Alcatel’s Camus Will Seek Another Term to Tackle Turnaround
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.
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, Alcatel-Lucent spokeswoman Regine Coqueran said yesterday. Chief Executive Officer Ben Verwaayen, whose contract runs out at the same time, told directors last week that he would step down after 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.
Camus and the board want a European or American with a background in industry to help Alcatel catch up with 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. Verwaayen’s successor will also need to cope with rigid job protection in France and a tough stance from Socialist President Francois Hollande, who was elected in May after vowing to block “a parade of firings.” The government holds a minority stake in Alcatel-Lucent.
The French National Assembly’s economic commission said yesterday it met with Alcatel-Lucent union representatives about how the state can help support jobs, research and business at the company. The commission discussed with Alcatel executives in December about a plan to eliminate 5,500 positions.
“We’ve defined a series of levers on which we will, in the coming days, ask the French and European regulators and governments to act,” Francois Brottes, the commission’s president, said in a release.
Alcatel-Lucent’s stock, which was taken out of France’s CAC 40 index in December, slipped 0.3 percent to 1.23 euros at 9:06 a.m. 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 since Verwaayen and Camus took over.
Since the 2006 merger, Alcatel-Lucent 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.”
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