Alcatel Alsthom SA’s Spanish arm Alcatel Sesa has been subject to an almost permanent process of reconversion since 1983, the year in which staff cuts costing a total of $1,172m were begun; of the 15,293 workers employed 13 years ago, only 5,945 now remain, and in June the company announced that a further 1,338 workers will be laid off over the next three years as part of the firm’s viability plan. Union action will almost certainly ensue, El Pais reckons. Alcatel Sesa has also confirmed the closure of two of its factories, those at Arteixo, Galicia and Torrejon, Madrid and will now confine production of switching and access equipment to its plants in Villaverde in Madrid and Toledo. Alcatel Alsthom will support the plans for the Spanish subsidiary with a capital injection of $406.2m. In 1995 Alcatel Sesa’s operating losses totaled $130m, this on top of restructuring and other non-recurrent losses of $102.2m. In 1996 losses are expected to reach some $235m as a result of the collapse of exports to China, cuts in telecommunications equipment prices, a staff surplus and restructuring costs. With mobile telephony cited by corporate president Serge Tchuruk as one of the group’s top priorities, the future of the Malaga plant, which concentrates mainly on the production of analog and Digital European Cordless Telecommunications phones, would appear to be assured. However, Alcatel Sesa’s factory at Arteixo, Galicia, which employs 180, is to be abandoned and will either close or play a part in a new regional government-sponsored venture to produce cable television equipment. The Torrejon plant, which produces transmission equipment, will also close; 300 of the 650 staff employed there will be transferred to Toledo, which will become a key access equipment production centre, and another 200 will be reposted to the company’s main offices in Madrid. One good piece of news for Alcatel Sesa is that president Miguel Canalejo has succeeded in persuading the group to enable the Spanish affiliate to cut its ties with the Brazilian arm, very much a millstone around the Spaniards’ necks, since, despite continuous restructuring efforts, the Brazilian unit has generated losses estimated at no less than $109.4m over the last two years. Alcatel Sesa is confident that, freed of this financial burden and with its streamlined production centers working to capacity, it will be able to return to profit in 1998.
