I'm not sure if XRX will turn around or not. I saw the
cnbc interview with the the Chairman, Paul A. Allaire on late Friday. He has renamed himself CEO just now, after
. Chief Executive G. Richard Thoman resigned under pressure.
Thoman, who the Chairman said had a great resume, did not
have enough XRX experience:
----Thursday, Mr. Allaire could point to no event or "performance issue" triggering the decision. But, he said, Xerox "needed leadership in the company with more Xerox experience and background----
I was turned off by the interview, as I think that the
corp culture in XRX is not innovative and I saw no
confidence in the Chairman's interview, he seemed like
he really did not know what to do, and also did not
want to step out of the way for someone who does.
The stock has rebounded from it's severe decline and is
near it's 200 DMA, it's certainly not real expense compared
to companies that are growing but is XRX growing?
JOhn
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May 12, 2000
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Xerox Chairman Will Reassume
Position of CEO for Two Years
By JOHN HECHINGER and JOANN LUBLIN
Staff Reporters of THE WALL STREET JOURNAL
Xerox Corp. Chief Executive G. Richard Thoman, struggling to turn around one of America's corporate icons, resigned under pressure only a year after taking the job.
The copier company's chairman, Paul A. Allaire, who relinquished the chief executive post to Mr. Thoman in April, agreed to take it back for the next two years.
Mr. Allaire, who is 61 years old, orchestrated Mr. Thoman's departure during the past week or so by gathering support from fellow board members and then confronting him, one person close to the situation said.
Mr. Thoman, who is 55, had indicated in past interviews that he expected to be on hand for improved Xerox results in the second half of this year.
"Thoman was not expecting this," said the person close to the matter. "He thought he was doing better."
In separate interviews, Messrs. Thoman and Allaire called Mr. Thoman's resignation a mutual agreement.
Last year, Mr. Allaire had praised his outside experience and his status as a newcomer to Xerox. Mr. Thoman came to the Stamford, Conn., company from International Business Machines Corp., where he had served as chief financial officer and, before that, head of its personal-computer unit under his mentor, Chairman Louis V. Gerstner Jr.
Thursday, Mr. Allaire could point to no event or "performance issue" triggering the decision. But, he said, Xerox "needed leadership in the company with more Xerox experience and background."
Mr. Thoman "had the right strategic direction, but was not able to execute effectively," and that caused "great frustration on both sides," said David Nadler, chief executive of Delta Consulting Group of New York, a longtime Xerox adviser. "The board was very much involved in this."
Mr. Allaire had been losing confidence in his successor's ability to solve operational problems fast enough, according to one person familiar with his thinking, while the company was facing the threat of defections by rising stars in manufacturing, engineering, product development and sales management.
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1. April 6, 1999: Xerox board elects G. Richard Thoman chief executive officer
2. Oct. 8, 1999: Warning of poor earnings in third quarter pushes stock down 24%
3. March 31, 2000: Xerox announces it will cut 5,200 jobs, or about 5% of its work force
4. April 25, 2000: Xerox posts a loss of $243 million for the first quarter
5. May 11, 2000: G. Richard Thoman resigns as CEO of Xerox
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One recent departure was William R. McDermott, a 17-year veteran and important sales executive who left to join consulting firm Gartner Group Inc. at a time when Xerox was in the midst of a sales reorganization that it has blamed for disappointing results. Mr. Thoman also wasn't winning high marks for handling the restructuring, which the company has said resulted in billing errors and poorer attention to customers.
It was "a right idea that failed" because of poor implementation, a former Xerox executive suggested.
Mr. Allaire has been working to keep potential defectors from leaving, but after doing so several times in the past few weeks, the informed person said, "he concluded this guy \[Thoman\] isn't going to make it."
A year ago, hopes were strong of a Xerox breakout in the New Economy, fueled by a generation of high-powered digital printing/copying machines that were unique and selling strong. But those hopes were dashed by new competition on the high end from companies such as Japan's Canon Inc., a slowdown in big corporate purchases and the rapid proliferation of the computer printer, which does what copiers once did in many offices -- and often for less money.
Xerox Cut CEO's Pay Package by 76% for 1999, Citing Firm's Performance (April 10, 2000)
Xerox Board Elects Thoman as Company's Chief Executive (Apr. 7, 1999)
Xerox's stock has lost more than 60% of its value during the past nine months. Its first-quarter earnings fell 36% to $243 million on revenue of $4.43 billion -- essentially flat from a year earlier, excluding the effect of an acquisition. Xerox shares stood Thursday at $25.75 in 4 p.m. New York Stock Exchange composite trading, down $1.75. That is down from the company's 52-week high of $62.625.
Xerox's board named Anne M. Mulcahy, 47, president of general-markets operations, as its corporate president, succeeding Mr. Thoman in that post.
Ms. Mulcahy joined Xerox in 1976 and led the 6,000-person division aimed at boosting business in both small and large companies.
The company said Mr. Allaire would lead a newly formed "Office of the Chairman," which includes Ms. Mulcahy and Vice Chairmen William Buehler and Barry Romeril, who is chief financial officer. Ms. Mulcahy said she would concentrate on galvanizing employees "to place the customer first," the company's announcement said. She also stated that "execution will be as strong as our strategy."
Mr. Thoman resigned as a director and said he had no immediate career plans. In evaluating his tenure, he cited the difficulty of making a "cultural change" at a big company such as Xerox. "I'm disappointed that it's taken longer and involved more financial pain for shareholders and human pain for employees," he said. But, he said, the company had taken the right course. "We didn't have any choice but to change aggressively."
Brian Clancy, an analyst with Safeco Asset Management, a Xerox shareholder, said he worried the announcement could mean more financial disappointments this year. "It just raises more questions," he said. "Does that mean there's another shoe to drop?"
By announcing that Mr. Allaire will remain chairman for the next two years, Xerox signaled that Ms. Mulcahy could succeed him in the No. 1 spot sooner than that. "She is the obvious choice to be the next CEO of Xerox -- if she performs well," predicted Mr. Nadler, who has known her since the mid-1980s. "Right now, Anne is getting the business to run. Anne has the right stuff. Xerox people will respond to her very positively. She's the best of the old Xerox and the new." |
