Alcatel Lucent SA (NYSE:ALU) announced that its board of directors approved the appointment of Michael Combes to serve as the company's chief executive officer, starting April 1, 2013. He will replace Ben Verwaayen in his position who failed to maintain its profitability.
According to the networking and communications technology company, Combes will also become a member of its board of directors subject to the approval of shareholders during their upcoming general meeting on May 7, 2013.
Alcatel Lucent SA (NYSE:ALU), expressed confidence in Combes' capability in leading the company because of his extensive experience in the telecommunications industry. Prior to his appointment as CEO of Alcatel Lucent SA, Combes served as chief executive of Vodafone Europe and was a member of Vodafone Group Plc (NASDAQ:VOD) (LON:VOD). Prior to that, he served as chairman and CEO of TDF. He also worked with France Telecom SA (NYSE:FTE) (EPA:FTE) as CFO & senior executive vice president.
In a statement, Philip Camus, chairman of Alcatel Lucent SA (NYSE:ALU) said, “It is a great pleasure for us to welcome Michel Combes to Alcatel-Lucent. As chief executive he will be responsible for delivering sustainable profitability. His deep knowledge of the industry as well as his experience of major business and financial transformation at a worldwide level will be pivotal in helping the company pursue its aggressive transformation, while meeting customer needs with disruptive innovation.”
“Alcatel Lucent SA is an unrivalled technology leader in the telecommunications industry with an immense array of talent and capabilities in R&D facing major challenges. This is a company I know well and I look forward to succeeding Ben, working with the key international customers, and driving the business into sustained profitability for its customers, employees and shareholders,” Combes added.
According to the company, Verwaayen will work with Combes over the next several weeks to ensure the smooth transition of responsibilities to the new CEO.
In addition, the company also named Jean Monty as vice chairman of the board of Alcatel Lucent SA (NYSE:ALU). Monty is a Canadian national and a former chairman and CEO of Bell Canada Enterprises.
A report from the New York Times cited that Combes plans to conduct a “listening tour” of employees, shareholders, and other stakeholders in the company before creating a strategy to boost Alcatel Lucent SA (NYSE:ALU) profitability.
The company lost $1.9 billion due to a 6 percent sales decline last year. In addition, Alcatel-Lucent might reduce its workforce by 7 percent by the end of 2013.
Exane BPN Paribas analyst, Aleksander Peterc opined that the company is in crisis and Combes should identify the businesses of Alcatel-Lucent, which will be sold to save thousands of jobs. Peterc also said, “They have tried for six years since the merger and have spent €4 billion on restructuring to turn this company around and it hasn’t worked yet.”