HARD TIMES AT LEXMARK CORP ! (READ)
HARD TIMES AT LEXMARK CORP ! (READ)
2008-04-07 at 11:41:39 am #19450
HARD TIMES AT LEXMARK CORP
Departures threatening turnaround
Several senior and mid-level managers have left Lexmark International in recent months, leading some to ask whether the struggling company can complete an ambitious turnaround plan.Gone are vice presidents in marketing and finance, taking with them decades of experience at one of Lexington’s largest employers.Those who left and agreed to talk said their decisions were personal, but industry observers and one who left said they can see why some might be compelled to move.
Lexmark’s inkjet printer division has struggled since the latter half of 2005, as customers weren’t buying enough of the highly profitable ink cartridges. The company has decided to tailor its marketing and sales to countries where customers print the most. To adjust to its shrinking demand, the company has shuttered two plants and eliminated or shuffled thousands of employees worldwide.”I’ve always believed in Lexmark, and they’ve had a lot of challenges,” said Ben Smith, who left Lexmark in 2006 for a job in Washington, D.C., and has since relocated to rival Kodak’s Atlanta office. “The things they’re doing now … if they had been doing them say four years ago, they wouldn’t be in the hole they’re in today.”Those leaving Lexmark haven’t had trouble finding jobs. Along with Smith at Kodak’s Atlanta offices are more members of Lexmark’s marketing team. And a recruiter for industry leader Hewlett-Packard recently posted job openings on an Internet message board frequented by some Lexmark employees.
Among those who left were the leaders of an advertising campaign aiming to resuscitate the company’s inkjet printer division.Jeff Willard helped orchestrate the campaign promoting the wireless inkjet lineup but left last October for Helen of Troy, where he now helps pitch products under the Vidal Sassoon and Dr. Scholl’s brands. He had worked at Lexmark for nine years.
Also gone are:
• Jeff Meredith, Willard’s replacement. He could not be reached.
• Vince Young, another marketing employee who left for Kodak.
• Marketing’s Matt Franz, who also went to Kodak.
• Finance executive Scott Lannum, who had worked for Lexmark for 12 years and declined to say where he now works.
• Finance executive Dave Saunders.
Those who agreed to talk, like Willard, complimented Lexmark and said their decisions were personal.”At the end of the day, I just needed to do something different,” Willard said. “If I had been working at HP for nine years doing printers, I would have been ready to do something different from there.”Another factor on the minds of some could be the company’s poor stock performance, said Tom Carpenter, vice president and senior equity analyst at Hilliard Lyons in Louisville.”The stock price is roughly the same as it was 10 years ago,” he said. “And similar hardware companies have seen their stocks rise by 50 or 100 percent or more over that same timeframe.”
Jobs for the taking
Those looking to leave aren’t finding it hard since expanding rivals are snatching them up.”There’s some aggressive companies out there like HP and Samsung, and Kodak’s trying to come on strong,” said Larry Jamieson of industry tracker Lyra Research.”I think in some cases, people might want to say, ‘I would like to stay here, but how many times do I get the possibility of moving to a company that’s expanding?’”HP took its efforts public when a recruiter posted on a Yahoo Finance message board earlier this year, inviting Lexmark employees to apply for a variety of job openings. An HP spokesman declined to discuss the post.And Lexmark’s shrinking revenue, Carpenter said, might make employees, particularly those on the struggling inkjet side, “stop and think, ‘Will my job still be here five years from now?’”"And that’s a question that’s very hard to answer.”Lexmark executives said in a written statement that they could not comment on any particular employee’s departure but that “as at all companies, people leave Lexmark for a variety of reasons.”"Clearly, these are difficult times for the company,” the statement added. Executives said the company has “the necessary talent to execute our core strategic objectives.”But industry observers said the departures will make it tougher to quickly convert those strategic ideas into practice. After all, the upper-level and mid-level managers are the ones tasked with carrying the top team’s message to the rank-and-file, Jamieson said.
And the company’s struggles make it tough to bring in people from outside.
“You’ve got to convince them that they can come in and help turn it around, and people have to risk their future on that,” Jamieson said.Carpenter said Lexmark is more likely to promote from within, “which is good because you have people who have experience with the company.” Carpenter’s firm owned at least 1 percent of Lexmark’s stock on behalf of clients at the end of February.Lexmark noted just that in its statement, writing “each departure we’ve experienced recently has created opportunities for internal candidates, which reflects the overall quality of the talent pool available to us.”But Carpenter warned that internal candidates might not always be the best to execute a new plan.”Sometimes you might keep trying a similar strategy over and over again,” he said.