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Alcatel-Lucent Message Board

  • wall_st_knight_mare wall_st_knight_mare Feb 14, 2013 8:08 PM Flag

    Alcatel-Lucent chairman seeks more time to turn around struggling tech company

    Alcatel-Lucent chairman seeks more time to turn around struggling tech company

    By Bloomberg News
    on February 13, 2013 at 1:30 PM, updated February 13, 2013 at 1:40 PM

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    Alcatel-Lucent's former office complex in Whippany. The telecommunications company now has operations in Murray HillStar-Ledger File Photo

    Alcatel-Lucent SA Chairman Philippe Camus will seek a contract extension in May as the 64-year-old Frenchman looks to have another go at turning around the network equipment maker with the help of a new chief executive officer.

    Alcatel-Lucent spokeswoman Regine Coqueran, in a telephone interview, said Camus’s request to renew his mandate will be included in a document for the Paris-based company’s annual shareholder meeting scheduled for May 7. Chief Executive Officer Ben Verwaayen, whose contract also ends that time, told board members last week that he plans to step down when a succession plan is in place.

    A former head of European Aeronautic, Defence & Space Co., Camus was called in to lead Alcatel-Lucent’s board in 2008 after Patricia Russo and Serge Tchuruk were driven out for failing to turn a profit following the 2006 merger of Alcatel SA and Lucent Technologies.

    As chairman, Camus hired Verwaayen and stood by him even when investor pressure grew to replace the Dutch executive. Splitting his time between France and the U.S., Camus now faces the task of hiring a CEO and catching up with Ericsson AB and Nokia Siemens Networks, European rivals that are winning businesses in North America and improving profitability with job cuts.

    Industry Background

    Camus and the board want a European or American with a background in industry to help Alcatel catch up to rivals as carriers face tighter budgets, a person with knowledge of the matter has said. Alcatel appointed headhunter Russell Reynolds Associates to consider both internal and external candidates.

    Alcatel-Lucent trails Ericsson and Nokia Siemens in profits and is up against Asian competitors, sluggish spending in Europe and rigid job protection in France. Since the merger, the company has accumulated about 10 billion euros ($13 billion) in net losses, while its cash reserve has diminished by 700 million euros on average annually.

    In an interview in June last year, Camus told Bloomberg News that Europe had fallen at least two years behind the U.S. in deploying infrastructure such as high-speed fiber and fourth- generation mobile networks.

    “The U.S. market has consolidated, while Europe has become the Tower of Babel,” Camus said at the time. “We’re late on 4G and we’ve got no project in fiber. That’s a handicap, especially in a bad macroeconomic context.”

    Alcatel-Lucent’s stock, which was taken out of France’s CAC 40 index in December, fell 1.8 percent to close at 1.24 euros in Paris. The shares have gained 23 percent this year, helped by a loan agreement with Credit Suisse Group AG and Goldman Sachs Group Inc. They are still down more than half after Verwaayen and Camus took over.

    By Bloomberg News
    on February 13, 2013 at 1:30 PM, updated February 13, 2013 at 1:40 PM
    Print



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    Alcatel-Lucent's former office complex in Whippany. The telecommunications company now has operations in Murray HillStar-Ledger File Photo

    Alcatel-Lucent SA Chairman Philippe Camus will seek a contract extension in May as the 64-year-old Frenchman looks to have another go at turning around the network equipment maker with the help of a new chief executive officer.

    Alcatel-Lucent spokeswoman Regine Coqueran, in a telephone interview, said Camus’s request to renew his mandate will be included in a document for the Paris-based company’s annual shareholder meeting scheduled for May 7. Chief Executive Officer Ben Verwaayen, whose contract also ends that time, told board members last week that he plans to step down when a succession plan is in place.

    A former head of European Aeronautic, Defence & Space Co., Camus was called in to lead Alcatel-Lucent’s board in 2008 after Patricia Russo and Serge Tchuruk were driven out for failing to turn a profit following the 2006 merger of Alcatel SA and Lucent Technologies.

    As chairman, Camus hired Verwaayen and stood by him even when investor pressure grew to replace the Dutch executive. Splitting his time between France and the U.S., Camus now faces the task of hiring a CEO and catching up with Ericsson AB and Nokia Siemens Networks, European rivals that are winning businesses in North America and improving profitability with job cuts.

    Industry Background

    Camus and the board want a European or American with a background in industry to help Alcatel catch up to rivals as carriers face tighter budgets, a person with knowledge of the matter has said. Alcatel appointed headhunter Russell Reynolds Associates to consider both internal and external candidates.

    Alcatel-Lucent trails Ericsson and Nokia Siemens in profits and is up against Asian competitors, sluggish spending in Europe and rigid job protection in France. Since the merger, the company has accumulated about 10 billion euros ($13 billion) in net losses, while its cash reserve has diminished by 700 million euros on average annually.

    In an interview in June last year, Camus told Bloomberg News that Europe had fallen at least two years behind the U.S. in deploying infrastructure such as high-speed fiber and fourth- generation mobile networks.

    “The U.S. market has consolidated, while Europe has become the Tower of Babel,” Camus said at the time. “We’re late on 4G and we’ve got no project in fiber. That’s a handicap, especially in a bad macroeconomic context.”

    Alcatel-Lucent’s stock, which was taken out of France’s CAC 40 index in December, fell 1.8 percent to close at 1.24 euros in Paris. The shares have gained 23 percent this year, helped by a loan agreement with Credit Suisse Group AG and Goldman Sachs Group Inc. They are still down more than half after Verwaayen and Camus took over

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    • Outrageous. Simply incomprehensible to ask for more time.

      Sentiment: Strong Buy

    • Great. The guy who picked Ben, "stood by him" even as shareholders were revolting, wants to stay so he can complete what he started (the destruction of AlcaLu). The failures have occurred on his watch too. Time to have the decency to step aside.

    • Camus needs to go. Period. He headed a board that oversaw 4 1/2 years of restructuring by Ben. Previous attempts did not result in a profitable company. The jury is out on the current attempt. We will know, probably, at the end of 2013 whether it was effective or not. Still, given the past, Ben was almost certainly gone regardless of the specific circumstances surrounding that outcome. Accordingly, Camus, should also take a hike. Besides, if I were to choose between Camus and William Nutti, an excellent executive with extensive restructuring credentials that is rumored to be interested, I choose Nutti. Especially since, if reports are true, that Nutti will not take the CEO job without also filling the position of Chairman of the Board.

 
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