Thursday, August 23, 2007

Two top executives to leave merged Alcatel

The turbulent 10-month marriage between Alcatel of France and Lucent of the US on Wednesday claimed two senior victims with the departure of highly-regarded executives from the telecommunications equipment supplier.

Mike Quigley, the Australian once tipped to be chief executive of the French group, and Frank D'Amelio, the former Lucent executive who was put in charge of integrating the two companies, had both resigned, the company said.

Mr D'Amelio is leaving to become chief financial officer at Pfizer of the US, the world's largest drugmaker. Mr Quigley, who moved sideways to become head of science, technology and strategy after the Lucent merger put paid to his chief executive prospects, is returning to his native Australia.

Analysts said Mr Quigley's departure was not a surprise given the fact that he had lost to Lucent's Pat Russo for the chief executive role.

However, Mr D'Amelio's departure raised concerns with at least one analyst, given the problems the group has already encountered in integrating the French and US companies. Alcatel is struggling to implement a cost saving programme that will mean more than 12,000 job cuts worldwide. French unions are fiercely opposed to the plan and media reports have suggested that the programme will have to be revised significantly.

The group has also reported consistently disappointing results since the merger, and has been forced to cut prices significantly to retain clients.

One of the company's smaller suppliers told the Financial Times that meetings with Alcatel-Lucent teams had revealed deep confusion over who was in charge and unhappiness over how the merger was being conducted.

Pat Russo, the US-born Lucent boss who took over as chief executive last year, on Wednesday sought to play down the departures.

"We are well served with a strong bench of top executive talent that we can draw upon,'' she said.


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