Ericsson chief executive removed

The chief executive of Ericsson, one of the world's largest manufacturers of mobile telephones, has been abruptly removed amid…

The chief executive of Ericsson, one of the world's largest manufacturers of mobile telephones, has been abruptly removed amid boardroom impatience over the restructuring of the Swedish telecommunications group.

Mr Sven-Christer Nilsson, chief executive for only 15 months, agreed to stand down as the company announced plans to speed up a wide-ranging overhaul.

News of Mr Nilsson's departure caused consternation in Stockholm, where one investment banker said the company "was definitely in play and could attract a bid".

Although based in Sweden the company has operations in the Republic and employs 1,800 between its Athlone, Dun Laoghaire, Clonskeagh and IFSC activities.

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Ericsson's most commonly traded B shares fell 8 per cent as analysts voiced fears over the strategic direction of Sweden's single largest exporter.

The company, which said it required stronger leadership, appointed Mr Lars Ramqvist, its chairman and former chief executive, to take over.

Mr Nilsson was blamed for failing to restructure Ericsson quickly enough, even though he responded to two profits warnings earlier this year by announcing more than 11,000 job losses - or 10 per cent of the workforce.

Ericsson has stumbled in the two most important current areas of telecommunications manufacturing - the move to networks based on Internet technology where companies such as the Canadian multinational Nortel Networks are making the running, and mobile phone handsets, where it has been outstripped by Nokia of Finland.

Last year Nokia sold 40.8 million units worldwide, compared with 25 million units for Motorola of the US and 24 million for the Swedish company.

However, Mr Ramqvist told a news conference the company was not in crisis. `The restructuring programme remains firm. We will take a number of measures which aim to increase profitability," he added. Mr Ramqvist admitted the group's second-quarter figures would "not be especially good", but cautioned against any suggestion of a third profits warning.

The board of Ericsson, due to announce its first half figures later this month, said Mr Ramqvist would be supported by a new group president, Mr Kurt Hellstrm, the head of its Asia-Pacific operations.

Several analysts suggested the reshuffle had been orchestrated by Investor, the main vehicle for Sweden's Wallenberg family, which controls 22 per cent of Ericsson's voting rights.

Mr Marcus Wallenberg, chief executive of Investor, sits on the Ericsson board. He has made clear that companies in the Investor portfolio were under pressure to improve profitability.

The board said: "There is now a need for increased pace in the restructuring efforts to secure Ericsson's profitability."

Mr Nilsson wanted time to deliver the necessary changes, but time ran out. Although clearly on top of the technical side of the business there had been growing doubts about his ability to deliver change. The board thanked him "for his valuable contribution," but then cut the connection.