Alcatel-Lucent S.A. (NYSE: ALU) is trading marginally higher on what is probably being packaged and sold as a management reshuffling but what may just be a mild switch of a product focus. Today’s continued move seems to reflect at least a portion of some of the 2011 efforts conducted by rival Cisco Systems Inc. (NASDAQ: CSCO). The company is going to reduce its top management committee to consolidate management and to combine functions. Alcatel’s new operating model is said to be “focused on core products, a strengthened sales organization and re-shaped corporate functions.”
The company’s Performance Program goes back to July, and the aim is to generate 1.25 billion euro of cost savings by the end of 2013. Today’s key objective of the new operating structure is to strengthen its presence in key telecommunications products and services through a unified business group with an executive committee overseeing the simplified business model.
A newly appointed chief operating officer will be focused on executing operational improvements. The new organization will become effective on January 1, 2013. Here are the key management changes:
- Paul Tufano becomes chief operating officer “with worldwide responsibility for Supply Chain, Procurement and three individual focused businesses (Enterprise, Strategic Industries and Submarine), in addition to his current role as Chief Financial Officer.”
- Robert Vrij becomes president of Global Sales & Marketing for a “single global sales organization to oversee and manage all customer-facing commercial relationships.”
- Stephen A. Carter becomes president of Managed Services and EVP of Corporate Restructuring, and he will oversee the Performance Program and Corporate Marketing & Corporate Communications.
- Philippe Keryer becomes president of Networks & Platforms to “replace the existing regional operating structure with four global product & services business units, each with full profit and loss responsibility.”
- George Nazi will remain president of the previously created Global Customer Delivery division.
- Jeong Kim will remain president of Bell Labs and chief strategy officer, as well as will be responsible for the patents assets/portfolio.
- Rajeev Singh-Molares will focus on the transformation and development of commercial operations in China through the Alcatel-Lucent Shanghai Bell joint venture.
Investors still appear to have at least some hope in their wallets here as shares are up 1.7%, or $0.02, at $1.17 so far. Unfortunately, trading volume is light in New York and the 52-week range for the ADRs is $0.99 to $3.37.
JON C. OGG
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