Tenneco Chief Gives Up Duties Due to Illness : Executives: Michael Walsh will step down from the Houston-based conglomerate to focus full time on defeating cancerous brain tumor.

Michael Walsh, a former U.S. attorney in San Diego credited with turning around Tenneco Inc. before falling victim to brain cancer, has relinquished his duties as the company’s chief executive to focus on his treatment full time, the company said Thursday.

Dana Mead, 58, president and chief operating officer of the diversified industrial company, was elected chief executive.

After serving as U.S. attorney in San Diego, Walsh was chief executive of the Union Pacific Railroad before joining Tenneco in September, 1991, amid heavy losses at the company’s JI Case farm and construction equipment business.

Walsh is credited with overseeing a $3-billion restructuring at the Houston-based conglomerate, which has businesses ranging from heavy equipment to chemicals.

Walsh instituted widespread layoffs and cost cutting, and slashed Tenneco’s dividend 50%. In March, 1992, he selected Mead to become Tenneco’s president. Mead was recruited from International Paper.

In January, 1993, Walsh was diagnosed with a cancerous brain tumor. He began a regimen of extensive chemotherapy and radiation treatments, and was forced to cut back on his rigorous work schedule.

Walsh announced in November that tests showed the tumor had stopped growing and had begun to break up. Late last month, he underwent surgery to remove dead tissue from the tumor.

The Tenneco board said Thursday it understands and respects Walsh’s decision, and hopes he will be able to resume an active role at the company.

“We want Mike to continue to be a part of the Tenneco family and have urged him to take whatever time is necessary to treat the effects of the brain tumor which has afflicted him,” said a statement issued by the board.

Mead, who in September, 1992, also took over the helm of JI Case, Tenneco’s most troublesome division, had been seen as Walsh’s heir apparent.

“Dana has been Mike Walsh’s partner in leading Tenneco,” said Peter T. Flawn, a Tenneco director. “They have been a team for the past two years. He knows the company inside and out, and we have full confidence that he will continue to lead Tenneco’s successful transformation.”

Mead said in a telephone interview that he plans little change in direction at the conglomerate.

Mead described Walsh’s resignation as “a tremendous loss for our company.”

The announcement of Walsh’s decision came after the close of the stock market Thursday. Tenneco stock fell $1.375 per share, or almost 2.4%, to $56.625.