Ericsson investors applaud new chief

Carl-Henric Svanberg (L) is taking over from Kurt Hellstrom (R)

Shares in Ericsson, the Swedish firm that makes mobile network technology, have jumped after the firm unveiled a new chief executive.

Carl-Henric Svanberg, currently head of the lock making company Assa Abloy, will take over in April when the present chief Kurt Hellstrom retires.

Like many of its rivals, Ericsson has been hit by falling demand for telecoms equipment and is currently in the middle of a big cost-cutting exercise.

On Monday, it said it had made a pre-tax loss of 2.2bn kronor (£157m; $257m) during the last three months of 2002.

Sales were down by 23% during the quarter, and by 36% for the year as a whole.

Respected

Ericsson's shares jumped by as much as 16% on Thursday following news of Mr Svanberg's appointment, but settled back to close up 4.2%.

"It is positive for Ericsson and the market that the issue (of succession) is solved," said Marianne Nilsson, fund manager at Sweden's biggest fund, Robur, which has 3.3% of Ericsson voting rights.

"Our view is that Svanberg is a person with good management skills, well-known and with international experience."

Mr Svanberg will have to oversee Ericsson's cost-cutting programme which aims to reduce the company's headcount to below 60,000 by the end of this year.

Ericsson employed about 64,000 people at the end of 2002.