Texas Instruments CEO Junkins Dies on Business Trip
Jerry R. Junkins, the soft-spoken but hard-driving chief executive who led a dramatic turnaround at Texas Instruments, died of a heart attack Wednesday during a business trip to Germany. He was 58.
William P. Weber and William B. Mitchell, the vice chairmen who have been sharing management duties with Junkins as part of a three-man chief executive’s office, will take charge of the company for the time being.
Observers expect one of the two to eventually succeed Junkins as CEO. While Mitchell has handled many of TI’s defense and electronic businesses, Weber, as TI’s most visible spokesman in the rapidly growing semiconductor field, could have the edge.
Although TI has seen earnings drop sharply in recent months because of overcapacity in its critical semiconductor memory business, analysts say Junkins has left the company in a strong position to weather the storm.
Texas Instruments shares fell $1 to $53.625 on the New York Stock Exchange on Wednesday.
Junkins’ strategy of diversification in the chip business and his approach to sharing risk by splitting the cost of building expensive new chip plants with joint venture partners, analysts said, will spare the company from the deep losses it has experienced in past downturns.
By decentralizing management, Junkins also has nurtured a strong management team.
“The company has a wealth of capable people,” said Gary Grandbois, semiconductor analyst at San Jose-based Dataquest.
Analysts say neither Weber nor Mitchell are likely to make dramatic changes in TI’s management and strategy, a sign of the effective strategic leadership Junkins provided to the firm.
When Junkins took over as TI’s chief executive in 1985, the company’s future looked bleak. TI’s chip business was hurting from Japanese competition, an oil downturn was hurting its oil field services business and it had developed a reputation as an arrogant supplier tight-lipped about its technology, unresponsive to customers and ignorant of market conditions.
“They were so afraid of losing secrets they closed themselves off,” recalls Dan Hutcheson, president of VLSI Research, a San Jose market research company. One result was a costly failure in the home computer business.
Where Junkins predecessors Mark Shepherd and J. Fredy Bucy were known for being short-tempered and micro-managing the company, Junkins gave his executives more responsibility.
“When you went into a meeting with Jerry, he always made you feel that you were more powerful than he was,” said Chuck Nielson, TI’s vice president of human resources. “He could go from talking to production operators to heads of government and feel equally at ease. He was self-effacing.”
But Junkins could also be hard-nosed when he had to be. Before becoming chief executive, he had closed down the company’s failed home computer business. As CEO, he sold the oil services business that was TI’s first business in 1930.
Although Junkins built his career on the defense side of TI, he led the way in shrinking the sector as defense sales shrunk, laying off a quarter of the company’s work force.
He also worked to build up the company’s key strengths. While other chip companies like Intel were getting out of the competitive business for Dynamic Random Access Memories (DRAMs) used in personal computers, Junkins found ways to continue to make heavy investments in new capacity by drawing on low-cost government capital from governments in Taiwan, Singapore and Italy that wanted chip plants in their backyards. As a result, when the DRAM business picked up and became a gold mine of profits in the 1990s, TI was well-positioned.
Also under Junkins, TI became more aggressive in collecting royalties from other chip makers using its patents resulting in hundreds of millions of dollars in additional profits.
In recent years, TI has successfully diversified into new areas of the semiconductor business, including chips used in portable phones and other telecommunications devices.
Sales under Junkins rose to $13.1 billion last year, up from $4.9 billion in 1995. Earnings shot up to $1.1 billion from a $141-million loss when he took office.
TI is now going through a rough patch. In the first quarter ended March 31, net income dropped by one-third on a slight increase in revenue. But analysts point out that TI, because of its diversification and its joint venture approach, are in far better shape than companies like Micron that have continued to depend on DRAMs for the bulk of their sales.
The company has also regained its technology leadership. It announced Tuesday that it had developed technology that would allow it to cram far more circuits onto semiconductors than current chips, potentially allowing for huge advances in electronics appliances.
Junkins was traveling by car in Germany as part of a European trip to meet customers and employees when he had the heart attack.
Company executives say Junkins had no history of heart trouble and had maintained a hectic pace traveling frequently to check on the company’s far-flung operations.
Junkins grew up in Montrose, Iowa, and graduated from Iowa State University in 1959 with a degree in electrical engineering. He joined Texas Instruments at age 21 pushing a parts cart around one of its manufacturing plants.
As vice chairman of the Business Roundtable, he was an aggressive advocate of free trade agreements. He also served on the boards at Caterpillar Inc., Procter & Gamble Co., and Minnesota Mining & Manufacturing Co.
Junkins is survived by his wife Sally, two daughters and a granddaughter.
