Big Ben goes "Bong!"
Feb 7, 2013
The sixty year-old Dutchman took over the hot seat from the Patricia Russo back in the late summer of 2008. Russo was then head of Lucent Technologies (where Ben Verwaayen worked prior to joining BT as Chief Executive) and she laboured mightily with Serge Tchuruk, the then boss of Alcatel and erstwhile CEO of oil company Elf Acquitaine, to make a success of the US13.5 billion mish-mash merger of Alcatel and Lucent. It was not a marriage made in heaven. The union was difficult and the consummation rather like watching a couple of angry porcupines trying to make a go of things as they manoeuvered to bash a square peg into a round hole.
When Ben Verwaayen arrived at Alcatel Lucent he vowed to turn it into a "normal" company (much to the amusement of the media) and announced that no dividends would be paid to shareholders until that normalcy was achieved. This, he promised, would be in 2012 but that year came and went with stockholders complaining more and more bitterly that they had seen no return on their investments since 2007. They still haven't.
Today Alcatel Lucent posted a loss of €1.37 billion for the quarter ended 31 December 2012. The company had reported an €868 million profit for the same period a year ago but performance overall has been erratic for years. Having finally lost all credibility in the eyes of investors Mr. Verwaayen had little choice but to resign before he was presented with the order of the boot. Alcatel Lucent shares rose by 6.8 per cent as the news of his resignation hit the wires. However they are still worth considerably less than half the value they had when Mr. Verwaayen took over.
The official spin is that Ben Verwaayen "will not seek re-election as chief executive of Alcatel Lucent" at the company's upcoming AGM but will be available for consultation and advice until then. In other words he probably won't be in the office very much over the next few weeks but the chairman has his home phone number and email address.
Meanwhile, the Alcatel Lucent board says it looking both inside the organisation to find Verwaayen's replacement. Considering that Ben V had always vigourously toe'd the obviously ersatz party line, insisting that Alcatel Lucent is an international company rarher than a French one, probably the worst mistake the Board could make now would be to appoint an old-school elitist Grandes Ecoles technocrat with lots of contacts in the French establishment. Such a chap (and let's face it the appointment of a female CEO is a tad unlikely) would find himself open to overt and covert political pressure and so mightily constrained in making s effective commercial decisions. If such an appointment is made, few would give Alcatel Lucent more than a couple of years before it implodes.
Mind you, thinking outside the box, Gerard Depardieu is kicking his heels up in Wallonia and might be available to return to Paris if the tax breaks were sufficiently alluring. Such an apointment would show some imagination and the press conferences would be "must attend" events with wall-to-wall coverage guaranteed.