Lucent Retirees Ask Questions

A group of retirees from Lucent Technologies Inc. (NYSE: LU) is taking on execs at their alma mater, asking questions about the company's policies. Whether they can change anything is open to question, but they are determined to make their voices heard.

In a call with Light Reading earlier this week, Ken Raschke, president of Lucent Retirees Organization (LRO), who headed a North Carolina telecom gear manufacturing plant for AT&T Network Systems before retiring in 1989, explained the charter of the recently formed group.

"When we started last year, it was a few loyal guys who'd had good careers at Lucent and were looking for ways to help," he says. He and the other founding members wanted to use their knowledge of Lucent, its customers, and the telecom industry in general to help the company weather the telecom downturn -- promoting Lucent's cause at standards groups, for instance.

But as Lucent started cutting benefits to former employees while maintaining top salaries for executives, things changed. Now, the group is looking not just to help Lucent's cause, but to change its policies to fairer ones.

A particular bone of contention for the LRO has been Lucent's cancellation this past February of a spousal death benefit for former employees. Limited to management employees who retired before 1998, the benefit extended one year's salary (at retirement date level) to the spouse of a deceased retiree.

Some might disparage objections to Lucent's cancellation of the death benefit. After all, these retirees already have better benefits than many present Lucent employees -- let alone employees who've had the misfortune to be laid off in the last two years.

But losing the death benefit, says LRO, is just one indication that Lucent could axe a range of other benefits in its struggle to lower expenses. As retirees age and feel more vulnerable, it's tough to ask them to worry about losing what they thought they'd worked hard to get.

Ask Joseph Conder. When he retired in 1985, he considered himself fortunate. After starting work at Southern Bell in 1947, he'd followed through a string of acquisitions and mergers to end up at AT&T Corp. (NYSE: T), from which his division eventually went to Lucent. At retirement, he got a pension and benefits that included free healthcare and subsidized toll calls, as well as the spousal death benefit.

Cancellation of the death benefit changed his view of the company. "Now, I think they'd take my pension if they could," Conder says.

Conder knows he's got better benefits than many younger employees, thanks in part to being grandfathered in on perks awarded as he migrated through the Bell System companies that wound up inside Lucent. But he says he was promised his death benefit for years, even as he opted to stick with his company through merger after merger. Since he wasn't a member of a union, he relied on the company's word. "After the divestiture of AT&T, I had letters and confirmation. They had the money allocated for my retirement," he says. And for Conder, part of that money was his death benefit.

Conder, it should be noted, isn't an LRO member, but contacted Light Reading on his own when the death benefit was pulled.

Other retirees feel betrayed by the company they helped build, say LRO officers. At their own expense, they started the Website and traveled to New Jersey this month to meet with Lucent CEO Patricia Russo, ex-CEO Henry Schacht, and several other execs.

Besides Raschke, LRO's founders include its vice president, Eli Shaff, who retired in 1996 from GTE's sales operation in Texas; treasurer Bob Janish, who retired in 1995 after holding a range of accounting positions, the last one at AT&T Network Systems; and secretary James P. Goodman, who retired from Lucent in 2000, after a number of sales posts. Goodman has subsequently been involved with a range of companies, including Aerie Networks Inc. and Optical Access Inc. (Nasdaq: OPXS).

Raschke feels the meeting went well. "We were supposed to meet from four to six," he says, "but didn't break up until after seven because Pat [Russo] had to get to another meeting." The Lucent execs told the LRO team they'd consider some of their suggestions, such as the possiblity of taking input from retirees in making financial decisions. But no promises were made. And Raschke acknowledges that the numbers the Lucent folk showed LRO weren't encouraging of further support for the retirees.

Lucent spokespeople answered the questions the LRO team brought to the meeting in detail, and the answers are published on LRO's site. Lucent spokeswoman Mary Lou Ambrus says the LRO/Lucent meeting has resulted in some "good dialogue." Nothing specific has emerged, though.

Raschke and the other LROers aren't stopping their campaign. They've joined the National Retiree Legislative Network (NRLN), which includes groups representing ex-workers from IBM Corp. (NYSE: IBM), Qwest Communications International Inc. (NYSE: Q), and Verizon Communications Inc. (NYSE: VZ), to name a few. The NRLN's Website states: "We can help anyone with a burning desire to keep predatory executives from running through your pension money or taking away promised healthcare benefits."

Raschke stops short of pointing fingers at Lucent execs. "It's a societal problem, not just a Lucent one. The real story is what's happening in America. Your kids and grandkids will suffer in retirement," he says. A two-class society, in which some get and others don't, is a regrettable legacy, he believes.

— Mary Jander, Senior Editor, Light Reading

Page 1 / 2   >   >>
Optic_Dude 12/5/2012 | 12:10:09 AM
re: Lucent Retirees Ask Questions The only reason these “retirees” care is because it affects THEIR pension. What about all of the employees that lost their jobs and their careers at Lucent and yet none of this is mentioned? And they are whining about some stupid death benefit? Give me a break. I cannot think of a more greedy and selfish bunch of individuals. They are just jealous that they are no longer part of the executive team getting fat perks while former Lucent employees are filing unemployment claims. LRO, you are part of the reason that Lucent had to shed 90,000 employees because of your incompetence. Lucent should take back all of your pensions and see how reality feels. I am not an employee of Lucent but have many friends that were affected and articles like this make me sick.

skeptic 12/5/2012 | 12:10:08 AM
re: Lucent Retirees Ask Questions They are just jealous that they are no longer part of the executive team getting fat perks while former Lucent employees are filing unemployment claims. LRO, you are part of the reason that Lucent had to shed 90,000 employees because of your incompetence.
These people didn't create the problem. These
are a bunch of people who retired a long time
ago in many cases. They are not responsible
for the damage done at Lucent. The people
who did the damage at Lucent have been endlessly
rewarded. Look at Carley. Her qualification to
run HP was being a high-profile member of the
team that drove Lucent into the ground. The
rest of the gang took whatever they could grab
before it all fell in them.

And I can tell you that if Lucent cuts retiree
benefits, they will not use that money to save
one job or help any current employee.
firstmile 12/5/2012 | 12:10:07 AM
re: Lucent Retirees Ask Questions I am in violent agreement with the two previous postings.
We are seeing free market economics at work.
LRO should worry about their "discounted toll call" benifits too, or go back and do something to help the company recover. In the abscence of having the capability and the opportunity to go back, then you have to give back.
skeptic 12/5/2012 | 12:10:06 AM
re: Lucent Retirees Ask Questions A free market requires that promises made by
a company *mean* something. Whatever trouble
Lucent is in, it has an obligation to keep
the promises it made to those who retired.

Stealing from retired people isn't going to
fix whats wrong with Lucent. Whats wrong
with Lucent is bad products and bad management.
Gimmicks like cutting retirement benefits
just distract from the real problems at Lucent
that need to be solved.
firstmile 12/5/2012 | 12:10:05 AM
re: Lucent Retirees Ask Questions I'm not a pro Lu person. If they are not making intelligent cuts across the board then you are right. I don't have the time to investigate their books, and I'm not a shareholder so I don't really care.
If this Russo is doing a stunt like Carty (AA) did a week or so ago than she and her colleagues deserve the same fate.
In terms of the free market, I believe that if the benefits look to good to be true, then they are too good to be true. And it's just a matter of time before the "market" determines that they are too good to be true. If it is poor and greedy management decisions then we are not talking about free market economics.
rjmcmahon 12/5/2012 | 12:10:05 AM
re: Lucent Retirees Ask Questions It's worth noting that Lockheed retirees seem to be doing just fine. Military warplanes seem to have been the strategic career choice. Sad statement about our national priorities :-(

PS. Let's hope the nuclear scientists don't start complaining about their retirment benefits.

PSS. The baby boomers won't only complain, they'll act out. Watch your wallets folks. Ahead of us is one of the largest healthcare boondoggle's one could ever imagine. If HealthSouth couldn't build a sustainable model servicing the existing market, how the hell will a governemnt subsidized, prescription placebo, program service the health demands? And unfortunately, Pfizer's plans may only produce placebos which merely numbs their brains into buying more Wall St. equities (or worse, REITs).

Nov. 2004 will be an interesting election. It will reveal much about the state of our national conscience.
porn starr 12/5/2012 | 12:10:04 AM
re: Lucent Retirees Ask Questions Are we talking about an equipment maker or a social services agency here?

Their pension benefits are PBGC guaranteed, and they're still going to draw from social security while it's solvent. Yeah, McGinn, Fiorina, & co were incompetent, but any executive who can turn this company around deserves a big payout.

rjmcmahon 12/5/2012 | 12:10:04 AM
re: Lucent Retirees Ask Questions Whatever trouble Lucent is in, it has an obligation to keep the promises it made to those who retired.

Lucent is dying. Unfortunately for too many, a dying entity can't meet it's hopes and its promises when there is nobody left around who cares about it. Why doesn't anybody care remains the question in my mind.

PS. Vultures moving in, and picking the retirements off the carcass, is just another reason why no intelligent life forms will be contacting our species. We can turn SETI off for awhile and save the electricity for a better day.
Snape 12/5/2012 | 12:10:03 AM
re: Lucent Retirees Ask Questions "...but any executive who can turn this company around deserves a big payout."

Never happen. Not without spilling some serious blood.

Lucent is a hot air balloon with a big hole in it. You can pump all the hot air you want in it, it's still going down.

Simple fact remains that their competition has made such a series of mistakes and are in a position to profit when the carriers start buying again.

Lucent has killed too many bodies to even gain parity.

If the retirees are lucky, they still will have a pension when all is said and done.

Severence comes out of the retirement plan, as is the hard cash when the FMPed roll it away from mother Lucent.

It's gonna be a train wreck.

skeptic 12/5/2012 | 12:10:01 AM
re: Lucent Retirees Ask Questions Are we talking about an equipment maker or a social services agency here?
I guess I didn't understand. Retired workers
are not really entitled to the same sort of
protections that creditors or banks or
suppliers are. You can lie or steal from
them at will and its "just business".

And if they complain, have the government print
some more "free money" in the form of deficit
spending to fix the problem.

Page 1 / 2   >   >>
Sign In