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Nokia Hit by Loss of Top Networks Execs
December 03, 2004 07:47:00 AM ET

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20041203&ID=...

By Brett Young

HELSINKI (Reuters) - Nokia said the head of its networks unit had resigned and another senior networks executive left, marking the second round of departures of top management in two weeks at the world's top mobile phone maker.

Nokia, which is also a major wireless infrastructure producer, said on Friday that mobile networks head Sari Baldauf would leave the firm and be replaced by Australian-born Simon Beresford-Wylie, 46, current head of the unit's Asia operations.

In a separate statement it said another senior networks official, Jukka Bergqvist, had resigned, triggering concerns about continuity at the unit which recently recovered from big losses from the sector downturn between 2001 and 2003.

``Any way you look at this it is negative, because Baldauf is a star, as is Bergqvist. They have complemented each other, Bergqvist with his technological know-how, Baldauf with her marketing skills,'' said analyst Helena Nordman-Knutson at Ohman.

Nokia said both executives left for personal reasons.

``It's very much Sari's personal decision,'' Chief Executive Jorma Ollila told a news conference. ``(But) we have a strong organization and we're well-prepared for the transition.''

Ollila, eschewing his usual ebullient tone and reading from handwritten notes, said Baldauf had first approached him about leaving some three years ago, but the move was delayed in the wake of the Sept. 11, 2001 attacks and the sector downturn.

Ollila and Baldauf both denied that the move was linked to news this week that Nokia won only a small part of a networks deal with U.S. operator Cingular, with Ericsson, Lucent and Siemens taking bigger stakes.

Baldauf, 49, joined Nokia in 1983 and had led networks since 1998. Tapped by the Financial Times as the most influential woman in European business, she was widely seen as a strong candidate to replace Ollila when his contract ends in 2006.

But she told the news conference she had never wanted Ollila's post. ``That has never been my aspiration.''

Nokia's shares were down 0.95 percent at 12.53 euros by 1235 GMT, underperforming a softer sector index.

GROWING LIST

The announcements come less than two weeks after the departure of another senior management executive, Matti Alahuhta, who left to lead lifts maker Kone.

The exit of Alahuhta, who led Nokia's mobile phone unit for years and last year became head of strategy, caused some ripples in the market, given his longstanding tenure at the firm.

But analysts also said that as Alahuhta was left without leadership of a business when Nokia expanded to four units from three at the start of the year, the move was not a total shock. He was replaced by Nokia R&D unit head Tero Ojanpera.

The moves cap a turbulent 15 months for Nokia management, with an organizational revamp at the start of the year bringing in three new bosses for four of its units, as well as a new chief financial officer, Rick Simonson.

But Ollila said Thursday's changes would likely be the last for some time. ``If you want to know if there will be more top executive changes, I wouldn't spend too much time investigating it. It is a bad investment,'' he said.

The arrival of Beresford-Wylie at Networks marks a further injection of non-Finnish management to the company. He joins CFO Simonson and the head of Nokia Enterprise Solutions unit Mary McDowell, both U.S. citizens.

(Additional reporting by Laura Vinha, Niklas Pollard in Stockholm and Lucas van Grinsven in Amsterdam)

© 2004 Reuters