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— At Britain's BT Group, Ben Verwaayen was lauded for transforming the money-losing phone company into a profitable and aggressive leader in broadband Internet access.
Alcatel-Lucent will be looking for him to match that performance when he comes in as part of a new management tandem tasked with reversing a six-quarter earnings slide that has rung up 4.8 billion euros ($7 billion) in losses. The world's largest manufacturer of fixed-line telecommunications gear Tuesday appointed Verwaayen as its new chief executive, and former EADS co-CEO Philippe Camus as its new chairman.
Verwaayen, who is Dutch, and Camus, who is French, replace the U.S. and French executives behind the $11.4 billion deal that combined France's Alcatel and U.S.-based Lucent Technologies two years ago. Verwaayen replaces CEO Patricia Russo effective immediately, while Camus will replace Serge Tchuruk — long Alcatel's top executive — next month.
Russo and Tchuruk announced their resignations in July after Alcatel-Lucent reported a second-quarter net loss of 1.1 billion euros ($1.73 billion). That included an 810 million euro ($1.3 billion) writedown in the value of the company's goodwill, reflecting its market slide.
Verwaayen has a long track record in the telecommunications business, notably as CEO of BT from 2002 until June. But he is not a fresh face at Alcatel-Lucent; he was the vice chairman of Lucent's board before Alcatel acquired it.
Dresdner Kleinwort analyst Lawrence Sugarman said Verwaayen is well-respected in the industry and is "a good big-picture thinker," pointing to his stewardship of the broadband Internet initiative at BT — the former British Telecom.
"The UK went from being behind to being one of the most advanced European countries in terms of broadband penetration," Sugarman said.
Camus, who spent 2000 to 2005 as co-CEO of EADS, parent company of plane maker Airbus, is now a partner in U.S. investment advisory firm Evercore Partners. He is also a co-managing partner of French media firm Lagardere SCA.
Alcatel-Lucent's U.S. shares were down 3.6 percent at $5.96 in afternoon trading.
Alcatel-Lucent shares have risen 6.4 percent since the company announced the departure of Tchuruk and Russo in late July, but are still down 16 percent since the start of the year.
The Alcatel-Lucent linkage was designed to boost margins through savings on expenses and research and development, while improving the joint company's pricing power with telecom operators, its largest customers. That was thought to be key for competing with the likes of China's Huawei Technologies Co. and Ericsson AB of Sweden.
But intense competition in the industry has meant many of the savings have been used on discounts passed to customers, and analysts have said Alcatel-Lucent has not coped as well as some of its competitors.
The company has reported losses in every quarter since Alcatel bought Lucent, a successor to AT&T's equipment-making arm, in November 2006. Now the new company is in the throes of a restructuring that foresees 16,500 job cuts.
At BT, Verwaayen oversaw a series of job cuts, culminating in last November's announcement that the company expected to slash around 5,000 jobs over a year.
