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UPDATE 2-Cargotec hires man behind Finnair turnaround as CEO
January 28, 2013 / 11:17 AM / 5 years ago

UPDATE 2-Cargotec hires man behind Finnair turnaround as CEO

* Mika Vehvilainen to start in March at Cargotec

* Cargotec shares up 2.6 pct, Finnair down 1 pct (Recasts with market reaction, analysts’ comments)

HELSINKI, Jan 28 (Reuters) - Finland’s Cargotec has hired Finnair boss Mika Vehvilainen as its new chief executive, hoping he can replicate his successful turnaround of the airline at the cargo-handling equipment maker.

Cargotec, which has struggled in recent years as shipping companies and ports cut back on investment, announced the appointment on Monday.

Last year, Cargotec demoted CEO Mikael Makinen to head the company’s marine unit, which plans to list on a stock market in Asia.

Shares in Cargotec were up 2.6 percent to 21.96 euros by 1114 GMT on investors’ hopes that Vehvilainen, who is due to start his new job in early March, will increase the pace of change at the company.

“He has done a good job at Finnair and that raises expectations on Cargotec shifting into new gear,” said Pohjola Bank analyst Pekka Spolander.

“The company must step up efforts to expand in growing markets,” Pareto analyst Jari Harjunpaa said.

Job cuts at Cargotec and a shift in production to countries such as Poland from Finland and Sweden have done little to improve profitability.

Shares in Finnair fell 1.0 percent to 2.95 euros.

Under Vehvilainen’s leadership from 2010, Finnair has significantly cut costs and focused on expanding more profitable Asian routes. The carrier expects to have made a profit last year for the first time since 2008.

Last year Vehvilainen made headlines when he was the target of a police investigation for suspected bribe-taking related to a real estate deal. He was found innocent, but said he regretted making the arrangement.

Vehvilainen has also worked at Nokia and its telecoms equipment joint venture Nokia Siemens Networks . (Reporting By Jussi Rosendahl and Terhi Kinnunen; Editing by Erica Billingham)

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