U.S. President-elect Barack Obama isn't the only one assembling his management team under intense scrutiny of numerous spectators. 

For Ben Verwaayen, Alcatel-Lucent's new CEO, the crowd may not be quite as large nor the stakes quite as high, but his moves are being closely watched by an industry facing a global economic meltdown. (Alcatel-Lucent Taps Verwaayen as CEO)

Alcatel-Lucent, the largest telecom products company in the world, announced on Wednesday that it chose American Paul Tufano to replace Frenchman Hubert de Pesquidoux as CFO of the Paris-based telecommunications giant.

The choice of Mr. Tufano is the latest in a string of appointments of outsiders to top posts at Alcatel-Lucent, a company formed from the 2006 trans-Atlantic merger of French company Alcatel and its U.S. rival Lucent.

The post of CFO looms large at Alcatel-Lucent because of the changing economics of the overall industry, and the company’s financial implosion in the wake of the merger. (Alcatel-Lucent CEO Faces High Expectations)

The company posted six consecutive losing quarters, and shareholders have grown more nervous as the company’s stock has languished.

Alcatel-Lucent faces a rapidly changing market. The industry has consolidated so there are far fewer service providers, the companies Alcatel-Lucent sells to, and fewer rivals. (Alcatel-Lucent Calls for Overhaul)

But intense competition from low-cost producers in China and from aggressive U.S. companies and Europe is forcing Alcatel-Lucent, a company with a large legacy business in emerging markets, to adapt its business.

Gone are the days when most carriers were building fiber-optic and wireless networks from scratch, demanding thousands of pieces of expensive, heavy equipment.

“Rewiring the U.S. for the third or fourth time is not exactly a profitable undertaking, service providers already built their networks now they are upgrading on the edges to new technologies like LTE,” said Joe Nordgaard, director of wireless consulting firm Spectral Advantage.

Alcatel-Lucent must now change internally to match the new external realities of its market, he said.

Two weeks ago the company announced the formation of three new geographical groups with new leadership. Two of the three group heads, Robert Vrij and Adolfo Hernandez, were new hires.

The company also announced three new functional groups and four new product and services groups.

The company has given the new groups more autonomy and shaped their jobs so they are more accountable for promoting innovation and customer service.

Mr. Tufano was formerly at IBM and most recently CFO of Solectron, a management services company that was acquired by Flextronics on July 2007.

Source:redherring