3Com's new chief to be based in China

Network equipment maker 3Com announced Wednesday a new CEO who will be based in China.

Robert Mao, 64, will succeed Edgar Masri as chief executive officer. Mao, who is fluent in Mandarin and English, had most recently been 3Com's executive vice president for corporate development. Prior to working at 3Com, he headed up Nortel Network's China operations. And before that he had worked for the French telecommunications equipment maker Alcatel, which is now Alcatel-Lucent.

3Com also said Wednesday that it has hired Ronald Sege, 51, as chief operating officer. Sege, who will run 3Com's U.S. operations, returns to 3Com after a decade. From 1989 to 1998, Sege held several senior executive positions at 3Com. Most recently he had been CEO of the Wi-Fi equipment maker Tropos from 2004 until this year.

The news of the management shift comes after the U.S. government essentially put the kibosh on a proposed $2.2 billion buyout of 3Com by Bain Capital Partners and Huawei Technologies.

Bain Capital had originally agreed to buy 3Com in September 2007 in a deal that would have given Huawei Technologies, which is based in China, a 16.5 percent stake in the company. As part of the deal, Huawei would have had the opportunity to increase its share by another 5 percent.

The Bush administration had raised security concerns over the deal. 3Com makes network security equipment that is sold to the U.S. Department of Defense. The government has traditionally been leery of allowing foreign ownership of critical communication assets.

Last month, after the Committee on Foreign Investment, an official security panel under the U.S. Treasury Department essentially blocked the deal, Bain Capital Partners withdrew its bid for the company.

3Com, which was founded in 1979 by the Ethernet inventor Robert Metcalfe, helped shape the early Ethernet and IP networking market. The company had many successes over the years, including the spin-off of the handheld device company Palm. But over the last decade, the company has lost much of its luster and market significance as competitors, namely Cisco Systems, have risen in importance.

Despite the company's decline over the years, 3Com has survived. And in recent years, it has recognized China as a key emerging market. In 2003, it formed a joint venture with Huawei to better serve the Chinese market. And in November, 3Com paid $882 million to buy Huawei's 49 percent stake in the venture. Today, about 4,000 of 3Com's 6,000 employees are based in China with only a little over 400 employees working at its U.S. headquarters in Massachusetts.

3Com's decision to put Mao in charge is yet another signal that the company sees China as its most important market.

"In addition to his 30 years in the global IT and telecommunications industry, Bob's bi-cultural background, extensive business experience in Asia and fluency in Mandarin and English offer a rare set of skills that can bridge Chinese and western organizations," Eric Benhamou, chairman of 3Com, said in a statement. "Bob brings the company a set of skills that are uniquely fitted to 3Com's current business needs. Having him based out of China and having an experienced leader of Ron's caliber based in the United States will allow us to speed execution of our global business plan."

(CNET news.com)