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Tuesday, September 02, 2008
Alcatel-Lucent Names New CEO, Chairman
Associated Press
Alcatel-Lucent said Tuesday it has appointed former BT chief executive Ben Verwaayen to replace outgoing CEO Patricia Russo.
The world's largest manufacturer of fixed-line telecommunications gear also named former EADS co-CEO Philippe Camus as non-executive chairman, replacing longtime Alcatel chairman Serge Tchuruk.
Verwaayen's appointment is effective immediately, and Camus will take over as chairman on Oct. 1, Alcatel-Lucent said in a statement.
Russo and Tchuruk announced their resignations in July after Alcatel-Lucent (ALU) reported a sixth consecutive quarter of losses.
Verwaayen, who is Dutch, has a long track record in the telecoms business -- notably as CEO of BT from 2002 until June. Previously, he was the vice chairman of the management board of Lucent Technologies, the U.S. telecoms equipment maker acquired by France's Alcatel two years ago.
Alcatel-Lucent shares fell sharply early in the Paris stock exchange session, but in midmorning trading had recovered most of their losses and were down 1.4% or euro0.06 ($0.09) at euro4.24 ($6.20).
Alcatel-Lucent reported a net loss of euro1.1 billion ($1.73 billion) for the second quarter after taking a euro810 million ($1.3 billion) goodwill write-down, compared with a net loss of euro586 million a year earlier.
The company has reported losses in every quarter since Alcatel bought Lucent Technologies Inc., a successor to AT&T's equipment-making arm, in a $11.4 billion deal in 2006. Alcatel-Lucent is in the midst of a restructuring that foresees 16,500 job cuts.
When conceived, the Alcatel-Lucent tie-up was designed to boost margins through cost and research and development savings, while improving the joint company's pricing power with telecom operators, its largest customers.
The combination was seen as creating the critical mass to compete 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 said Alcatel-Lucent hasn't coped as well as some of its competitors.
FOX Translator
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No, it's not a dance craze. Contago is a condition of supply and demand, essentially a fancy word to say that prices for items, typically commodities, are cheaper now than they would be at some point down the line.
Anything that¿s sold in the futures market can be in a case of contango. Futures are exactly that: a contract to buy an item or asset at a price in the future. This is the case with oil, with traders buying and selling contracts to acquire a barrel of oil in months down the line. When a market is in contango, spot prices, or the price of a commodity if you were to buy it right now, are lower than forward prices.
Why is that important? Well, it usually tells you the supply of a given commodity is plentiful (since, according to Economics 101, a large supply usually leads to cheap prices).
Incidentally, if you think contango is a mouthful, its opposite condition is known by the equally tongue-tying term backwardation.
