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Business

Public, Confusing Search for Deutsche Telekom Chairman

The German government is reportedly unhappy with the way interim Deutsche Telekom chairman Helmut Sihler and chairman of the board Hans-Dieter Winkhaus is handling the confusing, misleading search for a successor.

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Telekom is on the search for a new chairman

The search for a new CEO of Europe’s largest telecommunication company has been anything but a quiet affair.

Names of potential successors to interim CEO Helmut Sihler at Deutsche Telekom have been reported widely on an often daily basis, accompanied often by loud denials on both sides. A reported 20 potential successors, among them Porsche head Wendelin Wiedeking, Deutsche Post chairman Klaus Zumwinkel and Ulrich Schumacher of chip-maker Infineon, have so far turned down being considered for the job at the troubled telecommunication firm.

The lists have been widely criticized by both Telekom chairman of the board Hans-Dietrich Winkhaus and officials in the government. But for different reasons.

Winkhaus, who together with the 72-year-old Sihler is heading the search, has called the media reports “disruptive” and defended Telekom’s search.

“You can’t do things more discretely, better and quicker than we have done them,” said Winkhaus. The current candidate list is reportedly down to five, with a selection due most likely in December.

Government reportedly unhappy

Recent reports suggest government officials think otherwise. The weekly “Welt am Sonntag” newspaper reported that Chancellor Gerhard Schröder had asked his economics minister to take personal responsibility for the search for a new chair, and that there was widespread dissatisfaction with the way Winkhaus was handling the job. Members of Schröder's party told the newspaper that the government said the selection process was too chaotic.

The government, which has a 43 percent stake in Telekom, and Winkhaus have denied the report.

Analyst Robert Vinall at DZ Bank in Frankfurt said it’s only natural that Schröder’s government should put pressure on Winkhaus and Sihler.

“Instrumental in getting Ron Sommer out was the key that there was going to be a smooth transition to the new head,” he said in a DW-WORLD interview.

Sommer left the company in July after Telekom amassed a 64 billion euro debt and the company’s stock dropped to an all time low. Sihler, the former chairman of a chemicals company, quickly took over.

He announced a strict and unpopular savings course that, among other things, would cut the 255,000-strong workforce by 50,000 jobs. He also said he would be leaving in January to make way for a younger chairman.

“A very tough job ahead of him”

Now the pressure is on and the list of replacements reportedly down to five candidates. The next chairman will have a mammoth responsibility in front of him. Saddled with a heavy debt and facing job cuts, Telekom looks to be a tough assignment. Sihler has already cut the advertising budget and plans to do the same to the travel budget, according to reports.

A complete list of measures will be unveiled at a meeting on Nov. 14 when Telekom presents the results of a strategic review. The new CEO should be in place a month after that.

“I think it’s fairly likely that a lot of the unpopular decisions will have been announced by then,” said Vinall. The burden then comes to this new person to push through the decisions and I think the new person will have a very tough job ahead of him.”

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