Employees Will Miss The Exciting Work At Telecom - Many Who Don't Transfer May Find Jobs Here Easily

Employees will miss the exciting work at Telecom

Many who don't transfer may find jobs here easily

By PAUL JUDGE

NEWS STAFF REPORTER

AUG 20 1989

John Gajowiak’s parting shot had none of the bitterness customarily heard from employees who have recently been told they may soon be out of a job.

“We did pretty exciting work here,” said Gajowiak, a 40-year-old software developer and one of the 200 Northern Telecom Inc, researchers who learned last week that their jobs are on the line. “The pay and benefits were good, but it’s the work I’ll miss most. Somehow, the jobs I picture myself doing after this seem pretty boring.”

Northern Telecom’s decision to shut down the BNR research facility on Phoenix Drive south of 1-94 removes one of the most advanced high-tech research-and-development labs in the area.

It goes to show that Ann Arbor, which has amassed an enviable record for attracting and spawning high-tech companies, is as vulnerable as any other place when corporate cost-cutting dictates shutdowns and job cuts.

Gajowiak’s lament was echoed by fellow workers who say they will miss the excitement of being part of an ambitious team at the leading-edge of computer data networking technology.

The company has not yet set a date for its pullout, which it said could take up to sixth months.

But if the imminent closure of BNR has employees disappointed and anxious about their next step, it could prove to be a lucky strike for other local firms trolling for high-tech talent in Ann Arbor’s crowded labor pool.

“It will dump some very talented people on the street,” predicted William W. Cassell, executive director of the Ann Arbor-based Michigan Technology Council. “That’s sort of the history of Ann Arbor. Many of the small high-tech startups have been spawned as a result of people who spill out of a company closing down. It’s an unfortunate route, but it’s fairly characteristic.”

BNR employees here have been working on a system of computer-guided switches and telephone transmission equipment capable of moving large amounts of data in and out of computers. Their task is to come up with sophisticated tools to ensure that data is clear and clean enough to survive the trip on public telephone networks unmarred.

Executives say the research generated excitement within Northern Telecom because of the explosive growth in data transmission over private networks.

Nashville-based Northern Telecom, which is the U.S. subsidiary of the giant Canadian telephone equipment maker, has urged its research executives to scout for talent among the 200 computer hardware and software specialists here.

“The transmission and handling of data is going to be a key capability of all our product lines,” said Thom Hill, a spokesman for the company, “and Ann Arbor has a concentration of Northern Telecom’s data networking expertise.

Northern Telecom has given no clear indication how many employees it can absorb in Ottawa, Quebec, North Carolina and the Dallas suburb where the company is consolidating its R&D on data networks.

In the coming months, employees given the option will be weighing offers to move to other parts of Northern Telecom’s far-flung corporation against taking their chances that a job will turn up with a local high-tech employer.

It promises to be a true test of loyalties.

Many local BNR employees were recruited from the University of Michigan and have put down roots here in the 11 years since Northern Telecom bought Sycor Inc. Several said they would like to stay in Ann Arbor.

“One of our biggest recruiting advantages over the years has been that we’re attractive to Michiganders who wanted to move back here from California and Oregon,” acknowledged Patricia Webb, director of human resources at the BNR facility.

James Houck, a program manager with the Governor’s Office of Job Training, said skilled researchers and technicians should not have much trouble finding new jobs, given Ann Arbor’s vital labor market.

“But no matter who you are, it’s still a shock and a trauma to hear that you’re out of a job,” he said.

BNR workers who talked to The News last week gave the company high marks for the way it has handled the shutdown. Seminars in resume writing and job hunting are intended to usher into the market those employees who aren’t offered jobs elsewhere with Northern Telecom.

“I haven’t seen too much resentment,” said Richard Merrill, 35, who moved to Ann Arbor three years ago to take a job with the company testing computer hardware. Northern Telecom’s plans to close the BNR facility here “is a sign of the times,” Merrill said. “The same thing happened in my job before this. It’s getting to be a regular thing.”

Layoffs and plant closings are getting to be a regular thing for Northern Telecom employees.

1988 was one of company’s worst years ever. Profits declined 50 percent, to $165.6 million, on a 10 percent gain in sales, to $5.4 billion. The slump comes at a critical time in the telephone equipment business, when global consolidation is forcing a showdown among the major players.

Charged with showing profits in a hurry, Northern Telecom’s new chief executive, Paul G. Stern, has adopted austerity measures to clamp down on the company’s costs. Closing down the Ann Arbor lab is only the latest move, a casualty of Stern’s drive to hold R&D spending flat at about $700 million a year, compared with a 21 percent rise in 1988.

The company has closed a number of plants, and trimmed 75 jobs from the company’s Ann Arbor Memory Systems division, where 230 employees assemble high-capacity magnetic disk drives that store large amounts of computer data. Stern has also limited capital spending, travel and administrative expenses to half of Northern Telecom’s sales growth.

While the process has been painful for the company’s 40,000 employees in the United States and Canada, corporate fortunes have improved, with better-than-expected earnings in the first half of 1989, a surge in new orders and a 40 percent rise in the company’s stock since Stern took over late last year.

Northern Telecom will continue to manufacture computer data storage disk drives at its Ann Arbor facility, which is connected to the BNR building at Phoenix Drive.

But executives acknowledge an uncertain future for the Memory Systems Division, headquartered here, at a time when Northern Telecom’s resources are being poured into its core businesses — making telephone equipment.

“The future of Memory Systems Division has to be considered in light of the changing circumstances,” said spokesman Hill. “It is a good business and does have a strategic fit in our business plan. But that plan is evolving all the time.”

'The pay and benefits were good, but it's the work I'll miss most/ says John Gajowiak.