A Builder, Not a Slasher

By THOMAS McCARROLL

When George Fisher took over Motorola nearly six years ago, the Schaumburg, Illinois-based electronics company had been chased out of the TV business, lost its lead in stereos and surrendered its No. 1 position in computer chips. It was even close to raising the white flag in cellular telephones. Fisher could have taken the well-worn corporate-turnaround path by slashing costs, closing divisions and laying off employees -- all to boost the bottom line, and ultimately Motorola's stock price. Instead he engineered one of the most remarkable transformations in U.S. corporate history, turning Motorola into a worldwide leader in microprocessors and cellular phones. He led Motorola to the front lines of the wireless communications revolution. "Since George became chairman," says a Motorola vice president, "everything has gone right."

Having succeeded in Schaumburg, the 52-year-old mathematician last week announced that he would try again in Rochester, New York, this time for Eastman Kodak. It may be the most calculating task of his career. He takes over as chairman, president and chief executive officer from Kay Whitmore, whose three-year tenure as CEO came to an ignominious end three months ago when the company's board of directors asked him to resign as soon as a successor could be found.

When the board made clear it was looking for an outsider, the stock began to climb. That's because Wall Street believes that only outsiders can bring radical change to companies that desperately need it. Put Kodak in that category. Though the company enjoyed a healthy cash flow from sales of all those little yellow boxes of film, it never seemed able to get costs under control or high-tech products successfully launched. In spite of numerous restructurings, the company posted losses of $1.7 billion on revenues of $11.9 billion during the first nine months of 1993.

Now Fisher joins a growing band of rescue artists of the not-grown-at-home variety. Prominent among them is Louis V. Gerstner, who was recruited in March from the top job at RJR Nabisco to become chairman and CEO of IBM, the once great computer giant that has lost $8.37 billion so far this year. In June a troubled Westinghouse Electric asked Michael H. Jordan, a partner at the New York City investment firm Clayton Dubilier & Rice, to succeed outgoing chairman Paul Lego. Former Union Pacific chairman Michael Walsh replaced James Ketelsen at Tenneco, a Houston-based auto-parts, shipbuilding and natural-gas conglomerate. Outsider Stanley Gault left retirement to take charge of laggard Goodyear. And Lawrence Bossidy, a General Electric veteran was recruited for the top job at Allied Signal, whose business supplying components to the aerospace industry was in a downdraft.

What all these CEOs bring to their new job is a willingness to challenge every aspect of the corporate culture -- and that almost always means cutting jobs. Gerstner is continuing to reduce the work force at IBM, which has already lost 180,000 jobs over the past eight years. Under Bossidy, Allied Signal has taken employment down by 13,000. At Kodak, Fisher will inherit his predecessor's last restructuring plan, which will lower the head count by 10,000.

But the turnaround job can't be done simply by cutting costs. "George Fisher is not just coming in to chop heads," says Michael Geran, an analyst at Pershing & Co. "He's a builder, not a destroyer. He's coming in to reinvent and re-energize the company." That's a challenge his successor at Motorola can gratefully skip.

With customers switching rapidly from films and photographs to electronic imaging, Fisher is expected to focus Kodak on digital forms of pictures that can be stored and transmitted by computer. The chance to rebuild Kodak the same way he revamped Motorola thrills Fisher. "To do that twice in my life, that's a big opportunity." But, he adds, "the first order of work will be to % make sure our financial house is in order." As to his financial house, Fisher, who earned $5 million at Motorola last year, could pocket up to $100 million in salary, bonuses and stock options -- if he dramatically improves Kodak's picture. Says he: "I'm betting Kodak will do extremely well." So are its stockholders.