Kodak Puts Motorola’s Chairman in the Picture : Executives: The choice of Fisher as the troubled photo company’s new CEO comes as a surprise to analysts.
In a surprise announcement likely to please both shareholders and employees, Eastman Kodak Co. on Wednesday named Motorola Inc. Chairman George M. C. Fisher as its new chairman and chief executive.
The appointment puts one of the nation’s most esteemed technology executives at the helm of a venerable but troubled company that has been unable to adapt its products and its culture to the challenges of the 1990s.
Kodak has been searching for a new chief executive since August, when incumbent Kay Whitmore, under intense pressure from angry shareholders, announced that he would step aside as soon as a successor was found.
Kodak’s problems are much less severe than those at other old-line mega-corporations such as IBM and General Motors Corp. But the $20-billion company (in annual revenue) has gone through repeated restructurings over the past decade without improving its lackluster profit or developing a coherent plan to cope with rapidly changing photographic technology.
Fisher, 52, a low-key engineer who has been CEO of Motorola since 1988, helped transform that company from a modestly successful consumer electronics firm into a cutting-edge purveyor of communications equipment and computer chips.
During a period when many U.S. electronics firms struggled to keep pace with Japanese competitors, Motorola established itself as the world leader in radio communications equipment, including pagers and cellular telephones, and more than held its own in the treacherous computer chip business.
Fisher’s departure for Kodak comes as a surprise in part because Motorola is now extremely well-positioned to capitalize on the much-anticipated convergence of computers, communications and consumer electronics. He turned down the top job at IBM early this year, saying the opportunities were simply too great at Motorola.
Fisher could not be reached for comment in advance of a news conference scheduled for today. Motorola said in a statement that Vice Chairman William Weisz will be interim chairman and that President Gary Tooker will be interim chief executive.
For Kodak, landing Fisher is something of a coup. Still, as Dean Witter analyst Eugene Glazer noted, Fisher lacks experience in a couple of key areas. He has never managed the kind of restructuring and layoffs that many believe are essential at Kodak. And he is an engineer by training. Many expected Kodak to go for a marketing whiz such as former Apple Computer Chairman John Sculley.
Still, Glazer said Fisher has “some very substantial credentials, coming from a premier growth company with excellent prospects. I think investors will view this positively.”
Fisher is also lauded for building top-notch management teams rather than ruling by dictate, and for instilling an entrepreneurial culture driven by the quest for quality and innovation.
He will have plenty of work to do at Kodak. The Rochester, N.Y.-based company boasts a rich history of innovation: A century ago, founder George Eastman literally invented popular photography with the silver-halide film process. The company was a pioneer in corporate philanthropy and progressive employment practices.
But like so many corporate titans, Kodak has found in recent years that its long-admired culture has become a millstone. Rivals such as Fuji of Japan and Agfa of Belgium began to eat away at its core film and photographic chemical business. It had to pay $900 million to Polaroid for infringing on instant-photography patents.
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Most damaging of all, it failed to establish a strong position in electronic imaging technologies, which are gradually eroding the traditional film business.
Whitmore also earned the enmity of stockholders with a series of ill-conceived diversification efforts, notably the 1988 purchase of Sterling Drug for $5.1 billion.
There are some bright spots. Kodak’s photo CD technology, for example, in which pictures taken with conventional film can be put onto a compact disk, is gaining ground as a standard for handling pictures on computers.
Also on Wednesday, Kodak reported a $68-million loss for the third quarter, largely due to $387 million in restructuring charges. The loss contrasts with a profit of $189 million in the 1992 period, when Kodak recorded $149 million in restructuring charges. Revenue in the latest quarter slipped to $4.1 billion from $4.3 billion.
Kodak stock rose $4.25 to $62.125. Motorola stock rose $2.375 to $105.625. Fisher’s appointment was announced after the close of trading.
George M.C. Fisher
* Background: Engineering degrees from University of Illinois. Doctorate in math from Brown University. Joined Motorola in 1976; CEO since 1988.
* Boards: American Express, 3M, Brown University, Urban League.
* Achievements: Helped turn an unexceptional consumer electronics concern into a nimble technology giant.
