CGE’s Alcatel NV and the Spanish government have reached agreement on the thorny problem of the future of the two former ITT subsidiaries in Spain. Under the agreement, Alcatel will hold on to Standard Electrica SA – but slim it down, while the Spanish government will offer the other, Marconi Espana, to a foreign buyer. L M Ericsson was the first to submit terms for taking over Marconi, primarily a defence contractor, and putting new manufacturing work into it, but now most of the other bidders for CGCT in France are also showing interest in the Spanish company, including Siemens and AT&T-Philips. The restructuring of StandardElectrica will involve a reduction in the workforce to 10,000 from 14,000 over five years, and Alcatel will put up $110m of newcapital for the company, while Compania Telefonica Nacional de Espana, the phone company, will place $235m of new orders with the company and the government will also find $30m to finance research and development at the company.
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