France Telecom talks with unions on suicide spate

* Management adopts conciliatory tone-union

* New deputy CEO Richard in the spotlight

* Unions want to end “policing” of staff, performance grades

PARIS, Oct 7 (Reuters) - France Telecom FTE.PA on Wednesday began a second day of negotiations with unions on ways to reduce workplace stress blamed by labour leaders for a spate of suicides at Europe's third biggest telecoms company.

The talks, which are expected to continue for several weeks, are part of France Telecom’s effort to calm the political firestorm surrounding the deaths of 24 workers in the past 18 months.

As sporadic strikes continued at sites across France, Labour unions said management was more conciliatory on the first day of talks, although points of contention remained, such as performance reviews and controls on call centre workers.

“There has been a real change in tone that we can only be pleased about,” said Christian Pigeon, a representative of SUD labour union.

Analysts are closely watching the negotiations to gauge if concessions by management will impact the group’s restructuring and cost-cutting drive.

France Telecom has promised to reduce costs over the next two years by 1.7 billion euros ($2.50 billion), an effort that will go a long way to determine whether it can reach its free cash flow target of 8 billion euros a year. [ID:nLU249761]

Shares in France Telecom were trading mostly flat on Wednesday morning, in line with the CAC 40 index .FCHI but outperforming a 0.7 percent lower DJ telecoms index .SXKP.

At the opening of the talks on Monday, Chief Executive Didier Lombard promised “a new social contract” and pledged to make employee well-being a priority.

Freshly-named deputy CEO Stephane Richard, who has been handed the task of calming the storm over the suicides and is seen as a successor to Lombard, was also taking part in the negotiations. [ID:nL5641954]

The government, which is France Telecom’s biggest shareholder with 27 percent of shares, has also been closely involved in trying to manage the fallout from the suicides.

To better understand workers’ concerns, “all employees will receive a questionnaire on stress in the workplace” on October 19, said Lombard.

Christian Mathorel, a CGT union representative, was not convinced that management would deliver on its pledges. CGT wants the company to stop monitoring employees’ calls, measuring individual performance and giving managers headcount reduction targets.

“We think the employees are still in danger,” he said. “If we don’t address the fundamental causes behind these dramatic incidents, we will be negotiating in fear of new suicides.” ($1=.6802 Euro) (Reporting by Leila Abboud and Marie Mawad; Editing by David Cowell)