Angry Marconi shareholders are demanding the appointment of an independent chairman after the debacle of the company's disastrous profits warning.
Shares in the telecom equipment manufacturer more than halved when they returned from suspension yesterday, collapsing 132.5p, to 112.5p, and wiping £3.7bn off the company's market value.
Marconi's research and development site in Poole, Dorset, is to close under the restructuring plan, with the loss of 570 jobs, it emerged yesterday. About 1,500 of the 4,000 announced job losses are expected to fall in the UK.
While details of other site closures are unlikely to emerge until after the weekend, Marconi's two biggest UK plants in Liverpool and Coventry, as well as a plant in Nottingham, are thought to have received assurances that they will not be shut.
A spokesman for the Manufacturing Science Finance union said that the Marconi workers "have been hit by an earth tremor with the announcement of the closure of the plant at Poole. Staff at all the other plants are now bracing themselves for worse to come."
Union representatives are planning to meet on Tuesday to come up with a response, which could well take the shape of a ballot for industrial action.
Such a move would add to the pressures on Marconi's chief executive, Lord Simpson of Dunkeld, who has headed the business for almost five years. He is due to take over from Sir Roger Hurn as chairman after the company's 18 July AGM when John Mayo, deputy chief executive, will step up to the role of chief executive.
However, one shareholder who did not want to be named said he would be telling the Marconi board he firmly believed that Lord Simpson should leave and that a new chairman should be found who was both "independent" and who had not previously been associated with the company.
"It would be inappropriate for Simpson to move up to that position," he said, adding: "We would expect to have an independent chairman at the very least." The shareholder said he thought that Mr Mayo's role should also be put under the spotlight, although he said that would be a matter for a new chairman to resolve.
Another shareholder said: "Simpson and Mayo are very, very closely associated with creating this animal, and I think that some objectivity at chairman level is going to be required to look afresh at where Marconi goes from here."
He believed a replacement could, if needed, be found from within the business. "There are some other very decent non-executives on the board, and I think the company should be looking to one of those to move to being chairman so that we really can have the appropriate checks and balances in place."
Marconi's shares dropped within minutes of the market opening yesterday, after being suspended all day Wednesday before the 7pm release of the profits and jobs warning. The shock waves were felt across the sector again, with ARM Holdings, the chip designer, down 10 per cent and Spirent, a telecoms testing business, off 9 per cent.
Marconi warned that operating profits would be half of last year's, after admitting that market conditions during the three months to June had been "much tougher than expected". Sales for the year ended 31 March 2002 will be about 15 per cent lower than the previous year's.
While Marconi said it expected to see some signs of a recovery in the first half of next year, many in the City were voicing concerns that the situation would get worse before it got better. One shareholder said: "There is a lack of visibility, but I think people also think there's another shoe to drop in terms of asset write-downs and inventory corrections. Five weeks ago they [Marconi] were saying there wasn't a problem with trading, so one can't necessarily say they've got enormous foresight at the moment."
Adrian Murray, an analyst at Teather & Greenwood, said: "They've been fairly complacent all the way through, saying it wouldn't affect them. The difficulty they have is they don't know. There is no visibility."
Leading credit rating agencies placed Marconi on review for a downgrade after Wednesday's agreement to sell its Medical Systems business to Royal Philips Electronics for $1.1bn (£781m) cash. In one example, Moody's Investors Service put Marconi's A3 ratings on review for possible downgrade.Reuse content