If thrilling days haven't quite returned, at least

Lucent's

(LU)

"lone ranger" has

made her last ride.

Downer
Lucent shares' steep decline

After Sunday's departure of CFO Deborah Hopkins, observers inside and outside the telecom gear maker expect successor Frank D'Amelio to inspire a downtrodden workforce and investor base that has been pummeled by a year of financial and operational free fall. D'Amelio, 43, has been with Lucent for 22 years and has won the trust of workers with his people sense, say observers inside and outside the company.

Hopkins, 46, failed to score points with either Lucent's workers and or with Wall Street, observers say. To Lucent insiders, Hopkins was a hard-charging executive whose interest in the company often appeared limited to gunning for the CEO job. Meanwhile, to Wall Street, Hopkins was a source of frustration, offering precious little detail at a time of great unease about Lucent's prospects.

To be sure, Hopkins was handed, by nearly all accounts, the nearly impossible assignment of bringing financial discipline to the nation's top network equipment maker at a time when Lucent was still early into its financial and operational morass. And it didn't help that she was handpicked by CEO Rich McGinn, who was later ousted in October. Still, some of Lucent's most damaging events took place on Hopkins' watch, including the misrecording of revenues, which has drawn a

Securities and Exchange Commission

investigation.

Ice-Ball to the Ear

"My best guess is that she and

Chairman and CEO Henry Schacht had a parting of the minds on a going-forward strategy," says

Lehman Brothers

analyst Steve Levy, who has a hold on Lucent and whose firm hasn't done banking for it.

Hopkins departs

Hopkins was unavailable for comment Monday. In her parting statement Sunday, she said: "It's the natural time for me to leave and pursue other opportunities."

Levy doesn't agree. "There is nothing 'natural' about the timing of her leaving," says the analyst. "This is not the time for a CFO that is supposed to be leading a major turnaround/restructuring to check out."

Lucent shares were down 68 cents, or 6%, in midday trading Monday.

Hopkins arrived at Lucent in April 2000 after abruptly leaving the CFO job at

Boeing

(BA) - Get Report

, where she was engineering an attempted turnaround. She was at Boeing for 16 months when she left, prior to that she was with

General Motors

(GM) - Get Report

and

Unisys

(UIS) - Get Report

.

While at Boeing Hopkins didn't hide her ambition to become CEO of the nation's leading aircraft manufacturer. Some observers say she had similar goals at Lucent, which may have rubbed insiders the wrong way. Lucent, an

AT&T

(T) - Get Report

offspring, has honed a tradition of bringing executives up through the ranks.

Limping Away

The rub was obvious to anyone who worked with Hopkins, say insiders and former Lucent employees.

"She was extraordinarily difficult to work with. I think she believed that everyone at Lucent was dumb and dishonest," says a former Lucent executive who departed during Hopkins' tenure. "She was a lone ranger. Her only agenda was to be CEO of Lucent someday."

Hopkins also didn't score many points with Wall Street. Even during the most recent earnings conference call, analysts were

confounded by her tight grip on even the most basic financial information.

When she did speak to the investment community, her comments occasionally triggered alarms. For example, in October, when the Street was starting to see Lucent's loans to customers as a risky proposition, Hopkins said the practice would figure strongly in Lucent's future.

Lucent committed $7 billion in loans to customers to finance equipment sales, a practice that started well before the Hopkins era but was expected to be wound down. But risk multiplied as customers grew insolvent, as

Winstar

demonstrated last month in filing for bankruptcy protection, leaving Lucent on the hook for $500 million in loans outstanding.

In October, Hopkins said Lucent "must run

vendor financing like a bank and really think about it from that perspective."

While it's not clear yet what new CFO D'Amelio will do about Lucent's lending business or other financial practices, observers say he brings a respected leadership, earned over his years with the company. This trait should serve him well.

"People at Lucent will do extraordinary things, but they need a leadership team that inspires confidence," says the executive, who asked not to be named. "That's what Frank will bring to the table. They will walk on

hot coals for that guy.

"Really good executives are intuitive; they know the good, the bad and the ugly, and they know how to maximize the good and minimize the bad and ugly. That's what a good executive can do," says the unnamed executive. "But she was utterly clueless when it came to those kinds of things."