TRW CEO David Cote Resigns, Successor Search Begins, Seasoned Management Team to Lead Company
Company Reaffirms Earnings Guidance
TRW Inc. today
announced the resignation of David M. Cote, chairman, president and chief
executive officer, subsequent to his acceptance of a position with Honeywell
International Corp.
The TRW Board of Directors has established a Chief
Executive Office to direct the company while it seeks a permanent successor.
The Chief Executive Office will include Philip A. Odeen as non-executive
chairman; Timothy W. Hannemann, who will represent the combined $6 billion
Aerospace and Systems businesses and will continue to serve as president and
chief executive officer of Space & Electronics; and John C. Plant, who will
continue as president and chief executive officer of the company’s $10 billion
automotive unit.
Mr. Odeen, who has been elected to the Board of Directors,
was formerly president and chief executive of BDM International Inc.
Following TRW’s acquisition of BDM, he directed TRW’s $3 billion Systems
business and later became the company’s lead executive in Washington D.C.
Mr. Odeen said, “TRW management fully intends to sustain and accelerate
the strong progress our company has demonstrated.
We are making great strides
in improving TRW’s credibility among key constituencies while reducing debt,
meeting commitments, and transforming the company into a leaner and more
focused business.
During this time of change, TRW’s management team and its
94,000 employees remain committed to their worldwide customers, in the
automotive, aerospace and systems businesses.
With our solid core of
excellent people and unparalleled technologies, I believe that great things
can be expected from TRW.”
TRW reaffirmed its earnings and cash flow guidance provided in its
January 24 fourth quarter 2001 earnings release conference call.
This
guidance included earnings per share growing from $2.36, before unusual
charges, in 2001 to $3.30 in 2002, including a $.70 per share favorable impact
from the adoption of Financial Accounting Standard 142, accounting for
goodwill.
The company expects cash flow of $500 million.
TRW Director Kenneth W. Freeman will serve as lead director to interact on
a regular basis with members of the Chief Executive Office.
He will work
closely with the company’s senior executive team to assure continuity and
continued implementation of existing strategies.
Mr. Freeman is chairman of
TRW’s compensation committee and will lead the Board’s search committee.
He
is chairman and CEO of New Jersey-based Quest Diagnostics Incorporated.
Commenting on the transition, Mr. Freeman said, “TRW has an experienced
senior management team that is highly committed to the company and well able
to deal decisively with prevailing business issues.
The Board has full faith
and confidence in management’s ability to carry forward on its commitments and
programs and to meet the company’s financial goals.
The Board’s executive
search committee, comprised of outside directors, is seeking a seasoned
business leader who will capitalize on TRW’s strengths, grow its businesses,
and continue to increase shareholder value.
We anticipate this process to be
completed within four to six months.”
Mr. Freeman is chairman and CEO of Quest Diagnostics Incorporated, Teterboro, N.J. Quest Diagnostics is the nation’s leading
provider of diagnostic testing, information, and services.
The company’s
diagnostic testing yields information that enables healthcare professionals to
make decisions to improve health.
Under Mr. Freeman’s leadership, Quest
Diagnostics was spun off by Corning Incorporated at the end of 1996.
Since
that time it has had strong annual profit growth and has grown sharply since
1999, when it acquired the clinical laboratory business of SmithKline Beecham
plc.
In April 2001, the company earned the prestigious top ranking in the
Barron’s 500, the magazine’s unique report card that grades how well
businesses have performed for their investors.
Mr. Odeen, before joining BDM, was vice chairman, management-consulting
services, at Coopers & Lybrand, where he directed a practice of 2,500
consultants in 30 cities. Earlier, he served 13 years as managing partner of
the firm’s public sector practice. From 1973 to 1978, he was vice president of
the Wilson Sporting Goods Company.
He has served in senior positions with the
Office of the Secretary of Defense and the National Security Council (NSC)
staff. He was principal deputy assistant secretary of defense (Systems
Analysis) and later led the Defense and Arms Control staff for the NSC.
Active in various government advisory groups, primarily in the defense and
national security area, Secretary of Defense William Cohen selected him in
1997 to chair the National Defense Panel (NDP).
He also was vice chairman of
the Defense Science Board, a member of the Chief of Naval Operations Executive
Panel, and he has chaired various Defense Science Board Task Forces on the
defense industry, logistics, and outsourcing.
Mr. Hannemann has served since 1993 as president and CEO of TRW Space &
Electronics, and he is a member of the TRW Management Committee.
Previously,
Mr. Hannemann was executive vice president and general manager of TRW’s entire
Space & Defense business from May 1991 until its reorganization in December
1992.
Since joining TRW in 1969 as a member of the technical staff, he has
devoted the majority of his career to technical and management positions in
support of critical national programs.
Mr. Plant is president and CEO of TRW’s entire Automotive business and
serves as a member of the company’s Management Committee.
Prior to being
named to his current role in October 2001, Mr. Plant had been president and
CEO of TRW Chassis Systems since August 1999. He also had served as vice
president and general manager of TRW Automotive following TRW’s acquisition of
LucasVarity in May 1999 and was responsible for the former LucasVarity
automotive units.
He joined Lucas Industries plc in 1978 and held a variety
of positions of increasing responsibility.
In 1998, Mr. Plant was appointed
to run LucasVarity Automotive as president, based in Livonia, Mich.
TRW is a $16 billion corporation that provides advanced-technology
products and services for the automotive, aerospace, and systems markets.
The
company’s news releases are available through TRW’s corporate Web site,
www.trw.com .
Investors and the general public are invited to listen to an Internet
Webcast concerning this announcement, beginning at 5 p.m. ET today,
February 19, 2002.
This Webcast can be accessed through
www.trw.com/investorpresentation .
Statements that are not statements of historical fact may be forward-
looking statements. Important factors that could cause TRW’s actual results to
differ materially from those contained in any forward-looking statement
contained in this release are described below.
The Company’s results could be affected by: the ability to obtain new
contract awards; the level of defense funding by the government and the
termination of existing government contracts; pricing pressures from
customers; moderation or decline in the automobile build rate; changes in
consumer debt levels and interest rates; work stoppages; unanticipated
downturn in the financial condition of, or business relationships with
customers or suppliers; the ability to reduce the level of outstanding debt
from cash flow from operations and the proceeds from asset dispositions; a
credit rating downgrade; increase in interest rates; customer recall and
warranty claims; product liability and litigation issues; changes to the
regulatory environment regarding automotive safety; the introduction of
competing products or technology by competitors; the ability to attract and
retain skilled employees with high-level technical competencies; the financial
results of companies in which we have made technology investments; the
availability of funding for research and development; economic, regulatory and
political domestic and international conditions; fluctuations in currency
exchange rates; and the impact of additional terrorist attacks.
