February 17, 2007
After Its Founder’s Return, Many Are Leaving at Dell
By DAMON DARLIN
Two weeks after he returned to run the computer company that bears his
name, Michael S. Dell is making sweeping senior management changes.
The company announced yesterday that it had hired Ronald G. Garriques, a
Motorola executive vice president in charge of that company’s mobile
devices division, to run Dell’s global consumer division.
On Wednesday, Dell announced that it had hired Michael Cannon, the chief
executive of Solectron, a big electronics manufacturing company, to
oversee parts procurement and manufacturing operations.
Both positions are new, and both executives will report directly to Mr.
Dell.
The hiring and the realignment at the top is a reflection of Mr. Dell’s
concern that the company urgently needs to be fixed. Its growth has
faltered in the last 18 months, and it has faced a number of other
problems, including federal investigations into its accounting practices.
Dell had made several management changes just before Mr. Dell, the
chairman and founder, reassumed the role of chief executive on Jan. 31,
taking over from Kevin B. Rollins.
It has a new chief financial officer, Donald Carty, the former chief
executive of AMR, who served on the company’s board and has also been
taking on some of the management responsibilities of Mr. Rollins. Dell
has also hired a top executive of Electronic Data Systems, Stephen F.
Schuckenbrock, to expand its consulting and services business to large
corporations.
Mr. Dell has told employees that he is searching for a chief marketing
officer, another new position, to consolidate and manage the company’s
marketing efforts across all product lines. Mr. Dell is also looking for
an executive to run the European operations. Paul D. Bell, a senior vice
president who held that job, has been transferred back to the company’s
headquarters in Round Rock, Tex., to head its Americas sales division.
The restructuring of Dell’s management and the hiring of Mr. Garriques
signals a new company emphasis on the consumer market. Only about 15
percent of Dell’s $56 billion in worldwide revenue last year came from
consumer products.
That has put Dell at a disadvantage as corporate PC sales slowed and
consumer sales boomed. Hewlett-Packard, which has a much stronger
consumer operation, beat Dell to become the No. 1 PC vendor in 2006.
Under Mr. Rollins, the consumer sector was given short shrift. Indeed,
he said in an interview last year that “we have a love-hate relationship
with the consumer PC buyer.”
Mr. Dell wants to show more love. Mr. Garriques will be responsible for
all consumer products Dell sells, including PCs, printers and TVs. His
portfolio will also include product design. Analysts have faulted Dell’s
product design, particularly for its notebooks, and said that was one
reason that Dell’s notebooks have suffered at the hands of competitors
like Hewlett-Packard, Sony and Acer.
“The problem is that the market shifted,” said Steven Baker, an analyst
with NPD, which collects and analyzes consumer market data. “A lot of
their problems are strategic and structural.”
Mr. Garriques, an engineer with an eye for design, is credited with
helping recharge Motorola’s phone sales after he was given
responsibility for the unit in 2004. He helped build Motorola’s handset
business into a $28 billion global business largely because of the Razr
phone.
But sales have been lackluster of late. A report issued yesterday by
Daryl Armstrong, an analyst at Citigroup Research, said senior
management was unhappy with the handset division’s recent performance.
Mr. Garriques’s background suggested to analysts that Dell might make a
foray back into hand-helds and might even try the cellphone business.
Dell has had little success selling hand-helds, printers and televisions.
As Mr. Dell recruits executives from outside, a number of Dell
executives are leaving. In addition to Mr. Rollins and James Schneider,
the former chief financial officer, they include John Hamlin, senior
vice president for global online business and marketing; Paul McKinnon,
the head of human resources; Rosendo G. Parra, senior vice president for
the home and small-business group, and Glenn E. Neland, senior vice
president for procurement.
Mr. Dell also said yesterday that as part of his efforts to cut
bureaucracy and bring in fresh ideas, Dell had set up a Web site called
Idea Storm, at dellideastorm.com, that allows customers to suggest new
products and services and discuss the proposals.
Copyright 2007 The New York Times Company
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