Galli fired before he could quit

Pre-emptive move at Black & Decker explained by chairman

April 28, 1999|By Kristine Henry | Kristine Henry,SUN STAFF

EASTON -- Black & Decker Corp.'s chairman said yesterday that he removed a top executive as a pre-emptive strike, fearing that the president of the power tools division would quit and leave the Towson-based company in a vulnerable position.

Black & Decker shares fell about 8 percent Thursday, the day after Joseph Galli's departure as president of the Worldwide Power Tools and Accessories Group was announced. Yesterday, shares closed at $54.0625, up 6.25 cents.

Galli was replaced by Paul F. McBride, 43, who worked at General Electric for 21 years, most recently as president of its global silicone products business.

"I chose the timing. [Galli] was not going to be CEO here any time soon; he was going to leave, and I didn't know if that was going to be in a week or three months or six months," Nolan D. Archibald, Black & Decker's chairman and chief executive, said yesterday after the company's annual stockholders meeting at its plant here. "I did not want to place the company in a position of not having that key position filled."

Archibald said Black & Decker is going through a "transitional period" with McBride's arrival Monday, but that the new executive has been well received by employees.

Galli's attorney, Paul Mark Sandler, said yesterday that his client declined to comment.

While many viewed Galli, 41, as a rising star, poised to be Archibald's eventual successor, Prudential Securities analyst Nicholas P. Heymann said the management switch will likely help the company.

"It's a painful one for employees and for some of the shareholders, but it's probably best in the long-term interests of the employees and the company and for Joe himself," Heymann said. "Joe has excellent talents, particularly marketing talents and especially employee motivation, and he's well revered inside the company and out.

"But there are other areas in terms of what Black & Decker needed. They may have needed more horsepower, more international expertise and even better execution on some of the financials. That's definitely what Paul McBride is all about."

Archibald said he will do everything he can to help Galli find a new job, calling him "a talented and capable individual."

News of Galli's departure overshadowed the company's first-quarter results, which showed net earnings of $39.2 million, or 44 cents per share, compared with a net loss of $971.4 million, or $10.21 per share, reported for the first quarter of 1998.

Excluding write-offs, Black & Decker would have earned $28.6 million, or 29 cents per share in last year's first quarter. The company's per-share earnings beat analysts' estimates by 9 cents per share -- or about 26 percent.

Yesterday's annual shareholders' meeting was a quiet one, with a brief presentation by Archibald and no one volunteering to participate in a question-and-answer session.

Ernst & Young LLP was again retained as the company's independent accountant, and the eight-member board of directors was re-elected by an overwhelming margin.

With Archibald as chairman of the board, the other directors are: Norman R. Augustine, Barbara L. Bowles, Malcolm Candlish, Alonzo G. Decker Jr., Manuel A. Fernandez, Anthony Luiso and Mark H. Willes.

Pub Date: 4/28/99

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