Alcatel hopes are riding on ex-nortel boss Monty

Telecom firm employs 2,500 in Kanata

Struggling telecom equipment maker Alcatel-Lucent said Friday it has picked Michel Combes and Jean Monty to lead a turnaround in its fortunes.

Coombs, a former Vodafone executive, will take over as chief executive on April 1 while Monty — who ran Nortel Networks from 1993 to 1997 — has been appointed vicechairman effective immediately.

Alcatel-Lucent, formed in 2006 through a merger of Paris-based Alcatel and Lucent of New Jersey, appeared to have turned a corner in 2011 with a string of profitable quarters. But the firm suffered a net loss last year of nearly $2 billion thanks to inroads made by low-cost rivals such as Huawei of China.

Alcatel-Lucent on Feb. 8 announced the resignation of CEO Ben Verwaayen, who had been approaching the end of his multi-year contract.

Although Verwaayen is already implementing a plan to trim 5,500 workers, Combes and Monty are expected to cut expenses even further in an effort to regain profitability.

Coombs, with a background in finance, has plenty of cost-cutting experience — at Vodafone he was in charge of a $3-billion program that cut staff levels and R&D throughout the firm’s European operations.

It’s not clear what Monty’s role will be. It’s been 16 years since he left Nortel in the hands of John Roth, and the telecom equipment industry has changed profoundly in the meantime.

However, Monty has been a director at Alcatel-Lucent since 2008 and is fully aware of the problems affecting the $18.6-billion-a-year multinational.

He is also one of the sponsors of a major case study being prepared by the University of Ottawa’s Telfer School of Management. The subject: The rise and fall of Nortel Networks.

Monty serves as well on the board of Bombardier and Fiera Capital, a Montreal money management firm.

It’s also not clear what, if any, impact there will be on Alcatel-Lucent’s operations in Kanata, the base for close to 2,500 employees.