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September 26, 2003
GREENSBORO, N.C. -- Thousands of "outraged and disgusted" Lucent Technologies retirees from across the eastern half of the nation will confront Lucent Board Member Henry Schacht over the next two weeks when he meets with them in eight cities to discuss Lucent recent reductions in retiree benefits.
The president of the Lucent Retirees Organization (LRO) -- formed earlier this year to protect the interests of Lucent's 127,000 retirees -- said its members are "mad as hell" over the company's decisions to no longer reimburse some 50,000 management retirees for Medicare B premiums, eliminate dental coverage, and discontinue healthcare insurance subsidies for many retiree dependents. Earlier this year, Lucent also announced the elimination of a traditional 80-year-old death benefit equal to a year's salary for surviving spouses. Lucent claims the benefit cuts are needed to save the struggling firm some $75 million annually.
Schacht, who chairs Lucent's Pension and Benefits Task Force, will begin his meetings on September 30 in Greensboro, N.C. and Somerset, N.J. Between October 1 and 8, he will conduct meetings in Atlanta, Orlando, Boxborough, Mass., Columbus, Ohio, Naperville, Ill., and Allentown, Penn.
"Because of the elimination of subsidies for dependents, many retirees will see the price of their monthly health insurance premiums for family coverage triple in 2004 -- from $141 to $516," said Ken Raschke of Winston-Salem, national president of the Lucent Retirees Organization.. "It's simply outrageous."
Saying the LRO will battle Lucent in the courts and in the Congress, Raschke and his organization are pushing Congress to enact HR 1322, a House bill that protects retiree health care in the same way ERISA (The Employee Retirement Income Security Act of 1974) protects pensions.
In an open letter to Schacht, Raschke charged Lucent with "losing its moral compass." He said the retired men and women being affected invested three and four decades of their lives building Bell Labs and the other companies that became Lucent Technologies in 1996.
"Lucent executives inflict pain time after time on retirees and their dependents while they continue to pay themselves excessive salaries and maintain their expensive perks while Lucent has failed to make a profit in 13 consecutive quarters.
"During the last three years, senior Lucent executives have ravaged this once-great industry leader," he said. "Lucent has dwindled from a telecom giant with 153,000 employees and $38 billion in revenue in 1999 to a struggling company with 35,000 employees and less than $9 billion in sales today.
"At the same time Lucent has shrunk to 25 percent of its former size, have executive salaries and perks been reduced proportionately by 25 percent? The answer is no," Raschke said. "Lucent executives continue to draw multimillion-dollar salaries, retention bonuses and pensions -- all on the backs of its retirees, without whom there would be no Lucent."
Raschke said retirees are "disgusted with Lucent's brand of corporate leadership, and will not sit idly by while Lucent executives demolish the legacy we built and destroy the pensions and benefits that are rightfully ours."
The LRO's dues-paying membership is rapidly increasing, according to Raschke, which is providing broader retiree input and the funds to challenge Lucent's "attack" on its retired employees. He pointed out that LRO representatives offered volunteer services and proposals on healthcare during two meetings earlier this year with senior Lucent executives at the company's Murray Hill, N.J. headquarters.
"After meeting in good faith, we apparently were headed down a one-way street because Lucent blind-sided us with the latest reductions in benefits to management retirees," Raschke said. "Employees were encouraged to retire -- and indeed made their retirement plans -- with the promise of certain benefits. We are shocked that Lucent would renege on these commitments."
Lucent Technologies Inc.
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