Xerox Corp. (XRX) Chairman and Chief Executive Anne M. Mulcahy,
known for turning around the company during her eight-year tenure,
will retire as head of the company, ceding the position to her
hand-picked successor, President Ursula M. Burns.
The 56-year-old Mulcahy, who will continue as chairman of the
board after relinquishing the CEO title July 1, leaves Burns to
navigate Xerox as it relies increasingly on the services side of
its business to counter the steady decline of printing, which is
suffering as more information is exchanged digitally.
While the 50-year-old Burns had been projected as Mulcahy's
heir-apparent since becoming president in 2007, the timing of the
move surprised company followers. In addition, Burns' promotion -
made during Xerox's annual shareholder meeting Thursday - makes her
the only African-American female chief executive among the Fortune
500's top 150 companies.
Xerox, Norwalk, Conn., makes printers both for offices and
large-scale production, but garners most of its sales from its
services businesses, which include maintenance contracts, printing
supplies and lease revenues.
The recession has exacerbated weak demand for printers, and
results have been muted by a strong dollar as much of its revenue
comes from overseas.
Nonetheless, Xerox is perceived to be in solid shape - and
certainly much stronger than the near-bankrupt condition which
Mulcahy assumed in July 2001.
"Despite a tough economy, we are generating cash, building our
technology and services pipeline, and poised for a period of steady
profitable growth in the future," Mulcahy said Thursday in a press
release.
She added that it was a privilege leading Xerox, and that Burns
"is so well positioned to take Xerox to the next level."
Xerox spokesman Carl Langsenkamp said Mulcahy places tremendous
value on succession planning, and has "prepared Xerox for the time
when she chose to retire." Shannon Cross of Cross Research
acknowledged as much by describing the promotion as "long
telegraphed."
Burns will not keep the president post, and Langsenkamp said the
company doesn't intend to name a replacement.
Xerox shares recently fell 7 cents, or 1.1%, to $6.83. Despite a
rebound in the past two months, the stock is still off by 50% in
the last year.
When Mulcahy took over as CEO in July 2001, the stock was
trading between $7.45 and $9.68. Since then, the stock rose as high
as $20.18 in July 2007, before sliding to low of $4.12 in
March.
Mulcahy became CEO of a company struggling after a string of
quarterly losses amid falling market share and a probe regarding
Xerox's accounting practices. Its copier business was dying, debt
was piled high, and she was soon forced to concede that Xerox had
an "unsustainable business model."
Mulcahy, who joined the company in 1976 as a sales
representative, rescued Xerox from near-bankruptcy by rebuilding
relations with customers; cutting costs through the outsourcing of
manufacturing and back-office operations; introducing new products,
such as multifunction devices; selling preferred stock and most of
the company's Asian operations; and resolving the government probe
by paying a then-record $10 million fine.
She also is credited with expanding Xerox's business beyond
traditional copiers and printers into the computer systems used by
customers to manage documents, as well as into consulting
services.
One of her skills is motivating the troops. "She stands out as
being an extraordinary communicator in dark times," Robert Bruner,
dean of the University of Virginia's Darden School of Business,
said in a Wall Street Journal article last year.
Burns, meanwhile, is seen as a significant contributor to
Mulcahy's achievements. For example, Burns is credited with
successfully negotiating with company unions to eliminate or
outsource thousands of jobs in 2001, a key part of Xerox's
rebound.
Burns, who grew up in a New York City public housing project and
got a master's degree in engineering from Columbia University, is a
Xerox lifer who started her Xerox career as mechanical engineering
summer intern in 1980. She vaulted into executive ranks after a
stint as a special assistant to Xerox's former chief executive,
Paul Allaire.
She is known for her blunt directness in speech and actions, and
has spoken with a deep appreciation of the company's culture that
preaches "diversity, quality...and pride in the brand."
Both Burns and Mulcahy have received much recognition for their
place in business, appearing high in any list that ranks the most
powerful women. However, Mulcahy - a regular top-ten member of The
Wall Street Journal's annual "Women to Watch" list - said in 2006
that she looks forward to moving beyond gender.
"I yearn for the day when...the word 'woman' is not an
unofficial part of my title...for the day when there is no need nor
interest in a list of most powerful women in business," Mulcahy
said at the time.
-By Jerry A. DiColo, Dow Jones Newswires; 201-938-5670;
jerry.dicolo@dowjones.com
(Kerry E. Grace contributed to this report.)