CEO and Chairman Out at Alcatel-Lucent

Was the transatlantic merger even worth it? With Patricia Russo and Serge Tchuruk both stepping down, the company devise have to convince investors

Watch full size video:

From left, Alcatel-Lucent Chairman Serge Tchuruk and CEO Patricia Russo. Eric Piermont/AFP/Getty Images

by Carol Matlack


On July 29, shareholders in telecommunications equipment giant Alcatel-Lucent (ALU) finally got what various have been demanding for months: the resignations of Chief Executive Patricia Russo and Chairman Serge Tchuruk. Russo, the former master of Lucent Technologies prior to its 2006 merger with Alcatel, related she’ll action down before the extremity of the year, at the same time that former Alcatel chief Tchuruk will leave Oct. 1. "The company will benefit from new leadership aligned with a newly composed board to bring a fresh and unrestrained perspective," Russo said, in announcing the changes, which will include a downsizing of its 14-member board.

The telecom gear maker’s latest quarterly results, also issued July 29, underscore just how tough a job the new guidance team will face. Alcatel-Lucent posted a $1.7 billion quarterly loss, including a $1.3 billion writedown on the North American wireless business inherited from Lucent. Quarterly revenues were down 5.2% year-on-year, to $6.5 billion, and the company warned that spreading economic malaise in Europe could farther dampen sales. "We may see more weakness in spending" by fixed-line phone and broadband operators, traditionally a strong dealing toward Alcatel-Lucent, Russo said in a conference call with journalists and analysts.

Alcatel-Lucent shares, which have sagged 60% since the merger, remained largely unchanged in July 29 trading after the tidings. The $27.5 billion company hasn’t posted a profit since the merger.

A Tricky Transatlantic Merger

What went wrong? Can it be fixed? And if so, who can fix it? Although Alcatel-Lucent characterized the departures of Russo and Tchuruk considered in the state of the end of a "transitional phase," the impress reflects ocean disappointment in a merger that both promised would create a global powerhouse. "We were not same cutting on the rationale behind the merger in the first place, and we’ve been disappointed with the progress management has made in executing it," says Richard Windsor, a London-based analyst with Nomura International.

Or, as French newspaper Le Monde succinctly put it in a front-page headline on July 29: "The endurance of Alcatel-Lucent’s top executives signals their failing."

Like other makers of telecom equipment, Alcatel-Lucent has been clobbered by slowing economies—as well as by brutal price competition from newcomers such as China’s Huawei Technologies. But it has been further handicapped by dint of. the dead-set of carrying out a tricky transatlantic merger (BusinessWeek, 6/18/08).

Hinting at Board Changes

New care and a revamped board won’t get better the overall market situation. But industry-watchers predict the company will bring in a CEO and new board members by few ties to each Alcatel or Lucent. That could help clear away the entrenched interests and Franco-American politicking that wish weighed attached the companionship. "It is open something fundamental has to happen," says a crown of the head European telecommunications executive who knows Alcatel-Lucent well.

Although the company didn’t give particulars, it hinted at forthcoming board changes in announcing that Henry Schacht, a preceding Lucent chairman and CEO, would immediately step into disfavor. Until now, the board has been carefully balanced between ex-Alcatel and ex-Lucent representatives.

No clear path to reviving world trade talks: U.S. (Reuters)

WASHINGTON (Reuters) - Differences between the United States and leading developing countries India and China that toppled world trade talks last week are too tangled skein to be quickly resolved, a top U.S. trade official said on Wednesday.

Rich are not so different when economy is down

Watch full greatness video:

The rich are sharing your financial pain

It may have taken longer and it may not be as acute, but there are early hints that the economic slump is crimping the lifestyles of the wealthy.

They are investing more conservatively, expenditure less on animalism goods and are being more thrifty by their doubt not cards. Many are asking their personal shoppers and private-jet providers to seek the superlatively good deals rather than over-the-top extravagances.

That news may produce a shrug from commonalty who have lost their jobs or homes in this good housewifery. The point to be solved is that when the wealthy get stingy, it trickles from a thin to a dense state to the rest of us.

“It’s a sluggish economy and its difficulties are felt all over,” said Joseph DiRenzo, 38, a father of three who left a hedge fund two years past to enter commercial real estate.

DiRenzo says he’s feeling the hit in many places, especially in the value of his furnish through a house on Long Island’s upscale Gold Coast in Muttontown, N.Y.

He owns the kind of place you’d look for a former hedge-fund manager would call home: six bedrooms, seven full baths, hand-crafted Italian doors throughout, high-tech ease and sound systems, and 9,000 square feet of living extent on 2.4 acres.

It can be had for $7 a thousand thousand

DiRenzo wants a smaller, cheaper home. He also may buy a hermaphrodite to supplement the two Mercedes in his heated four-car garage. And, he’s driving smaller.

The DiRenzos aren’t unlike many American families cutting back to weather a downturn. They’re blameless richer.

To be sure, the poor and intermediate class are being hurt more, but upper-crust thriftiness could resound across the rest of the economy.

The 10 percent of households with the highest incomes account for not remotely a quarter of all spending, according to facts compiled by research firm Moody’s Economy.com from a 2006 federal view.

Fatal shooting of hiker mystifies her family

Watch full size video:

OSO, Snohomish County

“Be troubled,” he said. It was opening weekend of bear season, and “There’ll be a lot of [people] with guns lacking in that place.”

Pamela Almli, 54, brushed away his concerns.

An avid and accomplished hiker, she felt as safe and at home on the trails as just round anywhere.

But her son’s fears were justified.

About 10:30 a.m., while Almli was bent over on a notable hiking trail, she was fatally projectile by a 14-year-old boy who mistook her for the sake of a bear.

“How could anybody think a 5-foot-2 Swede was a bear?” Troy Almli said. “We just can’t see it.”

He said the lineage is not anti-gun or anti-hunting, but the shooting was befuddling. So his aunt and grandfather on Monday retraced his spring’s last steps to see if they could make sense of the tragedy.

Police said the 14-year-old and his 16-year-old brother, one as well as the other from Concrete, were dropped not on in the Sauk Mountain superficial contents near Rockport, Skagit County, on Saturday morning by their grandfather, but he was not with them when the shooting occurred.

The teens told investigators they were on a ridge of rocks overlooking the trail and were “convinced” they were looking at a sustain when the shooter was fired from about 120 yards away. Almli had stopped to oblige something in her backpack.

Chief Deputy Will Reichardt of the Skagit County Sheriff’s Office said both boys are licensed and experienced hunters and are before-mentioned to be from a “nice family.”

He said investigators have spoken with Skagit County prosecutors, but no determination has been made about filing charges in affinity with the shooting.

Italian reaches base camp after tragedy on K2

ISLAMABAD, Pakistan The last survivor of the deadliest mountaineering disaster to hit K2 limped into base encampment with frostbitten feet Tuesday, but turbid clouds threatened to keep him on the vast eminence for at least another night.

Watch full size video:

“Now I positively realize that everyone here has died,” said Italian climber Marco Confortola, 37, who was stranded on the world’s second highest peak after an avalanche of falling ice blocked climbers descending from the highest point nearly four days ago.

As many as 30 mountaineers began their ascent of K2 on Friday. Eleven died in the avalanche that swept more climbers away and left others stranded in frigid stipulations just below the 28,250-foot summit: three South Koreans, two Nepalis, two Pakistanis and mountaineers from France, Ireland, Serbia and Norway.

“I am seasonable to be active,” Confortola told Everest-K2-CNR, an Italy-based high-altitude scientific research group, during a phone call from K2’s advanced base camp steady the Pakistani side of the mountain at about 17,000 feet.

The group’s spokeswoman, Francesca Steffanoni, said the mountaineer was examined by an American doctor and reported to be in good condition, despite his blackened, frostbitten toes.

“I am fine, luckily I’m made of stern press,” Confortola said, according to a transcript of the colloquy. “The only problem is that my feet afflict. I spent seven days on that mountain. It was hard. It was terrible.”

Confortola told Italy’s SKY TG 24 TV that he would return to Italy “as soon as possible” to see a doctor he trusted to treat his feet and lessen limbs.

“I possibility of good to advance on the frontier home soon - within a couple of days,” he said.

The Italian echoed criticism of the expedition voiced by a Dutch climber rescued Monday. Confortola said the expedition was undermined through inexperience and low-quality outfit, including ropes and spikes that easily broke.

He told Everest-K2-CNR of feeling irreparable when he and others made a futile make trial to rescue the three Koreans dangling from a pull. He said he was over weak and had to accord. up.

“I couldn’t captivate it anymore, I descended” alone, Confortola said. “… The descent was devastating, especially the last part.”

His plight has been front-page news for days in Italy with unremitting updates on his onward broadcast on TV. He was escorted part of the way down by three others, including every American climber.

Video game helps young cancer patients take meds (Reuters)

Watch full size video:

"Targeted video games can remedy improve the lives of in one’s teens people with cancer, most importantly gain their adherence to their treatment," Dr. Pamela M. Kato of the University Medical Center Utrecht in the Netherlands, the study's lead author, told Reuters Health.

Adherence is a greater problem in this age group, Kato and her colleagues point out in their report. While dramatic improvements in survival have been seen in pediatric cancer patients, they add, death rates mixed teens and young adult patients have not followed this trend. "They're kind of a tough group that gets a little atom lost in the system," Kato said.

To investigate whether playing a video game power prevent, the researchers randomly assigned 375 male animal and child-bearing patients 13 to 29 years old being treated at centers in the US, Canada and Australia to play "Re-Mission" or "Indiana Jones and the Emperor's Tomb," a upright video prey not focused on cancer care.

In Re-Mission (

Patients in as well-as; not only-but also; not only-but; not alone-but groups were asked to play their assigned game for at least an hour a week, and 22 percent of those in the similitude group and 33 percent of those in the Re-Mission group actually did so over the course of the 3-month study.

Electronic pill monitoring showed a 16 percent rise in antibiotic adherence in the Re-Mission group, who took 62.3 percent of their total prescribed antibiotic medications, compared to 52.5 percent as being the Indiana Jones group. Adherence to a measure chemotherapy drug was also higher in the Re-Mission form into groups.

Playing Re-Mission was tied to improvements in cancer-related knowledge as well, the authors note.

According to Kato, the play worked because it gave the patients a new way of looking at their illness; for example, thinking of chemo as a way to combat cancer, rather than as an annoyance that makes their hair fall out. "To me it was friendly of changing their reward system for taking chemo and giving them a diverse insight," she explained.

The heroic can be downloaded free from the Web location by patients and medical professionals.

SOURCE: Pediatrics, August 2008.

Israel mulls military option for Iran nukes (AP)

Watch abounding sizing video:

Such talk could be other thing threat than reality. However, Iran’s refusal to accept Western conditions is worrying Israel as is the seeing that Washington now prefers diplomacy over confrontation with Tehran.

The Jewish state has purchased 90 F-16I fighter planes that can carry sufficiency fuel to extend to Iran, and will give credence to 11 more by the end of next year. It has bought two new Dolphin submarines from Germany reportedly adapted of firing nuclear-armed warheads — in addition to the three it already has.

And this summer it carried out air maneuvers in the Mediterranean that touched off an between nations debate over whether they were a “adjust rehearsal” instead of an near at hand attack, a stern admonitory to Iran or a just a way to arrive allies to step up the pressure on Tehran to stop building nukes.

According to foreign media reports, Israeli intelligence is smart inside of Iranian territory. Israel’s military censor, who can impose a range of legal sanctions against journalists operating in the country, does not permit publication of details of such complaint in news reports written from Israel.

The issue of Iran’s nuclear program took on new urgency this week after U.S. officials rejected Tehran’s response to an incentives package aimed at getting it to stop sensitive nuclear activity — setting the stage for a fourth round of international sanctions against the country.

Israel, itself an undeclared nuclear power, sees an atomic bomb in Iranian hands considered in the state of a straight threat to its existence.

Israel believes Tehran will have enriched enough uranium for a nuclear bomb by the agency of nearest year or 2010 at the latest. The United States has trimmed its estimate that Iran is several years or as much as a decade away from being able to field a bomb, but has not been definite about a timetable. In general U.S. officials think Iran isn’t as close to a bomb as Israel claims, but are concerned that Iran is influencing faster than anticipated to superadd centrifuges, the workhorses of uranium enrichment.

“If Israeli, U.S., or European intelligence gets proof that Iran has succeeded in developing nuclear weapons technology, in consequence Israel decision respond in a manner reflecting the existential threat posed by the agency of such a weapon,” said Israeli Deputy Prime Minister Shaul Mofaz, discourse at a policy forum in Washington final week.

“Israel takes (Iranian President) Mahmoud Ahmadinejad’s statements touching its destruction solemnly. Israel cannot risk another Holocaust,” Mofaz declared.

The Iranian leader has in the after called for Israel’s elimination, though his exact remarks have been disputed. Some translators say he called for Israel to be “wiped off the picture,” while others say a better translation would be “fade away from the pages of time” — implying Israel would cease on its avow rather than be destroyed.

Iran insists its uranium enrichment is meant only for electricity generation, not a bomb — an assertion that most Western nations see as disingenuous.

Israeli policymakers and experts have been debating on account of quite more age whether it would equable be possible for Israel to get hold of out Iran’s nuclear program. The duty would be far more complicated than a 1981 Israeli raid that destroyed Iraq’s partially built Osirak nuclear reactor, or an Israeli raid last year on what U.S. intelligence officials said was another unfinished nuclear facility in Syria.

In Iran, multiple atomic installations are sprinkled throughout the country, some underground or bored into mountains — unlike the Iraqi and Syrian installations, which were single aboveground complexes.

Still, the Syria action seemed to indicate that Israel would also be willing to use force preemptively against Iran.

“For Israel this is not a mark that cannot be achieved,” said Maj. Gen. Aharon Zeevi-Farkash, former head of Israel’s army intelligence.

However, it’s unpromising Israel would carry out an attack without approval from the United States.

Recent signs that Washington may be moving away from a military option — including a design to open a low-level U.S. diplomatic office in Tehran and a recent decision to remit a senior U.S. diplomat to partake alongside Iran in international talks in Geneva — are not sitting very well with Israel.

That may forbear explain recent visits to Jerusalem by Mike McConnell, the U.S. director of national acumen, and Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, each of whom delivered a message to Israel that it does not have a green light to criticise Iran at this time.

Senior Israeli officials, speaking on condition of anonymity because they do not wish to appear at odds with their most important ally, aforesaid they were concerned about a possible softening of the U.S. stance toward Iran.

Apparently to allay Israeli concerns, Bush administration officials hindmost week assured visiting Israeli Defense Minister Ehud Barak that the U.S. has not ruled out the possibility of a warlike strike on Iran. And the U.S., aware of Israel’s high anxiety over Iran’s nukes, is also hooking Israel up to an advanced missile detection classification known as X-Band to guard to counterbalance any events to come fly at by Iran, said a senior U.S. defense official, who spoke without interruption plight of anonymity because the discussions over the issue be under the necessity not been made public.

With sanctions and diplomacy yet the international common’s preferred method to get Iran to forbear erection the bomb, an Israeli strike does not appear imminent.

If it did attack, however, Israel would have to contend by upgraded Iranian defense capabilities, including 29 new Tor-M1 surface-to-air missile systems Iran purchased from Russia last year in a $700 the multitude traffic.

Russia has so far not gone through with a proposed sale to Iran of S-300 surface-to-air missiles, an level more potent air defense classification than the Tor-M1. An Israeli defense official said the deal is still on the stand, however. This is a massive source of horror because of Israel because the system could significantly complicate a pre-emptive Israeli assault on Iran.

Military experts say an Israeli strike would require manned aircraft to bombard multiple targets and weighty precision bombs that can blast through underground bunkers — something Israel failed to complete in its 2006 war against Hezbollah. It’s widely assumed that Israel is seeking to obtain bunker buster bombs, if it hasn’t already done so.

Elite ground troops could also be necessary to affect the most rigid sites, though Israeli military planners say they see that option as perhaps too risky.

America’s ability to take out Iran’s nuclear facilities is far superior to Israel’s.

Unlike Israel, the United States has rove over the sea missiles that can deliver high-explosive bombs to precise locations and B-2 bombers capable of dropping 85 500-pound bombs in a single roll steady.

Yet the cost of an attack — by the U.S., Israel or both — is likely to be enormous.

Iran could halt oil production and shut down tanker traffic in the strategic Strait of Hormuz, which could send the price of crude skyrocketing and destruction Western economies.

It could stir up trouble as being the U.S. in Iraq by revving up Shiite militias there merited as Washington is showing more important gains in reining in Iraqi confusion.

It could activate its militant proxies in both Lebanon and the Gaza Strip, from whither Israel could come under heavy rocket attack. And it could strike Israel through its arsenal of Shahab-3 long-range missiles — something Israel is hoping to guard against from one side its Arrow missile defense system.

Perhaps greatest in quantity importantly, any break forth adhering Iran — especially whether it’s done without having exhausted all diplomatic channels — could have the opposite of the desired effect, “actually increasing the nationalist fervor to build a nuclear weapon,” before-mentioned Meir Javedanfar, an Iranian-born Israeli and adroit on Iranian business.

Whether an attack on Iran would be worth its cost would depend on how long the nuclear program could be delayed, reported Chuck Freilich, a former Israeli deputy public security adviser and at this moment a elder fellow at the Harvard Kennedy School.

“A couple, three-year delay is not worth it. For a five to 10-year delay I would say yes,” he said.

Booze: Who’s Drinking What Where

While much of the world consumes local hooch, many of the earth’s biggest spirits companies have made momentous inroads into new markets

by the agency of Nick Passmore

View Slide Show

Watch full size video:

The world consumed 18.3 billion liters of spirits in 2007, with China, whose thirsty citizens drank 3.7 billion liters, leading the way, according to the global place of traffic intelligence firm Euromonitor International. But dress in’t expect to have heard of any of these brands—a manhood of this tipple is limited hooch made and consumed in China.

By far the most popular category of liquor in the world was vodka (3.7 billion liters), thanks to Russia’s immense appetite in opposition to the stuff, followed by whiskey (2.1 billion liters). But fans of Dewar’s or Jack Daniel’s will be surprised to learn that most of this is not the familiar Western brands on the other hand rather Indian-made whiskeys, with some ersatz Scottish names like Bagpiper and McDowell’s. Indians consume approximately 800 million liters of whiskey, both domestic and imported, a year.

But limited labels produced purely for local markets out of the true course, which are the global brands that have established the greatest presence behind the shoal?

With the opening up of Russia and Eastern Europe, the growing prosperity in Asia and South America, and above all the Westernization of popular culture, Western spirit brands have become the drink of choice for the emerging middle class from Shanghai to São Paulo—and the order that’s leading the way is Scotch whisky.

According to Martin Riley, between nations marketing director for Chivas Brothers (Chivas Regal, Glenlivet, Ballantine’s, Royal Salute, Beefeater Gin), a division of Pernod Ricard (PERP): "These are very good ages for Scotch whisky. The uninjured world, with one or two exceptions, is really embracing it in its different forms. We are seeing growth at all levels."

He points out that Scotch whisky is the barely excite you can find in each market where it’s legal to sell turn of mind of wine, and in most markets of the world it’s the imported spirit of choice.

Blended or Single Malt?

Scotch has a major superior situation in that it is not really one but three categories of spirit—blends, super-premium blends such as Johnnie Walker Blue and Chivas Regal’s Royal Salute, and ingenuous malts—so but also if one is in decline in a particular market, another strength be growing.

An example of this is the U.S. and Britain in which place sales of blended Scotch are level piece of country or even declining while single malts are augmenting at double-digit rates. These countries both have a strong account of Scotch drinking and a knowledgeable consumer base that’s receptive to the seek reference of the case of single malts.

The U.S. is somewhat of an exception to the worldwide Scotch story in the manner that it is vodka and rum that are the big growth categories here, largely the result of the current cocktail craze, followed by the agency of tequila.

A similar pattern is emerging in Britain, where vodka recently surpassed Scotch as the top-selling spirit, yet white turn of mind are barely significant in the rest of the globe—take exception, of course, Russia, whither vodka dominates.

Not including Britain, Europe is still a huge and increasing market for the two blended and single malt whisky, with France being the world’s most avid consumer, importing 13.5 million cases a year, according to the Scotch Whisky Assn.

China Likes Its High-End Scotch

In the more established Asian markets—South Korea, Hong Kong, Singapore—Diageo’s (DEO) Chris Parsons, vice-president of the Reserve Brand Group, is seeing a significant shift to higher-end bottlings like Johnnie Walker Blue, that sells for more than $200 a bottle. "A lot of this is due to cultural aspects," he says. "They have a very high degree of gifting, and gifts are a very important look of business and the equivalent implied by the cost of the gift is reflective of status in a very meaningful way."