3Com, the U.S. networking vendor now looking to operations in China for a competitive edge, has named a new CEO who will be based in that country.
The new CEO, Robert Mao, will replace Edgar Masri, who is leaving the company after less than two years. But in what may be a promising sign for 3Com, former longtime executive Ron Sege is returning as president and chief operating officer.
3Com struggled for years against larger rival Cisco Systems, but in 2003 it formed H-3C, a joint venture with Chinese networking giant Huawei to develop and build products in China for both that market and the rest of the world. In late 2006, under Masri's leadership, it bought out Huawei's share in the venture. H-3C didn't go far toward re-establishing 3Com's market share in the U.S., but the company says it now has a dominant market share in China. Last year, Masri said the difference in salaries between China and other countries created an "arbitrage opportunity" for 3Com.
More recently, Bain Capital and Huawei proposed acquiring 3Com, but the deal fell apart. Concerns over 3Com security technology getting into the hands of Huawei, which is linked to the Chinese government, raised a hurdle to the deal.
Mao's appointment will help support 3Com's growing and profitable China operations, 3Com said Tuesday. Now 64, Mao led Nortel Networks' business in greater China from 1997 to 2006 and most recently was 3Com's executive vice president of corporate development. He is fluent in both Mandarin and English, 3Com said. Mao earned a master's degree in material science and metallurgical engineering from Cornell University and a master's degree in management from the Massachusetts Institute of Technology.
Sege, 51, will be based in the U.S. and will focus on 3Com's operations outside China, reporting to Mao. He worked at 3Com from 1989 to 1998, including as executive vice president of its Global Systems Business Unit. Most recently, Sege was president and CEO of Tropos Networks, a wireless mesh equipment vendor. Sege will re-join 3Com on April 30.
Sege will also join 3Com's board of directors. Mao will remain on the board, which is led by former 3Com and Palm chief executive Eric Benhamou.