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Ericsson says chairman to step down

STOCKHOLM (Reuters) - Ericsson ERICb.ST said its chairman, Michael Treschow, will step down next year or in 2012 after helping steer the world's biggest mobile networks maker through the market downturn and a phase of industry consolidation.

Michael Treschow, chairman of Ericsson, attends a forum in Boao, south China's Hainan province April 22, 2006. Ericsson said its chairman, Michael Treschow, will step down next year or in 2012 after helping steer the world's biggest mobile networks maker through the market downturn and a phase of industry consolidation. REUTERS/Stringer/Files

Treschow, who was appointed chairman in March 2002, said now was the right time to hand over the reins to a successor, who will be appointed at the annual general meeting either in 2011 or in 2012.

“I have begun to think about the fact that I have been here for nine years and that now, with Ericsson in a strong position, is a good time to go,” Treschow told Reuters.

Treschow, who is also chairman of food and consumer products group Unilever ULVR.L and sits on the board of engineering group ABB ABBN, said going forward Ericsson needed to maintain its strong market position in networks and services and turn around its struggling multi-media business.

Ericsson has weathered the global downturn and tougher competition in the network gear market relatively well.

The last two years has seen it slash costs as revenues across the industry slumped. But it has also kept hold of its leading market position and has capitalised on the tough times as others have suffered and picked up the bulk of bankrupt Nortel Networks operations as well as other assets.

As chairman, Treschow also oversaw a regime change with the departure of long-serving chief executive Carl-Henric Svanberg and his replacement at the start of this year by Hans Vestberg.

A new chairman is likely to have an easier time with markets recovering and Ericsson now a much leaner firm, though competition -- especially from Chinese rivals -- remains tough.

Shares in Ericsson were down 0.9 percent at 73.95 crowns at 1011 GMT, underperforming a flat European Technology index.

“This (Treschow’s departure) was definitely not unexpected and I think it will happen already in 2011,” said Helena Nordman-Knutson, an analyst at Ohman Fondkommission.

She said that one candidate for the post would be former Ericsson CEO Svanberg, though a chairman could be appointed from Ericsson’s current board.

Svanberg, who left Ericsson at the start of 2010 after seven years as the company's top executive, has had a tough time in his new job as chairman of British oil giant BP BP.

He was widely criticised for taking a low-profile approach after one of the company’s wells spewed millions of barrels of oil into the Gulf of Mexico and for an English-language gaffe after the spill, which is likely to cost BP around $40 billion and pollute the environment for years to come.

Treschow was involved in appointing Svanberg and current CEO Hans Vestberg. He also steered a $4.3 billion rights issue to completion.

Nordman-Knutson said she expected Investor INVEb, the holding company of the Wallenberg family and Ericsson's top shareholder, would be "very active" in the process of nominating a new chairman.

Writing by Simon Johnson and Niklas Pollard; Editing by Louise Heavens and Jon Loades-Carter

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