Word: araskog
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Dates: during 1980-1989
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...takeover sharks, who are likely to chop far more brutally and indiscriminately than the present managements. No less a titan than ITT warily shook off a takeover bid by Raider Irwin Jacobs in 1985. That effort gave renewed impetus to a slimming exercise already begun by ITT Chairman Rand Araskog. Since 1980, Araskog has sold off more than 100 businesses, and last year he cut ITT's work force by 100,000, or 44%, and slashed headquarters staff from about 850 to 350. Says Araskog: "Corporate executives have to learn to do things for themselves. Pick up the telephone...
While telecommunications experts were shocked by the magnitude of the proposal, it would merely be the latest in a string of major divestitures by ITT. Since he took charge of the company in 1979, Chairman Rand Araskog has spun off some 95 businesses worth about $4 billion. Meanwhile, he has channeled resources into such prized divisions as the Hartford insurance company and the Sheraton chain of 488 hotels and resorts. Says Herbert Goodfriend, a telecommunications analyst at Prudential-Bache: "Araskog is dismantling Harold Geneen's empire...
...Araskog has good reason to want to shed much of the ITT communications network, particularly System 12, a computerized switching board that telephone companies use to route calls. The unit, which cost $1 billion to develop, sold well after it was unveiled in Europe in 1979, but it has turned a profit only in West Germany and Italy. Araskog thought that if he could adapt System 12 to U.S. standards, he could sell it to the regional Bell companies, which were formed after the AT&T breakup in 1984. But ITT was unable to write software that would mesh System...
...Araskog shocked Wall Street in July by slashing ITT's quarterly dividends by 64%, from 69 cents to 25 cents per share. ITT's stock price, which reached 47 3/4 in 1983, was at 31 3/8 before last week's divestiture announcement. Investors seemed unimpressed by the plan, and the stock closed the week...
...back on a growth path, Araskog has launched a major offensive in the U.S. telecommunications and office-equipment markets. The company has long been a major supplier of sophisticated telecommunications gear in Western Europe but was effectively shut out of the American market until last year's breakup of AT&T. Now ITT hopes to sell an advanced switchboard, known as System 12, to some of the new regional Bell companies. However, it faces formidable competition from several firms, including AT&T, GTE and Northern Telecom. In the office-equipment field, ITT has come out with a personal computer...