Lucent Names Russo as CEO
Troubled Lucent Technologies Inc. on Monday named telecommunications veteran and current Eastman Kodak Co. President Patricia Russo as its chief executive, ending a management search that dragged on for more than a year.
Russo, 49, spent nearly 20 years at AT&T; Corp. and its Lucent spinoff before leaving in August 2000. In April, she became president and chief operating officer of Kodak, where she has led a campaign to revive sales and refocus the Rochester, N.Y.-based film maker.
Russo’s appointment as Lucent CEO makes her one of the few women running a major U.S. corporation. It is a select group that includes Carly Fiorina, another former Lucent executive and now chief executive of Hewlett-Packard Co.
Russo will replace Henry Schacht, who rejoined Lucent for a second stint as chief executive in October 2000 after the abrupt departure of CEO Richard McGinn.
McGinn’s dismissal came amid a growing financial mess at the Murray Hill, N.J.-based telecommunications equipment firm. As rumors of bankruptcy swirled around the company, Schacht embarked on a radical restructuring plan, slashing Lucent’s work force in half and selling off business units to stabilize the company’s finances.
The company posted a net loss of $16.2 billion for its fiscal year ended Sept. 30. Last month, Lucent warned that it would book a larger-than-expected loss in its fiscal first quarter because of the retrenchment in equipment purchases among Lucent customers.
Some investors had hoped the company would name an outsider to the post, and the market’s reaction to Russo’s appointment, which was announced early in the day, was less than enthusiastic. Lucent shares fell 15 cents to $6.95 on the New York Stock Exchange.
But Schacht called Russo a “great choice” for Lucent.
“We were looking for a seasoned and proven leader, a CEO or COO of a major company ... and hopefully, someone that knew us,” he said. “Pat clearly met all of the criteria.”
Some analysts agreed.
“She makes a good fit because she knows the company, she knows the industry and more important, she already has relationships with the company’s key customers,” said Dave Powers, a telecommunications analyst at Edward Jones.
What’s more, Powers said, “the new strategic vision has already been set, and bringing in someone from the outside at this point would be more disruptive than carrying out the existing plan.”
Jeff Christian, who has worked with Russo several times over the years through his executive search firm, described her as “intense, but with a sense of humor.”
He added that Russo might have been tainted somewhat because she was at Lucent when it began to falter, “but the fact that she’s being brought back certainly clears the air completely, and shows the board’s belief that the problems were not of her making.”
Russo will inherit a much smaller Lucent, with traumatized employees and little hope of a sales rebound any time soon.
She acknowledged that Lucent “has been through some difficult times,” but said she believes in the course laid out by Schacht, calling it “a solid and credible plan.”
Under that plan, Lucent will focus on its core business of selling network gear to large telephone companies, such as SBC Communications Inc., Verizon Communications Inc. and AT&T--the; business Russo once led.
