New chief cuts top managers Westinghouse executive vows more changes

October 20, 1993|By Ted Shelsby | Ted Shelsby,Staff Writer Bloomberg Business News contributed to this article.

Westinghouse Electric Corp., battling sharply lower earnings, began trimming corporate fat yesterday by eliminating four group president positions in a shake-up designed to give lower-level managers more responsibility as well as greater access to the boss.

The moves, effective immediately, were the first by former PepsiCo Inc. executive Michael H. Jordan since he was picked to turn Westinghouse around.

Mr. Jordan, chairman and chief executive since June 30, said that by eliminating the group presidents, the various business unit managers, including Richard A. Linder, executive vice president of the Electronic Systems Group in Linthicum, "will have direct and immediate access" to him and company President Gary Clark.

Three group presidents, Thomas Costello, Burton Staniar and Richard Linder, will relinquish those titles and remain with Westinghouse. The fourth, John B. Yasinsky, had already announced he would resign Nov. 1 to become president and chief operating officer of GenCorp of Fairlawn, Ohio.

Separately, Maurice C. Sardi, who was chairman of the Knoll Group, will retire at the end of the year, the company said.

Mr. Jordan said more changes are coming.

"This is the first of a number of major initiatives to be undertaken in the months ahead to eliminate bureaucracy and build a more cohesive, globally focused enterprise that is better able to respond to our constantly changing markets," he said.

Judy A. Meehan, an analyst with Parker Hunter Inc. in Pittsburgh, said the moves reflect Mr. Jordan's wish to be closer to the company's various operations. "If you read between the lines," Ms. Meehan said, "it looks as if Mr. Sardi is being forced out. Knoll has been a very bad performer for more than a year."

Knoll, a supplier of office furniture, is scheduled to be sold as part of the Westinghouse move to reduce its debt.

Westinghouse has been selling assets and businesses as part of a three-year restructuring plan announced before Mr. Jordan's arrival. The restructuring is to eliminate a mountain of debt that had grown to $8.4 billion by the end of 1992. Westinghouse's total 1992 revenue was $8.45 billion.

Huge losses in Westinghouse's financial services and credit businesses drained the company and led to Paul Lego's ouster in January as president and chief executive officer. Westinghouse is still in the process of liquidating the financial services and credit businesses.

Westinghouse pared the debt to about $5.9 billion by the end of the third quarter by selling real estate holdings and other assets.

In the third quarter, which was the first quarter under Mr. Jordan's leadership, Westinghouse earned $65 million, or 15 cents a share, compared with profit from continuing operations of $91 million, or 22 cents, in the year-earlier period.

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