett is anxious over having no clear answers from Lucent about what will happen to their jobs, and when. Nor does he have great optimism that a contract manufacturer would want to buy the sprawling complex.
"In the back of my mind, I know I've got to go find a job," Bennett said. "It's just a matter of when."
In an announcement that landed like a bomb on the Merrimack Valley economy last Friday, Lucent revealed that as part of its continuing drive to shed its nuts-and-bolts manufacturing business, it hopes to sell the North Andover plant. Last month it reached agreements with Toronto-based Celestica to acquire its plants in Columbus, Ohio, and Oklahoma City.
About 4,000 people now work at the North Andover plant, 1,500 fewer than last summer and roughly 8,000 below the peak staffing levels of 1980s. Lucent -- along with Raytheon in Andover -- remains one of the mainstays of the Merrimack Valley economy.
Beyond North Andover, Lucent has become a major player in the state's high-tech economy through acquiring a dozen Bay State startups since 1996, including large operations in Boxborough, Cambridge, Hyannis, Marlborough and Westford.
`Lucentless future'
But now longtime employees and local activists are focusing on what the Eagle-Tribune of Lawrence, Massachusetts, on Monday editorialized is the increasing likelihood of "a Lucent-less future" for North Andover and the region.
Lucent said it is pursuing a plan that could eliminate between 1,400 to 1,800 jobs. Between 600 to 800 workers employed in North Andover would remain with the company, selling, assembling and testing equipment. The fate of an addtional 1,600 to 1,800 manufacturing workers depends on whether Lucent can convince a contract manufacturer to hire the employees. The company is also considering an alternative plan to move remaining jobs to another Lucent site within a 35-mile radius and mothball the entire North Andover facility.
Joe Kanan, president of Local 1365, which along with CWA Local 1366 represents about 2,300 workers at the North Andover plant, said Lucent "wants to fulfill their lifelong dream of doing away with all manufacturing." It would follow other telecommunications giants like Cisco Systems, which outsources manufacturing and focuses on designing, testing and selling networking equipment.
"Truthfully, I don't think anyone could stop them from doing what Wall Street is driving them to do right now," Kanan said. "They have to do drastic stuff."
Marcie Vincent, president of Local 1366, which represents clerical workers and draftspeople, said, "It's very frustrating. People are on edge. They perceive that the union leaders must have more information than we really have. People just want to know what's going to happen, and when it's going to happen to them. They just want to get on with their lives."
The waiting is especially tough because after the departure of people with enough age and seniority to qualify for a sweetened pensions, a large fraction of workers at the Valley Works plant are people in their 40s and early 50s who joined the company during a big hiring wave in 1979, 1980, and 1981 -- an especially hard age to go back on the job market.
Last month, when Lucent reported a larger than expected US$3.25 billion quarterly loss, it said it would cut another 15,000 to 20,000 employees beyond the 18,000 who have left the company so far this year through layoffs and early retirement packages. They include over 1,500 jobs throughout Massachsusetts.
But with the telecom spending boom of the late 1990s abruptly drying up, Lucent employees across the state are suddenly finding that having a job with what was long called the world's biggest maker of telecommunications equipment is falling far short of a lifetime job guarantee. Lucent stock options and 401(K) stock holdings that rocketed up by 500 to 700 percent after AT&T spun off the company in October 1996 have given back all of those gains, and more.
At North Andover, one husband-and-wife pair of workers is legendary for having lost nearly US$1 million on Lucent stock holdings they built up with thousands of hours of overtime work.
"We're sitting around waiting for the gauntlet to fall," said one Lucent employee who works at a site down Interstate 495 from North Andover and asked that neither his name nor workplace location be identified.
Vacant cubicles
Close to every other cubicle in his office is vacant these days, and the companywide cost-cutting orders have begun having an impact. A filter on the faucet replaced regular deliveries of bottled water. Employees are starting to have their cellphones taken back. Web-based training sessions are replacing company trips to seminar sites.
"It's a lot easier to park here these days -- that's one of the running jokes," said the employee, adding that the consensus view is that "it's going to get worse before it gets better."
Just Wednesday, another shoe dropped for Lucent when Moody's Investors Services cut Lucent's debt rating by two more notches. Moody's and Standard & Poor's Corp. lowered Lucent to "junk bond" status in June, and have continued to lower its ratings as its financial woes -- and the risk it would default on bonds -- have mounted. Lucent shares dropped US$0.60 cents Wednesday to US$6.10, continuing an 85 percent slide from their peak prices last year.
Documents for buyers
Mary Ward, a Lucent spokeswoman, said the company's vice president of manufacturing, Michael Jones, and other executives are in the process of putting together a sort of offering document for prospective buyers of the Merrimack Valley plant, describing both what Lucent expects it would need from a contract manufacturer and the technical capabilities of the plant staff, who have won numerous manufacturing quality and workplace-safety awards in recent years.
While Lucent has envisioned that many workers would continue to do more or less their current jobs and only see a different company name on their paychecks, Ward said at this point, Lucent can only say, "That's the hope."
Kenneth A. Galdston, an adviser to the Merrimack Valley Project, a coalition of local churches, unions, and other groups that is looking for ways to help Lucent workers, said one great fear is that unionized workers now making US$40,000 and more from Lucent might be paid much less by a non-union contract manufacturer replacing Lucent.
"This whole process, the hollowing-out of the corporation, makes sense from a business point of view, but from a human point of view, it's breaking down a social compact," said Galdston. "Around the country you see a lot of these efforts to unravel a unionized work force, with high-tech jobs that are being turned into temporary jobs."
US Representative John Tierney, a Massachusetts Democrat whose district includes the North Andover site, said he has been lobbying Lucent executives to try to keep work in the local economy.
"If they're in a precarious financial situation where they have to sell, we would like as firm an agreement as possible with the purchaser to keep the current employees working where they are," Tierney said. "We'd like them to open up and be a little more straightforward and forthcoming about what their plans are, but I'm not sure whether they can be. I'm not sure they know themselves."
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