PEOPLE : Philips Rebounds After Van der Klugt Resignation

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Shares of electronics giant N V Philips bounced back Monday after a dramatic shake-up that saw its president and the head of its computer business resign due to a “crisis of confidence” among shareholders.

News that President Cor van der Klugt would resign on July 1, a year before his scheduled retirement, pushed N V Philips Gloeilampenfabrieken up the equivalent of $1.05 to close at $17.57 a share in Amsterdam.

The company’s stock had plummeted 16.7% since the May 3 disclosure that Philips, a flagship of Dutch industry, had barely broken even during the first quarter of the year.


Philips, the world’s second-largest electronics concern after Japan’s Matsushita, is a leading maker of lighting equipment, consumer electronics, home appliances and semiconductors.

Product brand names include Philips and Magnavox televisions, Polygram records, Norelco appliances and Philips light bulbs. The company also holds a 47% stake in the Whirlpool International BV appliance-making joint venture.

Wisse Dekker, the former Philips president who heads the company’s board of supervisors, said Van der Klugt had maintained until just before the profit figures were released that the company was doing much better.

“The problem is that expectations were raised . . . and that there is such a huge difference between the expectations and the real results,” said Dekker, who was Philips’ president from 1982 to 1986.

“That is about the worst thing that can happen to a company,” he said.

Dekker told reporters that Van der Klugt apparently was unaware in advance of the poor first-quarter results, which did not include a one-time $173-million gain from the sale of Philips’ defense businesses.

“Van der Klugt has no proper explanation . . . and it’s a mystery to me, too,” said Dekker, who flew home from a vacation in the United States to deal with the crisis.


The board of supervisors maintains an oversight role at Philips although it is not involved in day-to-day management.

Dekker said he held several days of intensive talks with Van der Klugt and Gert Lorentz, head of the computer division. Van der Klugt decided to quit after consulting with the board and Lorentz also tendered his resignation.

Replacing Van der Klugt will be his deputy, Jan Timmer, whose 38-year track record with Philips includes bringing profitability to its Polygram records subsidiary and the Consumer Electronics Division he now heads.

Timmer--whose reputation for widespread staff reductions has earned him the Dutch business page nickname of “Hurricane Gilbert”--already had been slated to replace Van der Klugt on July 1, 1991.

Philips reported a profit of only $3.15 million in the first three months of this year, not including the gain from the defense unit sale. That compared with a profit of $116 million for the corresponding 1989 period.

Philips has blamed its poor results on unfavorable currency conversion rates and the soaring interest rates of recent months, although analysts have said Van der Klugt’s optimistic forecasts indicated problems with the company’s control over its far-flung businesses.


Dekker said the worst losses were suffered by Philips’ Integrated Circuits and Information Systems Division, which faces fierce Japanese and South Korean competition.