Unisys Corp. named turnaround specialist J. Edward Coleman as chairman and chief executive in an effort to boost performance at the struggling computer-services and hardware firm.The appointment of Mr. Coleman, who is best known for restructuring computer maker Gateway Inc. before selling it to Taiwanese PC maker Acer Inc. in 2007, could create opportunities for selling all or part of Unisys. Gateway was sold for $710 million, a 57% premium over Gateway's market price at the time.
In an interview, Mr. Coleman said that it's too early to tell whether parts of Unisys will be sold. He said "the board brought me in based on a reputation for improving results," and his skills are "improving a business and building it for the long term."
He said Unisys's main business is computer services but he plans to "take a fresh look" at whether the hardware operations should be retained. He noted that there are other companies where hardware "products and services have gone well together."
Unisys, based in Blue Bell, Pa., announced last month that its chief executive, Joseph McGrath, would resign by the end of the year. Unisys said Mr. McGrath had agreed with the company's board that "a change in leadership would best enable Unisys to move forward."
Unisys, whose predecessor companies Sperry Univac and Burroughs Corp. were founded in the early days of computing, has floundered as its large computer systems found few new buyers and an attempt to become a computer-services giant resulted in big losses. Earlier this year, it retained Goldman Sachs & Co. to help it maximize shareholder value.
Unisys has been under attack by activist investment company MMI Investments L.P., which has a 9.1% stake in the company and has been highly critical of management. MMI has named two directors to Unisys's board.
In Mr. Coleman, 57 years old, Unisys has hired a computer-industry veteran who spent 17 years of his career at International Business Machines Corp. He also has held high-level executive positions at Arrow Electronics Inc., in Melville, N.Y., and CompuCom Systems Inc., a Dallas-based computer-services provider.
In an unusual move, Mr. Coleman will succeed both Mr. McGrath as CEO and Ric Duques, the company's non-executive chairman, who will remain a director. A person familiar with the board's thinking said unifying the roles should speed up the company's turnaround process.
Mr. McGrath, a Xerox Corp. veteran who joined Unisys in 1999 and ran parts of its services organization, became chief executive in 2005, succeeding Lawrence Weinbach, the architect of the services strategy.
Unisys has had weak results ever since, with only a few quarters of profitability amid large restructuring charges and erosion in revenue. In 2007, it reported a loss of $79.1 million, including $66 million in restructuring charges, on revenue of $5.65 billion. Its first-half losses this year totaled $37.4 million.
By: William Bulkeley
Wall Street Journal; October 8, 2008
