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Technology Stocks : Ericsson overlook? -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (5136)	2/6/2003 12:25:50 PM
From: Jim Oravetz	Read Replies (2) \| Respond to of 5390

Ericsson Names an Outsider To Succeed CEO Hellstroem Carl-Henric Svanberg, Head of Assa Abloy,Will Take Over Telecom-Gear Giant in April By BUSTER KANTROW and RUPINI BERGSTROM DOW JONES NEWSWIRES STOCKHOLM -- Telefon AB L.M. Ericsson Thursday appointed Assa Abloy AB boss Carl-Henric Svanberg as its new chief executive, signaling the start of a new era for the struggling Swedish telecommunications-equipment maker. The choice of Mr. Svanberg to replace CEO Kurt Hellstroem caught many by surprise. But investors, many of whom had been frustrated by Mr. Hellstroem's leadership, welcomed the change, sending Ericsson's shares up 14% to 6.70 kronor (79 U.S. cents or 73 European cents) in midday trading in Stockholm. Mr. Svanberg, who has built Assa into the world's largest lockmaker through a series of acquisitions, will take over on April 8, when Ericsson holds its annual shareholders meeting. Mr. Hellstroem will remain with Ericsson until the end of the year, the company said, to help with the transition. The change comes as Ericsson, the world's largest maker of equipment for mobile-phone networks, approaches what it hopes will be the end of a two-year battle to adjust to a sharp slump in demand from telecom operators, its key customers. After shedding more than 40,000 jobs over the past two years, Ericsson has vowed that it will return to profitability this year. But the appointment comes only three days after Ericsson reported disappointing fourth-quarter figures and forecast more gloom for the industry in 2003, news that sent its shares sharply lower earlier this week. Urban Ekelund, a telecom analyst at Redeye in Stockholm, said the choice of Mr. Svanberg signals that the Ericsson board may believe that the restructuring process is nearly complete. "I don't see him as a cleanup guy. He's more like a growth CEO," Mr. Ekelund said. Mr. Svanberg has been voted among the top three leaders in Sweden for several years running, said Anders Trapp, an engineering analyst at Enskilda Securities who follows Assa Abloy. "His main strength is that he is good at getting people on board, changing their attitudes," Mr. Trapp said. "Svanberg and [Ericsson Chairman Michael] Treschow will likely make a complementary combination -- Treschow is known for being a tough guy on costs, while Svanberg has a growth focus," Mr. Trapp said. Mr. Hellstroem's departure was widely anticipated as he approached the traditional Swedish retirement age of 60. Chief Operating Officer Per-Arne Sandstroem, who has overseen Ericsson's restructuring efforts, had been mooted as the most likely successor, though the choice was far from clear. "I think it's good now that they've chosen an external CEO," said Mr. Ekelund at Redeye. "The negative thing is he doesn't know very much about telecoms. But maybe Ericsson needs someone who breaks up the technical thinking and culture in the company." Mr. Hellstroem, who took over as president of Ericsson in 1999 and became chief executive in early 2001, has been criticized for not reacting quickly enough to the industry slump and for his often awkward encounters with the media. Some investors had hoped for management changes last year as Ericsson raised 30 billion kronor from shareholders to shore up its balance sheet. Ericsson said Mr. Svanberg had bought Class B shares valued at 100 million kronor from controlling shareholders Investor AB and Industrivaerden as part of the announcement. Shares in Assa Abloy tumbled 14% to 76.5 kronor on news of Mr. Svanberg's departure. Mr. Svanberg will be replaced by Bo Dankis, currently group vice president and head of Assa Abloy's south European operations.