Word: breen
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Dates: during 2000-2009
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...true test of success is performance, and the new Tyco is just starting to prove itself. Investors have responded to Breen's bold governance reforms in the first year, but they are now looking for old-fashioned profits. "We need to achieve the operational and financial goals that we've stated to investors," says David FitzPatrick, Tyco's chief financial officer. To make that happen, Tyco's new management team has to correct years of apparent operational neglect. David Robinson, the new head of the Fire & Security division, says that when he arrived at Tyco last March, he found "hundreds...
...While Breen's overhaul is improving margins, Tyco is still "a little behind the curve," says Joel Levington, an analyst at Standard & Poor's. He notes that Tyco's recent gains in efficiency had been accomplished by most other industrial manufacturers several years earlier. Once Tyco catches up, it will have to find ways to drive organic growth--increasing revenue by adding customers and developing new products, rather than just finding one-off savings by streamlining business models. Healthcare has already started to do that, but Tyco's other business units have further to climb. Still, a sustained rebound...
Eventually, Tyco will again start acquiring and may even consider a major "transformational" deal, says FitzPatrick. But that's likely to be at least two years off, as banks wait to see whether the company can continue to pay down debt. Breen has pledged to come up with an annual $1 billion in cash over the next several years to reduce debt. "There's nothing like cash to prove you got a great company," he says. Tyco may also need a cushion against claims from shareholder lawsuits for mismanagement under Kozlowski--which some analysts say could amount to $10 billion...
...amid the doubts and daily press reports of Kozlowski's trial, Breen says he's staying focused on the "blocking and tackling" of just running a company. And with the numbers starting to turn in his favor, he is even hoping to take his first vacation since joining Tyco. It won't be to a Mediterranean island for an over-the-top toga party a la Kozlowski (the bad). Instead, Breen (the good) is thinking of taking a few days at home in New Hope, Pa., when his children come home for spring break. Tyco shareholders might be thankful...
TYCO TRIAGE Ed Breen is trying to revive a company that had come to symbolize corporate greed...