New WorldCom exec vows to bring carrier out of bankruptcy
- By William Jackson
- Nov 15, 2002
Michael Capellas, the 'self-proclaimed geek' picked to take over WorldCom Inc., said he plans to bring the troubled telecommunications carrier out of bankruptcy as soon as possible.
'There is no intention of breaking up the company and selling the parts,' Capellas said during a press conference today announcing his selection as company chairman, president and CEO. 'The goal is to come out intact.'
He said he plans to accomplish this by focusing on service delivery to present customers and aggressively seeking new business.
WorldCom, which sought Chapter 11 bankruptcy protection in July, is a major provider of telecom services to the government under the General Services Administration's FTS 2001 contract. GSA earlier this week announced it had exercised the first one-year option of the eight-year contract, extending it to January 2004.
Capellas, the former CEO of Compaq, comes to WorldCom directly from Hewlett-Packard Co., where he became chief operating officer after HP's acquisition of Compaq.
'I have been in the IT business all my life,' Capellas said today. He said WorldCom's extensive infrastructure, which includes the UUNet Internet backbone as well as its voice communications network, is its greatest asset.
'Although the business model has gotten a little messed up,' the converged Internet, telecommunications and computer industry still will continue to be a driver of the world economy, Capellas said.
Despite the company's growing financial problems and the indictment of several former executives, Capellas said the company, which has 20 million customers and 65,000 employees, is fundamentally strong. It has achieved a positive cash flow and built up a cash reserve of more than $1.5 billion in the last few months. But bringing the company out of bankruptcy still presents major challenges, Capellas acknowledged.
'It was the challenge that intrigued me, no question about that,' he said. 'If I didn't believe in taking on tough jobs, I wouldn't have taken the last two or three I've had.'
Capellas will take his new position, replacing interim CEO John Sidgmore, Dec. 2, pending bankruptcy court approval. He already has the support of the creditors' committee.
William Jackson is a Maryland-based freelance writer.