Joseph Galli tapped for top Newell Rubbermaid post - Brief Article

Home Channel News, Jan 22, 2001

After 18-month Internet sojourn, former Black & Decker president returns to hardlines roots

FREEPORT, ILL. -- Joseph Galli has seen the Promised Land and has turned back.

The 42-year-old former president of Black & Decker is taking on a new challenge in his executive career after being named president and CEO of Newell Rubbermaid, the diversified supplier of home improvement and housewares products based here.

Galli replaces William Sovey, Newell's chairman, who took over the president and CEO slots temporarily in November, when John McDonough resigned from those posts. And only days after assuming his new role, Galli suggested, in an interview with the Wall Street Journal, that the company might sell off a few of its underperforming divisions and would curtail its acquisition activity in favor of expanding "organically." He told the Chicago Tribune that he wanted to "strengthen" Newell's brands -- as he did while at B&D with its DeWalt, VersaPak and Piranha lines -- and deepen its international market penetration.

He added that he's been directed, in no uncertain terms by Newell Rubbermaid's board, to get the company back on financial track to Newell's pre-merger productivity levels. Galli did not return calls from NHCN seeking further comment.

Galli has been among the industry's more transient executives of late. Over the past 18 months, he held high-ranking positions with two different Internet companies. He spent 13 months with Amazon.com, where he was named president and chief operating officer at the time Amazon was launching its store for home improvement products. He left Amazon last July to join VerticalNet, a Pennsylvania-based business-to-business Internet company that runs more than Web sites dedicated to more than 50 specific industries.

Galli's recent career has been unpredictable, if nothing else. He was forced out of B&D, after 19 years with the tool maker, by Nolan Archibald, its chairman, who admitted that he moved Galli out before Galli decided to leave on his own. Right before he took the job at Amazon.com, Galli reportedly had agreed to become president of PepsiCo.'s Frito-Lay division.

His tenure at the Internet companies was marked by their financial instability. Despite strong holiday sales, Amazon.com continues to rack up big losses. VerticalNet's stock fell to $5.31 per share on Jan. 5 from its 52-week high of $148.38, and The Street.com, an Internet news service, reports that some investors are wondering if VerticalNet is long for this world.

At Newell Rubbermaid, Galli is taking over the management of a company still trying to find itself after the $5.8 billion merger of Newell and Rubbermaid. Through the nine months ended Sept. 30, 2000, the latest period for which data were available at press time, Newell Rubbermaid's sales were off 4.6 percent and its net income plummeted to $23.8 million from $327.2 million in the same period a year earlier. Some of that decline is attributable to merger-related restructuring and severance costs. Company officials also blamed the steep rise in raw materials costs that have afflicted manufacturers.

Some analysts, though, see the company's fortunes turning around. In a generally positive article about Newell Rubbermaid that appeared in the Wall Street Journal this month, analysts alluded to the company's recent acquisition of Gillette Co., the jump in its stock price over the past few weeks and the inevitable reduction in raw materials prices as factors that would all work in the company's favor.

In a prepared statement, Sovey, 67 and nearing nearing retirement, said that his company chose Galli because "[w]e were looking for an experienced executive capable of growing a large multinational company who also had considerable experience in the consumer products industry and would be an excellent fit in the Newell Rubbermaid organization. We believe that Joe brings this blend of talent and experience and that under his leadership the company will return to consistent high levels of financial performance."

WELL-EARNED REST

Black & Decker honorary chair retires

Alonzo G. Decker Jr. retired as the honorary chairman of Black & Decker on Jan. 2. The scion of Black & Decker co-founder Alonzo G. Decker Sr., the junior Decker turns 93 this month.

Decker joined the tool manufacturer when he was 14 and was among the first employees to be laid off during the Depression. He held a number of positions during his 60-year tenure at the company: B&D named Decker president in 1960,

CEO in 1964 and chairman of the board in 1968. He relinquished these positions during the 1970s, but continued to serve as a director.

Decker is replaced on the board by M. Anthony Burns, 58, the chairman of logistics and transportation management firm Ryder System Inc.