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back to article Alcatel Lucent battles unions in bid to slash 5,500 jobs

Ailing telecoms kit maker Alcatel Lucent is facing a typically robust response from French unions as it tries to slash costs, and over 5,000 jobs, in a bid to compete better - especially against low-cost rivals from China. The firm first announced plans to cut more than six per cent from its 78,000 strong global workforce back …

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Globalisation

So the USA has trumped up a non-tarrif trade barrier. That leaves Europe as a market. So Europe will need a barrier, dumping looks like a convenient hook to hang it on.

I suspect that if the 80s & 90s were the era of GATT, globalisation, & the free marketr, the teens & twenties will be the reversal.

Once things are obvious enough that you can hit politicians over the head with them, things change.

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Re: Globalisation

Once things are obvious enough that you can hit politicians over the head with them, things change.

Actually, a while after that. Politicians have thick skulls.

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Devil

Re: Globalisation

that's why you have to hit them at least twice....and then again for good measure to make sure they get the message.

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Let's not forget

What happened the last time round when countries started erecting trade barriers.

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Trollface

Re: the last time round when countries started erecting trade barriers

That's the opium trade performed by British East India Company you meant, didn't you?

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Facepalm

can't give them away?

I smell a marketing plan here.

The US allows A-L give away their products free to save the free world from Huawei and LZE.

All producers go bust, but at least the free world is saved.

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Trade barriers are a bad idea...

...but Huawei and ZTE both use low cost pricing options.

There was a multi-million dollar optical network in Eastern Europe earlier this year that was decided on an electronic auction. Basically all the bidders drop their prices until there is only one left.

The "normal" companies all dropped out when it dropped to their floor prices, leaving Huawei and ZTE competing with each other.

Huwaei bid one cent (I think the auction was priced in US Dollars or Euros), and ZTE went crazy trying to enter a zero bid - but the system kept saying it was an error.

ZTE legally challenged the Huawei win because they said they would have bid lower if the system would have allowed it. In fact they would have bid a negative number if the system would allow it.

Why do these companies do this crazy stuff? Three reasons:

- Several years ago the bank of China gave billions of dollars in loans for Huawei and ZTE to "Go out and win international business". http://www.bloomberg.com/news/2011-04-25/huawei-counts-on-30-billion-china-credit-to-open-doors-in-brazil-mexico.html

- Huawei and ZTE are trying to obtain dominant market positions becaus they think in the long term - whereas US companies think 90 days at a time. They are prepared to take short term losses in order to make long term gains.

- Once a customer is locked into a Huawei or ZTE network they often find that long term costs are prohibitive. These include expensive service contracts and higher prices on capital equipment after the frame contract has expired. By then it's too late and the decision-makers in the customer don't dare to say anything because they will look really stupid. In the case of BT and Matt Bross it was even better - he went from being the guy at BT who awarded Huawei the 21CN contract to being a CTO at Huawei itself. Nothing unethical there, surely!

So trade barriers are a bad idea. But allowing Chinese companies to dump products in this way is an even worse idea.

Alcatel is paying the price partly because they have chosen to take on Huawei and ZTE in their sweet-spot markets - especially mobile (for Huawei) and local loop (for Huawei and ZTE). Low margin, high volume markets are perfect for heavily subsidised businesses.

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Pint

Re: But allowing Chinese companies to dump products in this way is an even worse idea

You know, if you drop Chinese from this statement it may look good enough to actually legally ban such companies from bidding (when they are government sponsored beyond point of competition being fair to other players).

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