What they're saying

Electronic News, Oct 5, 1992 by Bernard Levine

AMP's chairman and CEO is retiring and there are two men at the company with strong dibs to succeed him. One helped build the firm's stellar international operations, the other successfully led the domestic business through a difficult restructuring in recent years. What to do?

If you're AMP, you divide up the duties, naming William Hudson, currently executive vice-president of international, to be president and CEO, while naming current president James Marley as chairman when Harold McInnes retires at year-end at the firm's mandatory age of 65.

Connector industry watchers point to the growing importance of offshore business in the decision by AMP's board to promote Mr. Hudson to the CEO slot. At the same time, the company has said the pair will continue to function as a team, although the exact division of duties has not yet been worked out, but international operations are expected to continue to report to Mr. Hudson, while a number of other key functions report to Mr. Marley.

About 60 percent of worldwide connector leader AMP's $3 billion plus annual sales are already offshore, and the international proportion is expected to increase in coming years under Mr. Hudson's direction. Analysts note Mr. Hudson, 58, enjoyed particular success in Japan, where AMP is the top seller, and elsewhere in the Far East, where he lived for many years.

Analysts give Mr. Marley, 57, high marks for AMP's domestic performance, including an effective scaling back of facilities and personnel to match a downsized U.S. market. The pair could be set at the AMP helm for much of the nineties, some suggest.

"They work very well as a team," said Merrill Lynch analyst Jerry Labowitz. "Mr. Hudson has global experience, including in the Far East for a number of years. He had been in the Pacific region from '83 until about two years ago. As international plays a more important role in AMP's business, Mr. Hudson is the AMP manager at the top level who spent more time in overseas operations than anyone else, while Mr. Marley has tremendous domestic experience. I think it's terrific."

Mr. Labowitz added "I want to stress that it's a team. They are dividing responsibilities. It is a natural evolution in AMP's management. These are two guys who each have about 30 years of experience with the company. It is a good, natural evolutionary transformation as Mr. McInnes retires. This is the first time AMP's management is headed by a team with hands-on international experience."

Prudential Securities analyst Rick Billy noted the moves "are no surprise. The line of succession was set up two years ago when Mr. Hudson was brought back to the U.S. It makes sense. Continuity is important to AMP, and these are the two best guys running the show." He added that Mr. Hudson "clearly has had a big hand in AMP for a long time. International is where most of their growth is coming from. They say by the end of the decade, two-thirds (or more) of their sales will be international." As for Mr. Marley, "He had tough conditions domestically, but AMP's market share has been rising, which is all you can ask."

Added Ron Bishop of Bishop & Associates, "Both men have been very successful in their careers and AMP is obviously trying to reward both. I think the approach that AMP took with two highly capable industry executives is highly appropriate and very smart. Both can make a tremendous contribution to AMP."

Mr. McInnes noted the moves continue the AMP tradition of evolutionary management succession from within. "I am very confident that the goals, strategies and policies the management team has developed through the years will serve as an excellent foundation for AMP's continued success in the 1990s." Mr. McInnes will continue on the board and succeed Walter Raab as chairman of the board's executive committee. Mr. Raab, who retired in 1990 as AMP chairman and CEO, will continue as a board member.