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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: AL H who wrote (1975)	7/8/1999 6:48:00 AM
From: Jeff R	Read Replies (1) \| Respond to of 34857

FYI... Ericsson CEO Resigns Amid Concerns Of Slow Growth; Ramqvist to Take Over By ALMAR LATOUR Staff Reporter of THE WALL STREET JOURNAL STOCKHOLM -- Telefon AB L.M. Ericsson President and Chief Executive Sven-Christer Nilsson resigned Wednesday after less than 15 months at the helm of the Swedish telecommunications-equipment maker. Chairman Lars Ramqvist, Mr. Nilsson's outspoken predecessor, will take back his old job as CEO, while the presidential slot will go to the soft-spoken Kurt Hellstrom, vice president for the Asian-Pacific region. Mr. Ramqvist said Mr. Nilsson failed to push through rapid reforms, even as the long-term strategy he developed for Ericsson will remain in place. "We have certain problems," Mr. Ramqvist said. "We have to come out with more new products and we need to do it faster. We need to step up the pace of restructuring." For his part, Mr. Nilsson said he couldn't execute his plans swiftly enough because he couldn't get along with the company's top management and faced resistance to change from within the organization. "The chemistry between me and the chairman was not at the very best," said Mr. Nilsson. "That made things difficult." He admitted he would've liked to continue in the post. Tough Period To be sure, Mr. Nilsson's reign has been a tough period for Ericsson. The company saw archrival Nokia Corp. of Finland take over its lead position in global mobile-phone sales and Mr. Nilsson issued a surprise profit warning last December that abruptly sliced the company's share price in half -- only to climb back slowly to previous levels recently. The release of new mobile phones were repeatedly delayed last year, while several models were recalled because of technical problems. What's more, as Mr. Nilsson came to the helm of the company, rivals in the data-communications arena such as Nortel Networks Corp. and Lucent Technologies Inc. started gobbling up Internet-technology companies at a dizzying pace -- a trend that Ericsson picked up only slowly and never fully embraced. Instead of buying major Internet companies, Ericsson pursued its so-called "string of pearls strategy" of buying a handful of tiny Web-technology concerns, but relying mainly on organic growth. Such technology is important to Ericsson because the next generation of mobile phones and other telecom products will rely on wireless access to the Internet. During his time at the top, Mr. Nilsson never gained the full confidence of the market. Analysts said Ericsson wasn't transparent enough about its problems and developments, while Mr. Nilsson appeared awkward and hesitant in public when talking about the company's disappointing results in the autumn of last year. In addition, board chairman Mr. Ramqvist appeared in local media on several occasions to counter remarks by the CEO, undercutting his authority, analysts say. 'A Bleak Figure' "He was a bleak figure," says Lars Soederfjell, telecom analyst with Myrberg Securities in Stockholm. "The restructuring he started simply took too long. The results are poor. We find the move positive. Nilsson was not the right man for the job." Mr. Nilsson agrees that he found it difficult to carry through changes at more-than-a-century-old Ericsson, which is notorious for its slow, consensus-based management style. He made plans to lay off nearly 14,000 workers in the next two years -- 6,500 remain yet to be determined -- and eventually made several acquisitions of Nordic and U.S. Internet-technology companies. Still, Mr. Nilsson said he couldn't bring about the metamorphosis he had hoped for, failing to centralize decision-making while decentralizing production and research and development in swift fashion. "A big company is a big company," he said. "Ericsson has very old traditions and it's extremely hard to overcome that if you're trying to change the way things are done." The market was shocked at Mr. Nilsson's resignation. In trading at the Stockholm Stock Exchange Wednesday, Ericsson shares recently had recently hit a high of 287 kronor ($33.81 or 33.02 euros), but upon the news the company's B shares fell 8.1% to 262 Swedish kronor for the day. Mr. Nilsson's resignation far from settles Ericsson's leadership troubles. For one thing, Mr. Ramqvist has indicated that he will hold his new position only temporarily, opening up broad speculation about who may eventually take over the top slot. One possibility may be Jan-Ake Kark, the current president of Telia AB and a former Ericsson Radio Systems top manager, who according to Telia insiders wants to leave the state-owned operator because he can't hold the executive position after Telia completes its merger with Telenor ASA of Norway. Meanwhile, Mr. Hellstrom, who is currently based in Hong Kong, did not yet lay out a clear game plan for Ericsson's immediate future, vowing he'll be back soon to explain his plans as president. Planning for the Future Mr. Ramqvist and Mr. Nilsson have had numerous conversations in recent weeks about the future of the company and Mr. Nilsson's role in it, according to company officials. People close to Mr. Nilsson say he and Mr. Ramqvist frequently bickered over issues ranging from management style to layoffs. During a telephone conference, Mr. Ramqvist conceded that "the process between the president and the board didn't function as well as we would've liked it to." Mr. Ramqvist also indicated that Ericsson is still on the lookout for new top managers and even Mr. Hellstrom's job may be temporary in nature. "I'm not staying on indefinitely," he said. For his part, Mr. Nilsson said he has already received two new job offers in the telecommunications industry, although he declined to specify concerns. "I haven't left the battle field," he quipped. "I'll be back soon."