Loral's Flamboyant Leader to Retire
Schwartz Set to Step Down After 34-Year Run at Firm; Targoff a Likely Successor
The Wall Street Journal 02/02/06
author: Andy Pasztor
(Copyright (c) 2006, Dow Jones & Company, Inc.)
Loral Space & Communications Inc. Chairman and Chief Executive Bernard Schwartz said he will step down next month at the age of 80, ending a flamboyant, sometimes contrarian 34-year run at Loral that mirrored the ups and downs of the U.S. aerospace industry.
A former accountant and New York City native who was a darling of Wall Street throughout his career, Mr. Schwartz's personal and management style bucked industry trends in various ways. He maintained close ties to Bill Clinton, even as the Democratic former president slashed defense spending. He also kept Loral headquartered in a Manhattan skyscraper, 3,000 miles away from the company's main satellite-manufacturing operations. Nevertheless, Mr. Schwartz turned his flamboyant and creative deal making into an important role in the turbulent consolidation that reshaped the defense-contracting world after the end of the Cold War.
Mr. Schwartz's retirement as chairman and chief executive of the pared-down New York satellite firm, effective March 1, also marks the exit of one of the industry's best-known elder statesmen and an ardent booster of commercial-space businesses. But his outspoken, freewheeling style may not be a good fit with the private-equity interests now in charge of Loral. The company is expected to name a replacement as early as today, with some people calling Michael Targoff, a former senior Loral executive and the company's recently named nonexecutive vice chairman, a leading candidate. A spokeswoman declined comment.
Mr. Schwartz, who said he wrote his letter of resignation two months ago to ensure an orderly transition, declined to talk about a successor. But in an interview, he said "there probably will never be a more appropriate time" to turn over the reins. With plans to focus on charitable work and possible venture-capital efforts in China, Mr. Schwartz added with a chuckle: "I will be making news again, and in this industry, too."
Mr. Schwartz first rose to prominence four decades ago working for corporate raider Saul Steinberg. Later, Mr. Schwartz parlayed his financial acumen and hard-nosed acquisition strategy to grow Loral from a tiny defense supplier with marginal products and less than $30 million in annual revenue into major international defense contractor with a $15 billion market cap.
In 1996 he struck a deal to sell most of the company to Lockheed Martin Corp. for $7.4 billion in what became a seminal deal that touched of larger industry consolidation plays. But Mr. Schwartz continued running the remaining space assets of Loral, differentiating it from rivals because the company remains both a satellite manufacturer and satellite-service provider.
In the past decade, he was dogged by controversies over space-technology exports to China and a $4.3 billion bet on satellite-phone firm Globalstar Telecommunications that pushed Loral into bankruptcy-court proceedings.
|
