When eight telecommunications workers walk out of the
Alcatel-Lucent, the troubled telecom giant, will shut down the plant in the middle of next year, lay off the last 250 blue-collar workers, and transfer most production to Italy.
"It's the death of Ma Bell," said Gary Nilsson, president of CWA Local 1365, the largest union at the plant. "Imagine, a French company came in and literally shut down what's left of telephone manufacturing in the US."
Once a mighty employer in the Merrimack Valley, the plant opened 64 years ago as Western Electric, the manufacturing arm of AT&T Corp. The Merrimack Valley Works, as the plant was known, survived the historic AT&T breakup of 1984 and its spinoff to Lucent Technologies 11 years ago.
But it could not survive the $13 billion merger between Alcatel SA, based in Paris, and Lucent Technologies, completed a year ago. The company, which has lost $1 billion in the last year, plans to close the North Andover plant and another former Western Electric facility in Ohio next year, a spokeswoman said.
In the Merrimack Valley, where generations of families toiled in the plant, the closing is a harsh lesson in global economics.
"This isn't how things were supposed to end," said Rick Rizzotti, 48, of Haverhill, a second-generation worker who will leave tomorrow after working there for 28 years. "This was the place everyone wanted to go to work. It was a stable job, with good wages, that you could retire from."
At its peak, the former Merrimack Valley Works plant had 12,000 employees. Workers at the plant earned anywhere from $18 to $27 an hour plus benefits. The plant helped to rewire the world, shipping products to Europe and Asia.
"It was booming," said Rizzotti, who started at the plant just out of high school. "You could get all the overtime you wanted."
But after the telecom bubble burst in 2001, the company, then known as Lucent Technologies, aggressively cut costs, shifting production to other countries, including Canada, and contract manufacturers in the United States. The stock price plummeted, decimating retirement savings plans.
In North Andover, the job cuts were steep and steady, with thousands laid off at a time. Since 2001, employment at the plant has fallen from 5,600 to about 500 today. In 2003, Lucent sold the 2 million-square-foot plant, which sits on 169 acres on the Haverhill line, to Ozzy Properties of Andover for $13.4 million. The company now leases 460,000 square feet of space for manufacturing, offices, and warehouse-distribution.
"It's like a cubbyhole compared to what it was," said Rizzotti, who spent most of his career as a construction and maintenance worker.
"To see all the work leave over the last five or six years has been horrible," he said. "I didn't know from one day to the next whether I'd have a job."
Since 2002, the US Department of Labor has awarded $6.1 million in grant money to retrain laid-off Lucent workers. The money, administered through the state, helped managers and workers find new jobs in healthcare, education, and other growth industries.
"We couldn't have done it without the grants," said Fran LaCerte, a job training counselor at Valley Works Career Center in Haverhill, which is run by the state. "The change there just came so rapidly."
Local 1365 last week filed a petition with the state Department of Labor and Workforce Development to have the plant certified for trade adjustment assistance, which provides additional training and benefits for workers who lose their jobs because of foreign competition.
"We believe having American manufacturing jobs sent to Italy should qualify us," said Nilsson, 52, the union president who is also a second-generation Lucent worker.
The union also negotiated with Alcatel-Lucent to extend an agreement, first reached in 2001, to give extra pay, benefits, training, and five additional years of service to the remaining blue-collar workers at the plant, Nilsson said.
Once the first round of workers leaves tomorrow, other layoffs will be phased in gradually over the next several months. About 250 full-time workers, plus 40 temporary workers also represented by the union, will be let go. A total of 190 management jobs will move to an Alcatel-Lucent facility in Westford.
Mary Ward, a spokeswoman for the company's North American headquarters in Murray Hill, N.J., said some managers could be offered severance packages.
"We do recognize that this has an impact on our employees," she said. "We're trying to work with everyone involved to ease the transition."
The North Andover plant, which originally manufactured coils for telephones, now makes fiber-optic networking equipment for telephone, cable television, Internet, and other telecom sectors. The company said it needed to cut costs by $6.6 million annually from the site, according to information provided to both union and state economic development officials.
After losing $258 million in the third quarter, its third straight quarterly loss, Alcatel-Lucent announced in October it would cut 4,000 jobs worldwide and streamline production. "We are in a very competitive, difficult market," Ward said. "We need to get our costs down if we are going to be a viable company in the long run."
After the closing was announced, Local 1365 submitted a counterproposal in an attempt to save the plant. The package totaled $34.5 million in savings over the next several years, including a mix of job freezes and wages for both union and management, among other cost-cutting measures, according to Nilsson.
"That wasn't good enough for them," Nilsson said. "They wanted to close us all along so that they could outsource our jobs."
The state also offered a tax incentive for Alcatel-Lucent to expand the plant. But neither the union's plan nor the state's offer addressed the company's desire to reduce manufacturing space, Ward said.
"We concluded that it was in the best interest of the company to proceed with a plan to close the plant," she said.
The decision has left workers with a mix of anger and sadness.
"It used to be so busy, with so many people and products," said Rizzotti, who once had 15 extended family members working at the plant. "Now you look around and it's just an empty building. . . . It's sickening."
Rizzotti will start to collect a monthly pension check of about $1,500. He'll receive healthcare benefits but can't afford to stop working. He plans to work as a carpenter, the trade he learned in high school.
"I want to get out and do something I enjoy for a change," said Rizzotti, a divorced father of two sons, ages 21 and 17.
"For the last six years, I didn't know if I'd have a job tomorrow," he said. "I don't want the headache of working for a big company."
Kathy McCabe can be reached at firstname.lastname@example.org.