Alcatel ditches its fabs

Needs to save money

Alcatel has said it will sell 108 of its 120 manufacturing plants in order to save on costs. The chairman of the French telecoms manufacturer Serge Tchuruk told the Wall Street Journal he expects the company to ditch the remaining fabs in the near future.

Earlier in the day, Tchruruk had espoused the virtues of outsourcing, saying that it was a great way to cut costs and make you more flexible. That's as maybe but Alcatel is not exactly fighting fit at the moment.

Two weeks ago it decided to sell off its ADSL business to Thomson Multimedia. It said it wanted to concentrate on infrastructure products - which was precisely the stance that screwed up its merger with Lucent in May. Since that collapse, both companies have been in it up to their necks.

Recently, Alcatel said it was getting rid of 900 jobs. Two years before that it fired 12,000.

The fabs will be sold to other manufacturers, who will continue to make Alcatel goods but with others alongside. Tchuruk also suggested he may sell minor shares in other companies, including Vivendi and Societe Generale. ®

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