SNC-Lavalin’s choice of an experienced American engineering and construction executive to head the Quebec-based global giant will be well-received by investors of the beleaguered company despite some political concerns in the province that he doesn’t speak French, analysts said Monday.
Robert Card, a senior executive at CH2M Hill Companies and former undersecretary of energy in the U.S., will take the reins Oct. 1.
He was chosen after a global search for leaders outside the Montreal-based company, which has recently been mired in scandal.
Pierre Duhaime stepped down amid controversy over millions in mysterious payments in North Africa.
Card and his family plan to move to Montreal and learn French, but the naming of an anglophone to head one of the province’s marquee businesses is sure to upset some Quebecers in the midst of a provincial election campaign.
Concerns have been raised about a hostile bid to acquire Quebec’s hardware giant Rona by U.S. retailer Lowe’s.
There were also some grumblings when bilingual Ontario native Michael Sabia was chosen to head the Caisse de depot fund manager.
Parti Quebecois leader Pauline Marois said Monday that SNC should require Card to take French lessons so that at least he becomes bilingual.
SNC-Lavalin spokeswoman Leslie Quinton said the ideal candidate to head “this great Quebec institution” would speak French.
“However, at a time when the company requires strong, decisive and insightful leadership, the most important criterion was to hire the best overall candidate with significant international experience,” she said in an email.
Quinton added that the company has a global reach and that attracting someone with such extensive experience demonstrates that Montreal is an attractive international location to which such people can be recruited.
Analyst Frederick Bastien of Raymond James said Card’s appointment may not be initially well-received by the average Quebecois.
But he said shareholders should be pleased that the firm has managed to attract someone with Card’s experience and reputation.
In a report, the Vancouver-based analyst said the SNC-Lavalin board’s key focus was to identify an experienced senior leader with both an extensive background in the international engineering and construction sector and a deep understanding of the complexities of operating internationally.
“At first blush it would seem SNC accomplished just that.”
Card served as president of CH2M Hill’s energy, water and facilities division and earlier headed its government, environment and nuclear division.
Privately held CH2M Hill is a Fortune 500 engineering firm with 30,000 employees in more than 80 countries and $6 billion of revenues and has competed against SNC-Lavalin for many contracts.
Analyast Maxim Sytchev of Alta Corp Capital said investors will be pleased that SNC’s board selected an outsider to help instill a perception of instilling a clean-start to re-establish investor confidence in the company.
He said Card’s U.S. government pedigree will provide invaluable to help SNC expand its presence south of the border where it is running two private-public partnership projects.
Pierre Lacroix of Desjardins Capital Markets said the appointment of an outsider will bring fresh eyes to the company’s management and governance practices.
While the appointment is a positive catalyst, he said the market reaction will be gradual until Card outlines his strategic vision for the company.
Card and board chairman Gwyn Morgan declined requests for interviews until the new CEO assumes his duties.
On the Toronto Stock Exchange, SNC’s shares lost five cents at $37.45 in morning trading.