RIM CEO says company will 'bounce back' 0
The headquarters of BlackBerry maker Research in Motion in Waterloo.(KATE DUBINSKI/QMI AGENCY)
WATERLOO, Ont. - Before any gains, more pain.
The new CEO of Research of Motion (RIM) tried Tuesday to reassure disgruntled shareholders the floundering tech giant will bounce back.
But Thorsten Heins warned RIM's annual meeting the company will bleed more cash until it launches the new Blackberry 10 system next year.
"We are working around the clock to complete the transition process. The past year has been very difficult for RIM," said Heins.
Heins said he would not compromise on a plan to hold off the launch of the new Blackberry 10 system until next year.
"We will not deliver a product that will not meet expectations. There will be no compromise on this issue," he said.
It's a message that did not sit well with Vic Alboini, an activist RIM shareholder and CEO of Jaguar Financial.
"Highly disappointing. It looks like a sad company right now that needs a major fix," said Alboini.
Alboini said it is time to consider selling all or parts of the company and inviting major investment from Microsoft or Facebook.
Alboini said Heins is gambling the company's future on one new product.
"What happens if Blackberry 10 doesn't work out? What happens then? We don't want to put all our eggs in one basket," Alboini said after the meeting.
Alboini arrived in a limousine but most of the people at the meeting appeared to be older middle-class investors.
The company's slate of directors were all elected despite call by Alboini and others for a major shakeup.
One long-time investor was applauded at the meeting when he called for a removal of all the long-serving directors.
"Why did they let it get out of hand so badly?" asked Phillip Rason.
Another shareholder questioned Heins $1-million salary and his lack of experience as a CEO.
Heins replied that has lead several huge divisions of Siemens AG in Europe.
RIM's share price has tumbled more than 70% in the past year, down to about $8, including a 19% plunge, when it recently announced a $518 million quarterly loss and plans to lay off 5,000 employees, almost a third of its global workforce.
Even more damaging was an admission that the launch of a smartphone running the new Blackberry 10 operating system would again be delayed allowing Apple and other competitors to snatch up more market share. RIM's share of the U.S. market has fallen to 11%.
The annual general meeting was the first chance for shareholders to question RIM's new chief executive and other new executives.
The company's co-founders, Jim Balsillie and Mike Lazaridis, stepped down in January under intense pressure although Lazaridis continues to sit on the RIM board.
Heins reminded the meeting that Blackberry still has 78 million subscribers and the potential to expand in Asia and Latin America.
Hei said the company is planning to save $1 billion, by laying off 5,000 employees and going from 10 manufacturing sites to three.
But while the cost-cutting goes on, Heins said he is still expecting another loss in the second quarter.
"I realize this is a frustrating time for our shareholders," said Heins.