A tall man tackles tall order at Corvis

Fiber optics: Corvis Corp. has technology, but too few customers, and now a new president has arrived with the credentials to remedy things.

September 29, 2002|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

There's a new royal-blue lab jacket that hangs with all the others on the rack at Corvis Corp., only this one was custom-ordered to fit the lofty build of the company's new president, James M. Bannantine.

At 6 feet 5 inches tall, Bannantine still has the frame from when he coached and played volleyball years ago, and he is quick to offer jokes about the Corvis basketball team. But he is not at this Columbia fiber-optics company for a game; he is there to triumph over a challenge, and a new lab coat isn't the only thing he hopes to bring to the company.

"I wouldn't want to come in to be a caretaker," Bannantine said. "I wanted to come in to make an impact."

Bannantine has his work cut out for him. Analysts say Corvis needs more customers (it has five), and some think the company's technology is too far ahead of its time. Also, the entire telecommunications sector is struggling with cutbacks and layoffs like never before.

Bannantine faces "very, very serious challenges," said Simon Leopold, a telecommunications equipment analyst and a vice president for Merrill Lynch & Co. Inc. in New York.

Corvis makes equipment for fiber-optic networks, which carry voice and data. Since the company was founded five years ago, its stock rose to a high of $108.06 in August 2000 and has now fallen to less than $1. And its staff has been chopped nearly in half, to about 900, with more job cuts overseas on the way.

Most recently, it paid about $49 million in stock to acquire Dorsal Networks, a company that brought Corvis technology for the undersea optical networking market but did not bring Corvis any customers.

Bannantine said Corvis has "no place to go but up." That was part of what drew him to the company.

So, beyond the racks of telecommunications equipment and the hum of the lab where workers wear blue lab jackets to keep static electricity from damaging the machines, the 46-year-old executive is trying to make his imprint.

Bannantine said he has increased Corvis' focus on being a small company and erased some of the divisions between departments, mingling the sales force with engineering. He oversees sales and marketing, customer service, finance and business development, while the company's founder, chairman and chief executive officer, David Huber, handles research and development, engineering, technology and long-term vision for the company.

Some critics wonder whether Huber - who has the reputation of holding his ventures close to his vest - will relinquish that much control of the company he founded and brought public with a stunning $1.1 billion initial public offering July 28, 2000.

"I've just got to believe when push comes to shove, he'll be the final decision-maker. How else can you look at it? He's the major stockholder," said Mark Lutkowitz, vice president of optical networking research for Communications Industry Researchers Inc.

Bannantine says he has full responsibility and control of the day-to-day operations of the business, while coordinating with Huber on areas such as engineering and sales.

"We work very closely together as a team," Bannantine said. "We consult on a regular basis."

So Bannantine has become Corvis' new "operations guy," with a background that is heavy in business and finance but light in telecom.

A 1978 graduate of the U.S. Military Academy at West Point with a master's degree in business administration from the University of Pennsylvania's Wharton School of Business, Bannantine spent 12 years in the Army Corps of Engineers working in engineering and construction, and commanding troops.

At West Point, Bannantine went on to teach economics and finance. He also coached volleyball there and at the University of Pennsylvania, which might explain why he likened his first senior staff meeting at Corvis to a coach giving his team a pep talk.

Bannantine grew up outside Bakersfield, Calif., and has lived in South Korea, Brazil and England. Most recently, Bannantine, who speaks Spanish and Portuguese, oversaw 4,500 employees as chief executive of Enron South America.

He left Enron in January last year - before the corporate scandal there came to light - and founded Acumen Capital LLC, a Texas-based private equity firm that invested in energy assets.

Bannantine joined Dorsal Networks, a Columbia-based undersea telecommunications equipment company, last September as its chief executive, lured by the prospect of combining deal-making with running the day-to-day operations of a business.

In January, Corvis announced that it would buy Dorsal in a stock deal valued at about $90 million. When the acquisition closed in May, it was valued at about $49 million.

"What interested me personally was Corvis' technology and vision have clearly been recognized as cutting-edge, industry-leading," Bannantine said.

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