[News item found on Yahoo! message board.]
FOCUSING ON THE FUNDAMENTALS
Thursday, March 30, 2000
MIKE ROGOWAY, Columbian staff writer
At the start of last year, GST Telecommunications' chief
executive officer Joe Basile looked ahead and proclaimed 1999
the company's "execution year," when GST would begin reaping
the rewards of five years and more than $600 million in
telecom investment.
It didn't turn out that way.
The Vancouver company failed to meet revenue projections,
its operating debt grew, news about the company was dominated
by lawsuits over past business deals, and GST's stock
stagnated even as the broader markets were soaring.
Finally, Basile himself walked away. He resigned abruptly
last January at what insiders say was a contentious board
meeting about the future of the company.
"I think 1999 turned out to be more a year for getting some
problematic issues behind us," said Basile's replacement,
acting CEO Tom Malone. "At this moment in time a lot of the
nonessential businesses have been sold and a lot of the legal
issues are behind us."
With a new management team in place, Malone said 2000 is a
year for starting over, a chance for the company to rebuild
its identity. Although he's still "acting" CEO, Malone
already has put his stamp on GST, reorienting the company to
focus on Internet service and data communications.
One of the first steps in that direction came early this
month, when GST laid off more than 100 employees out of
1,300. The cuts included six vice presidents, and Malone said
they made way for GST's change in direction.
"This was a top to bottom reorganization, because we're
serious about changing the culture of GST," Malone said.
"We're beginning to focus in a way we haven't on the
fundamentals."
Analysts are skeptical. They've heard big promises from GST
before, and have yet to see the detailed new operating plan
Malone has been promising.
"(To some) they appear to be rudderless," said Dave Heger,
an analyst who follows GST for A.G. Edwards. |
