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Business Week Online's Hugh Filman recently was able to catch the fast-moving Jozef Straus, new CEO of JDS Uniphase, by phone at Straus's office in Ottawa. The company says this is the most extensive interview he has granted so far as CEO. Here are edited excerpts from their conversation:
Q: What is the impact of Kevin Kalkhoven resigning?
A: There is never a good time to go. The guy worked very hard, and he has made a great contribution to the company. The company is in great shape, and we have an experienced senior management in place, so he feels very comfortable passing the baton.
Q: It seems like bad timing with the E-Tek merger going on.
A: E-Tek has announced a shareholder meeting on June 28. It's better to put this departure before the shareholder meeting. If he were to leave a couple of weeks or a month later -- after the E-Tek merger is completed -- the shareholders may not be happy that it wasn't in front of them before. So, in fact, by announcing the resignation prior to the shareholder meeting, we're putting the issue very clearly on the table.
Q: Is he going to retain any role with the company?
A: Kevin resigned as CEO and also his board position [co-chairman]. Kevin stated that the right thing to do was not to look over the shoulder of the new administration. But he's going to be acting for the next 12 months as strategic adviser and will still work very closely with me. Kevin and I are great friends in this.
Q: Kevin Kalkhoven is very well known in the investment community. Do you have any concern about filling those shoes?
A: There's a Hungarian proverb: "Every circus lasts three days." We went on a road show with our investors, and we explained that our strategy has not changed. The company is going to do the same thing that we said we were going to do. So therefore all that has changed is my ugly face has come in front of the market and the street. But the company hasn't changed.
What was important was going in front of customers and investors and explaining what we're doing. The market reacted very well to our explanation. We didn't see any hiccup in the share price apart from the normal hiccup with the entire market.
Life goes on. The company is not dependent on a single individual.
Q: Will the E-Tek dynamics deal be affected at all by the company's change in its executive ranks?
A: I don't think so. It has nothing to do with executive departure. I can't comment on it. E-Tek is currently still under review by the Department of Justice. We feel very comfortable that we'll get through this.
Q: How important is the E-Tek Dynamics deal right now to JDS Uniphhase?
A: It's very, very important. E-Tek has very good products and a very good technical force, and it will allow us to make sure that our products will have more opportunity to go out to our customers. E-Tek would manufacture some of our components for our customers just to relieve any bottlenecks.
We want to do whatever necessary to ensure that customers don't have any
bottlenecks with their output -- that they can meet their demand and therefore we can grow business.
Q: What does E-Tek provide your company that you don't already have?
A: Well, apart from increased manufacturing capacity, E-Tek has offshore manufacturing opportunities in China. They are expanding very strongly. They have a different product portfolio. Different customers prefer sometimes different technological solutions to the same problems. Sometimes E-Tek solutions may take preference to our solutions.
Also to some degree, E-Tek provides a considerable pool of talent to develop new products for optical networks. This is very much an important part of our merger. It's very difficult to get talent. E-Tek's technical force will be a very strong contributor to the development of new products.
Q: Is it essential for this merger to go through for your company to keep growing at the rate it is?
A: It is very much important for the overall industry because we think that by us merging together, we will provide increased capacity and faster product development to the market. Of course, it's important for us for our organic growth. But it's also important for our customers to realize that we will be able to provide larger volume, faster, and at lower cost.
In this high-tech world, what's important is to have the right solution at the right time for customers. High technology is a wavy business: You miss the wave, you get swamped.
Q: Why has your company done well?
A: It's very important to recognize the changes and evolution in the
marketplace -- networking, system changes. Every six to nine months, there is a new system, a new way of transmitting more information at lower cost. We recognized this very early on.
Q: Will E-Tek give you enough capacity and range of products?
A: It's never enough because technology is always evolving. You always have to look beyond the horizon and can never be complacent -- God forbid we become complacent. We have done nine mergers and acquisitions in the last year. E-Tek was one. But we continue scanning the horizon for new technologies and new abilities to serve our customers better.
Q: Are you planning any other acquisitions beyond E-Tek right now?
A: Planning, planning. It's like every morning I wake up and say, "what shall I eat." We always have to look at what we need to do to complement our product line and technology. If there is something on the market that allows us to serve our customer better, we won't shy away from acquisition or technological cooperation.
EDITED BY THANE PETERSON
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