Subject: Lucent Bargaining Update #21 (Correction)

(Original sent 11-02-02)

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With sincere regret we must inform our membership and

the approximately 86,000 Lucent retirees that despite

an extraordinary effort by the bargaining teams we

were unable to reach a new two-year agreement with

Lucent.

Talks ended at 5:30 am this morning. Bargaining on

the National issues went on all day yesterday and last

night. We had agreed to extend negotiations by one

day, and exceeded that in an effort to help Lucent

survive without a cut in wages or out of pocket premiums

for health care.

Despite the rosy picture painted by Lucent CEO, Pat

Russo, make no mistake, Lucent is in trouble. With

the state of the economy Lucent's traditional customers

have slowed down or stopped spending any capital on

their networks. While Lucent claims to have $2 billion

in cash on hand they are burning it at a rate that

far exceeds projected earnings.

Lucent's on roll occupational represented population

is approximately 6,100. The total number of represented

occupational retirees is approximately 86,000. The

cost for retiree health care is rising. Costs this

year were in excess of $550 Million and are projected

to exceed that in the coming years.

CWA agreed to bargain early for two reasons, to help

Lucent avoid disaster and to protect retiree health

care. When the decision was made we told you there

would be necessary hardships associated as a result

of our willingness to help preserve retiree health

and maintain current working conditions. The process

that the bargainers were faced with cannot be described.

They laid aside traditional positions and faced with

reality gave all they could. The Union proposed ad

hoc pension increases along with the elimination of

the two lowest pension bands. In addition we proposed

increases in the termination schedules as well as modest

wage increases for the active employees. We presented

many new concepts that may have allowed the Union to

reach agreement but because of philosophical differences

and no funding, other than benefit plan cuts; we could

not reach a tentative agreement worthy of those who

built this once proud company.

After much hard work and creativeness we achieved cost

sharing of $40 million a year over the life of a two-year

agreement but still that was not enough for Lucent.

This was accomplished by a number of initiatives involving

prescription drug costs, pharmacy network plan changes,

Indemnity Plan savings, co-pays and restructuring mental

health/chemical dependency allotted visits. The bargainers

scrutinized nearly every health care benefit plan and

other benefits that our members and retirees enjoy

as a result of the collective bargaining process in

an attempt to reach an agreement. When we needed more

we looked at other savings by shifting funding for

Alliance, ERC's, Academic Awards and Family Care Development.

All of this was done with an eye on what we believe

would cause the least amount of disruption recognizing

the average pension today is approximately $930 a

month with approximately 14,000 retirees receiving

less than $600 a month.

So there is no misunderstanding Lucent's problem is

real and it will not go away. With a rate of one (1)

active employee per every fifteen (15) retirees, the

ever-rising health care and prescription drug costs

will only continue to escalate. Unfortunately the problem

only worsens as more employees leave roll and add to

the retiree ranks.

The problem simply cannot be addressed unless a major

change in philosophy takes place not only with Lucent,

its employees and retirees, but also with Corporate

America. It is time for Corporate America to rethink

its lackadaisical attitude about the American worker

and its "foreign" is better attitude. It's past time

for Corporate America to stop brushing aside the huge

Health Care and Prescription Drug problem in our country.

The problem could be fixed if they would get involved

in the legislative process but that looks like too

much to hope for.

We were hoping that a less costly agreement would buy

us time. Since that will not be the case we will commence

bargaining next May. The Union and its' members cannot

create a new economy, we cannot create customers nor

unfortunately can we make Lucent's business decisions.

What we can do is provide a highly skilled workforce

that is dedicated to Lucent's customers and their future

and together we have accomplished that.

No one knows what will happen to Lucent in the near

or not so distant future but it is clear next May will

be the most critical time that any former Bell System

bargaining unit has faced. For now all anyone can do

is pray that the economy turns around and Lucent's

customers start spending capital.

We wish to thank the bargaining teams for their dedication,

hard work and loyalty to the members and retirees.

We will be ready in May and it will be up to those

who we represent as to whether we should concern ourselves

with attempting to help again.

In Unity,

Ralph Maly, Vice President

Bob Richhart, Administrative Assistant to VP Maly

Mary Jo Sherman, Staff

Gerald Souder, Staff

Ruth Marriott, Staff

For more information go to http://www.cwa-comtech.org