Tyco Electronics' chief says image is improving: company restoring confidence after tarnishing times - News - Juergen Gromer - Company Business and Marketing

Electronic News, Nov 11, 2002 by Bernard Levine

Few companies have ever had their images tarnished as badly as Tyco International, but Juergen Gromer, the widely respected president of Tyco Electronics, has been battling to restore confidence in his unit, a leading force in connectors and other passive components. And he believes he is succeeding.

"We turned the corner and look positive into the future," Gromer said in an interview last week.

Gromer said he hasn't talked to his former boss, ex-Tyco International CEO Dennis Kozlowski, since the day Kozlowski resigned--just one day before Kozlowski was indicted for evading New York sales taxes. "I was shocked," he said. "He was my boss, but I had no idea what was going on behind the scenes or the activities going on. I had no visibility on things going on that might have been wrong."

Ever since then, Gromer's big challenge has been damage control. He has had to move the attention of customers, employees and others beyond the alleged fraud perpetrated by Kozlowski, who faces criminal charges along with other former company executives. Kozlowski's purchases of everything from opulent homes and expensive artwork to overpriced wastebaskets have been called into question, with any possible ties to Tyco International under heavy scrutiny. While Kozlowski and other former top Tyco officials have denied any wrongdoing, their fate ultimately may be decided in court, where they face various charges, including a civil lawsuit brought by the company.

Gromer said he normally spends about 40 percent of his time visiting customers. He intensified his schedule to deal with the scandal and doesn't believe any customers were lost. "We have good relationships with customers and these don't break because of such an affair. We are in a good position. We are investing in new products, just like in the past. We are pushing our marketing people to do more. For our customers, it is behind us.

"For sure, it was quite a challenge," Gromer said. "The customers had concerns. The employees had concerns. The stock price collapsed more than it would have otherwise."

He praised new Tyco International CEO Ed Breen, brought in from Motorola, and the new CFO David Fitzpatrick for turning things around. "With the change at the top of the company, it showed we are very serious about going back to credibility and honesty. They stated very clearly that they were making essential changes to bring integrity back. I think on the financial side, the work going on with the David Boies team's internal investigation, we all have confidence in our balance sheet position.

"From today, I see no question on our balance sheet. I see the confidence definitely coming back. We went through a rough period but have turned the corner. What happened was tragic, both from a business and personal standpoint. What happened never should have happened. I see it as a personal affair. Most of those involved are now out of the company. We go forward following a clear code of conduct and the best integrity you can see. And Tyco Electronics was not part of any of those affairs. We go forward with the highest integrity," he said.

While Gromer's recent challenge may have been unique, his next big challenge may be similar to that of other industry chieftains-guiding the maker of connectors, relays, switches, circuit protection devices, magnetics, heat sinks, resistors, inductors, and other products through the unending downturn. Tyco Electronics has been outperforming many of its component rivals, Gromer said, and parent Tyco International is a $35.7 billion manufacturing/service company with market-leading positions in many sectors. In addition to electronics, Tyco International business segments include fire and security services, healthcare products, and engineered products and services.

Still, the economic future is not so bright. "I don't see much pick up in the fourth quarter, and in 2003, I don't think it will get better," Gromer said. "Telecom could still go down a little, and the computer side will stay flat."