Lucent Contract Provides for 18.7% Wage Increase

The tentative contract agreement reached between Lucent Technologies Inc. and its two biggest unions provides an 18.7% wage increase over five years and resolves health-care and other issues that led to a brief strike.

The Communications Workers of America and the International Brotherhood of Electrical Workers called off their strike against one of the world’s top makers of phone equipment after two hours early Monday morning. The unions, which represent 44,000 workers, or a third of Lucent’s work force, will vote on the contract in coming weeks. Local units continued to negotiate with a Saturday deadline.

A drawn-out strike would have come at a critical time for Murray Hill, N.J.-based Lucent, whose shares have soared with demand for its wireless equipment and devices that carry data and Internet traffic. Lucent and rivals Cisco Systems Inc. and Northern Telecom Ltd. are competing to supply products for the fast-growing data communications market.

“It’s crucial that they didn’t disrupt customer shipments,” said James Parmelee, an analyst at Deutsche Morgan Grenfell, who rates Lucent a “buy.” “A prolonged work stoppage would probably have led to market gains by competitors.”

Lucent shares fell $2 to $68.94 on the New York Stock Exchange. Lucent has surged more than fourfold since its initial public offering in April 1996. Lucent’s spinoff from AT&T; Corp. was completed that September.

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