Mary,
If you had been worried about people with technical background becoming senior managers, the following article ought to ease your fears:
_____
Sunday March 29, 12:16 pm Eastern Time
Intel shares rise again on optimism about Barrett
By Kourosh Karimkhany
PALO ALTO, Calif., March 29 (Reuters) - Craig Barrett, who is replacing Silicon Valley legend Andrew Grove as Intel Corp.'s chief executive, is seen as just the man to get the world's largest computer chip company growing again.
Intel said on Thursday that it would promote Barrett, its current chief operating officer, to CEO in May. Grove will remain chairman and set long-term strategy for the company.
Analysts said investors approve the management change because Barrett has much more experience in operations. At this stage in Intel's history, the company needs a chief who can cut costs aggressively to cope with collapsing prices of personal computers and chips.
''The fundamental issue is that the average selling price of a microprocessor is in free fall right now,'' said Drew Peck, analyst at Cowen & Co. ''If they can't prevent prices from going down, then they have to address costs. That means becoming a much better manufacturer.''
That's why Intel turned to Barrett, Peck said.
Long a behind-the-scenes man, Barrett has built a reputation as a manager with a talent for figuring out how to run a huge operation most efficiently.
The 58-year-old former Stanford University professor also gets much of the credit for Intel's focus on building its manufacturing capacity in the 1990s.
Even though Grove, 61, consistently ranks as one of the most visionary CEOs ever, Intel needs more of Barrett's opertional skills these days, analysts said.
The company, which is based in Santa Clara, Calif., seems to have been surprised by several threats in the past year.
PC prices are collapsing, falling from about $2,000 to $1,000 or less. That's forcing Intel to slash its own chip prices more deeply than it would like.
That also is part of the reason why Wall Street now expects Intel to report a drop in earnings in 1998, the first yearly drop in a decade.
''The transition is driven by the fact that this company is going to have to focus its resources on becoming a bigger and more efficient manufacturer,'' Peck said.
Intel also has been slow to recognize the growing popularity of new types of computers that don't need Intel Pentium chips -- such as handheld computers, consumer electronics, souped-up cable television boxes and digital television sets.
''Intel and Barrett might want to take a look at Microsoft's book,'' said Rob Chaplinsky, a Hambrecht & Quist semiconductor analyst who used to work at Intel.
Microsoft Corp. [Nasdaq:MSFT - news], faced with a slowdown in software sales, has aggressively expanded into other areas through its investment in cable television, the acquisition of Internet set-top box maker WebTV Networks Inc. and its push into toys and car navigation devices.
Intel will have to do something similar to wean itself from PCs, Chaplinsky said.
To be sure, some industry executives said Intel's stall is only temporary. Its upcoming microprocessors will allow companies like Compaq Computer Corp. [NYSE:CPQ - news] to make high-end computers with computing horsepower to rival the brawniest mainframes.
''Craig is an experienced manager, but more importantly he's a technologist,'' said Casey Powell, the chief executive of computer maker Sequent Computer Systems Inc. and a former top Intel executive. ''You need a technologist for this job.''
Still, other executives said Intel's old formula of introducing a faster chip each year will not work much longer.
Grove said on Thursday his job will be to figure out how Intel can make more money in new markets. Barrett will be in charge of making Intel leaner.
Intel stock rose for a second day Friday, gaining 69 cents to $78.88 on Nasdaq trading of 18.2 million shares, the most active issue. On Thursday when the company announced the change, the stock jumped $2.13 to $78.19.
________
Trust me, dear Mary, a technically trained person in general makes a better CEO for a high tech company than a sales person or an accountant would--not being chauvinistic here either.
Ibexx |
