Update: Storage Technology Hires Former Xerox Exec as CEO
Updated from 1:18 p.m. EDT
Plagued by management defections after failing to find a buyer,
Storage Technology
(STK) - Get Report
named a former
Xerox
(XRX) - Get Report
vice president to its top position Tuesday.
In its sixth executive-level appointment in less than two months, the Louisville, Colo.-based maker of information storage devices named Patrick J. Martin its chairman, president and chief executive. He replaced David E. Weiss, who had held all three jobs for four years.
Martin, 59, left Xerox in June. Born in New York in 1941, he joined Xerox in 1977 as manager of planning and systems engineering, for the
Data Processing Services
division. He retired as corporate senior vice president and president of the
North American Solutions Group
. The job entailed supervising Xerox's direct sales force in the United States and Canada.
Martin has never held a chairman or chief executive position. He was the president of
NCS Computing
in the late 1960s and early 1970s.
"He has a big job in front of him," said Glenn Hanus, analyst for
Needham & Co
. (Hanus rates the company's shares hold, and his firm has not done investment banking for Storage Technology in at least five years, he said.) "Perhaps the biggest problem right now is just morale. Many of the seasoned veterans out there are continuing to leave."
"I wouldn't be surprised if attracting a seasoned CEO would be challenging," he added.
Restructuring efforts have cut the workforce to fewer than 8,000 employees, a reduction of 1,250 as of the last quarter. The company had committed to cut 1,200 to 1,400 employees, according to research by the firm
A.G. Edwards
.
In a telephone interview, Martin said that the reduction is complete.
"This is a great company with great potential," he said. "Restructuring has placed us on a firm footing. I'm not looking to grow profits by shrinking."
He also said he will soothe morale concerns by emphasizing teamwork.
Asked how his experience at Xerox, itself facing notoriously low morale and bumbling execution, would be useful, Martin said Storage Technology "is fundamentally a direct sales service organization," adding that "it's in the high technology industry."
Shares of Storage Technology finished down 5/8, or 5%, at 11 7/16.
