The Western Electric North Andover Demise

Published: 06/13/2007

Lucent to pull last of employees out of Osgood Street plant

By Bill Kirk Business Editor

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NORTH ANDOVER - It started in 1956 as Western Electric and became the region's largest employer with some 12,000 people reporting to work there every day.

Next year, it will be gone.

The company, now known as Alcatel-Lucent, told its remaining 475 employees at the sprawling Osgood Street plant the company plans to leave North Andover in 2008. About 280 employees will lose their jobs, while 190 will be transferred to other Alcatel-Lucent facilities in Massachusetts, said company spokeswoman Mary Ward.

"Clearly, these are difficult, but necessary, decisions," Ward said. "We recognize the impact this will have on our employees, and we are committed to treating them with the respect and dignity they deserve throughout this process."

Ward said details of the closing still need to be worked out with the employee's union, the Communications Workers of America Local 1365. Union president Gary Nilsson vows to fight the company's plans, though he admits that trying to keep jobs in North Andover may be a losing battle - a "long shot at best," as he called it.

"We're going to do everything we can to keep the U.S. operations going, to keep the work here in North Andover," he said. "You try to stay optimistic, that it isn't over until it's over."

Some workers, however, are resigned to the fact that they will be without jobs soon. Many have been expecting it for some time, and were not overly surprised to hear the company's announcement that it wants to close the North Andover plant, Nilsson said.

"We've been walking on eggshells for the last four years," he said.

The 1600 Osgood St. plant, which sits on 169 acres, was sold to a group of investors in 2003 for $16.86 million. Now known as Osgood Landing, the sprawling plant is slated to be turned into a massive housing and retail project.

"We kind of had a feeling something might happen," said technician Paul Chastney. "They've been on the fence for a while.

"They said the cost of doing business in Italy and Mexico is cheaper," Chastney said.

Western Electric opened the Merrimack Valley Works plant in 1956 to manufacture coils for voice communications. It became part of AT&T in 1984, and was renamed Lucent Technologies after a 1995 company restructuring. It became Alcatel-Lucent in a merger last December, now producing equipment to relay data through optical fiber networks.

Throughout the past 50 years, the building at 1600 Osgood St. has employed generations of Merrimack Valley families. Some 12,000 workers were there in the early 1980s, but that workforce was reduced to about 6,250 in 1995. In 2001, the company announced it would reduce its workforce to about 700 to 800, a reduction of close to 90 percent of the jobs at the plant.

Nilsson said he plans to get his union members the best deals he can, possibly including full pensions and lump sum payments of up to $100,000. The union will also do what it can to help members find new jobs, though there aren't a lot of good manufacturing jobs left out there, Nilsson noted.

"The prospects, even with training and education, is slim at best," he said. "You can train someone to be a rocket scientist, but if there's no rocket to build in this country anymore, where do you go?"

Ward said the move is a result of the merger in December 2006 with Paris-based Alcatel, and that the company is taking the necessary steps to deal with "excess manufacturing capacity."

Staff writer Jessica Benson contributed to this report.

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Published: 06/13/2007

The rise and fall of the Valley's once largest employer

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The history

1953 - Western Electric buys 157 acres of farmland adjacent to Route 125 in North Andover and breaks ground on the state-of-the-art manufacturing plant.

1956 - The company moves from Haverhill to its new Osgood Street location.

1981-1983 - More than 12,000 workers are employed at the Merrimack Valley facility.

1984 - A U.S. District Court ruling breaks up the Bell system, and Western Electric becomes part of AT&T.

1995 - AT&T announces it will split into three new companies in what becomes the largest corporate break-up in U.S. history. The North Andover plant becomes part of Lucent Technologies, employing 6,250 at the site.

April 2000 - Lucent begins laying off workers as the telecommunications sector slumps. More than 5,000 workers are still employed in the Merrimack Valley facility at the end of the year.

July 2001 - Lucent announces it will reduce its Merrimack Valley head count to between 700 and 800 by year's end and puts the facility up for sale. The company tells stockholders it lost $3.25 billion and must lay off between 15,000 and 20,000 more workers.

March 2002 - Lucent sells its manufacturing line to contractor Solectron, which sets up an A-Plus Manufacturing subsidiary in the Lucent building. Solectron hires 400 Lucent manufacturing workers for its manufacturing operation. The deal is dissolved a year later.

September 2003 - Osgood St. LLC buys Merrimack Valley Works for $16.86 million with plans to turn it into housing and retail.

December 2004 - By the end of the year, Lucent employs a total of 31,500 workers worldwide, a 75 percent reduction over the course of three years. In Merrimack Valley, the job losses are even more severe, with a 90 percent reduction in staff - from 5,000 employed there in 2000 to 600 in December.

December 2006 - Lucent merges with Paris-based Alcatel.

June 11, 2007 - The remaining 475 employees left at the plant are told it would close in 2008.

BOX 2: The stocks

1996 - Lucent Technologies stock goes public at $7.97 per share. A 500-share purchase is worth $4,000.

1998 - In April, with shares of Lucent stock selling for $132 per share, the company executes its first two-for-one stock split. That initial 500 shares are now equal to 1,000, and the investment is worth $33,000.

1999 - On April 5, Lucent executes its second two-for-one stock split. The initial investment, now 2,000 shares, is worth $111,750 on paper. On Dec. 2, Lucent stock closes at $81.75. The 2,000-share investment is worth $163,500. But now, the stock begins its descent.

October 2002 - Shares of Lucent stock close at 58 cents per share on Oct. 11. The 2,000-share investment is worth $1,160. On paper, stockholders take a nearly $162,000 hit.

January 31, 2006 - The stock closes at $2.67 for the month; that initial investment is now worth $5,340.

Yesterday - Alcatel-Lucent stock closes at $13.10 a share. That initial investment is back up to $26,200.