WorldCom`s New CEO Quietly Begins Work
JACKSON, Miss., Dec 02, 2002 (AP Online via COMTEX) -- WorldCom Inc.`s new chairman and CEO Michael Capellas quietly slipped into his new role Monday.
Capellas, who has chosen to work out of WorldCom`s Asburn, Va. office instead of the company`s Clinton, Miss. headquarters, granted no interviews and aides refused to discuss the agenda for his first day on the job at the bankrupt telecommunications giant.
Capellas is expected to spend the next several weeks burrowing into the company`s corporate culture before making any more bold public pronouncements. When Capellas announced several weeks ago that he was leaving the No. 2 job at Hewlett Packard Co. to head WorldCom, he said he would lead it out of bankruptcy and do it without a clean sweep of management or breaking up the company or losing major corporate accounts.
"Now his task is to get the lay of the land from the inside, and I think for the next few weeks he will be measuring the mettle of his lieutenants, putting together his slate of board candidates and in his spare time learning the business," said Frank Dzubeck, a telecom strategy consultant and president of Communications Network Architects in Washington, D.C.
At the same time, Capellas will be under pressure to find a way to cut costs so that WorldCom - which has admitted to more than $9 billion in accounting fraud - can find a formula to become profitable and emerge from the biggest bankruptcy ever filed. Industry analysts expect Capellas to try to exit some of the carrier`s bandwidth contracts with competitors and shed noncore assets.
"I don`t see major changes over the next several weeks, but just shoring up the business and stemming the flow of customers away from MCI would be a major contribution," said F. Drake Johnstone, a telecom analyst with Davenport & Co., a Richmond, Va. brokerage firm.
Capellas`s freedom to impose his own strategic plan on WorldCom became even more limited last week. Already under the eye of two federal judges and its creditors, WorldCom agreed to a partial settlement of fraud charges with the Securities and Exchange Commission that gives greater oversight powers to court-appointed monitor Richard Breeden.
"This is the worst management nightmare that any new CEO has ever faced, but he`s bobbing and weaving between these enormous power blocs and he`s showing great leadership," said Jeff Sonnenfield, associate dean at Yale University School of Management and head of its Chief Executive Leadership Institute. "He is somebody that is noted not only for his tenacity but for his humility, which may be his greatest asset."
By BARBARA POWELL Associated Press Writer
Copyright 2002 Associated Press, All rights reserved
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