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http://www.bloomberg.com/apps/news?pid=20601103&sid=azEm34Pezz54&refer=us
Xerox’s Burns Takes Reins During ‘Daunting’ Time
May
09– Xerox Corp.’s Ursula Burns, who takes the reins at the world’s
largest high-speed color printer maker in less than six weeks, has a
mandate: getting budget-cutting customers to increase spending on
office equipment.Burns, 50, will become chief executive officer on July
1, ending the eight-year run of Anne Mulcahy, who will stay on as
chairman. Mulcahy, 56, named Burns president in 2007, almost three
decades after Burns joined Xerox as a summer intern.Burns, who will be
the first black female CEO among Fortune 500 companies, has to work on
maintaining Xerox’s cash flow and improving the product line, said John
Engler, president of the National Association of Manufacturers, where
Burns served as a director. Her promotion follows two straight quarters
of sales declines amid the worst economic slump in more than 50
years.“It’s a very daunting time to be a businessman in America,” said
Engler, who met Burns in 2004. “Ursula brings a real set of skills.
She’s creative, very direct. This will be a very peaceful
transition.”Burns, who has a master’s degree from Columbia University,
joined Norwalk, Connecticut-based Xerox in 1980 with an interest in
mechanical engineering. Since then, she has run different divisions
including product development and marketing.“The succession plan has
been in the making for several years and Xerox is as prepared as it can
be,” said Angele Boyd, a vice president at research firm IDC in
Framingham, Massachusetts. “The strategy in place is very sound.”Sales Decline
Global
technology spending may fall 3.7 percent this year as companies curb
outlays, research firm Gartner Inc. projected.Xerox, which avoided
bankruptcy earlier in the decade with Mulcahy’s cost-cutting measures,
posted a 30 percent drop in sales from equipment and other hardware
last quarter. Such sales are an indicator of future demand for paper,
toner and other supplies, which make up about four-fifths of
revenue.Still, the company posted net income of $49 million in the
latest period, its fourth-straight quarterly profit, after slashing
administrative expenses 11 percent. The company’s full- year profit
forecast met analysts’ estimates.“The market is definitely softer
today,” Burns said in an interview earlier this month. “There are less
buying decisions, but many, many still going on.”Burns will be one of
about 15 women who lead Fortune 500 companies and her ascension will
mark the first female-to-female transition, according to Fortune. Her
promotion cements her status as the most powerful black woman in the
corporate world.She’s been to business what “Condi Rice is to
politics,” said Engler.Mulcahy’s Tenure
Xerox will focus on
color printing, especially solid-ink printing, and selling document
services to drive revenue, Burns said in the interview. This month, the
company released its first color printer for large enterprises that
uses solid ink, which can cut the price of a color page by almost 90
percent.In 2000, the bursting technology bubble left Xerox with
mounting debt and its first annual loss in five years. The stock
plunged 80 percent as former CEO Richard Thoman exhausted the company’s
$7 billion line of credit. Mulcahy took over in 2001, and doubled the
share price during the next three years.Xerox stopped making
personal copiers and started focusing on laser printers, as well as
color printing. Mulcahy also cut at least 20,000 jobs, helping to boost
sales and lower long-term debt to about $10.8 billion last year from
more than $18 billion in 2000. She also reinstated the company’s
quarterly dividend in 2007, after it was discontinued in 2001.Xerox
fell 4 cents to $6.78 at 4 p.m. in New York Stock Exchange composite
trading. It has dropped 15 percent this year.Burns helped her turn the
company around and is ready to lead Xerox in a tough economy, Mulcahy
said yesterday at the annual shareholder meeting in Norwalk.“There is
no doubt in my mind that she is the right person and that this is the
right time for her,” Mulcahy said.
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