Dream Job: Running Alcatel-Lucent

Dream Job: Running Alcatel-Lucent

by Lionel Laurent,

At face value, the top spot at Alcatel-Lucent looks like a job nobody wants: the Franco-American network supplier is unprofitable, in full restructuring mode and is still paying for the huge $11 billion merger that brought it into existence in 2006. But it might actually be a dream position for a budding European chief executive looking to take part in a fairytale turnaround story.

Although the future replacements of outgoing Alcatel-Lucent CEO Patricia Russo and Chairman Serge Tchuruk might have to come up with some new ideas on how to cut costs, the real bulk of the restructuring plan has already been set out. Alcatel-Lucent is looking for 2.1 billion euros in cost savings by 2009, largely by cutting 16,500 jobs, and a lot of the problems at the business' core could be solved by better management and better execution.

According to Nicolas von Stackelberg, an analyst with Oppenheim Research, Alcatel-Lucent's arch-rival Ericsson went through the same situation five years ago. Back then, Ericsson was licking its wounds after the end of the dot-com boom: the arrival of Carl-Henric Svanberg in 2003, after years of revolving-door CEOs, allowed him to helm a company at the start of a turnaround.

All that is left now is for someone to take up the Alcatel-Lucent gauntlet--and the credit. Possible candidates include former executives at pre-merger Alcatel, such as former chief operating officer Philippe Germond, who is now boss of Atos Origin. Alcatel's former head of American operations, Mike Quigley, could also be a candidate.

Former BT Group chief Ben Verwaayen had been rumored to be in the running, but a report in The Wall Street Journal on Tuesday claimed that he had rebuffed Alcatel's approaches. Both Alcatel-Lucent and its reported recruitment firm, Korn Ferry, refused to comment.

Alcatel-Lucent's Russo and Tchuruk announced their intention to step down last month, after reporting a $1.7 billion loss for the quarter. Tchuruk is set to leave in September, while Russo will not leave until the end of the year. It is not clear what will happen if a replacement for either is not found.