Wanted: Graybeards to run corporate America

Steve James writing for Reuteurs reported that You can't teach an old dog new tricks and, these days, it's just as well. Old dogs are preferable to the new tricks that brought scandal to corporate America and wrecked Wall Street.

News about corporations cooking the books pops up every other week; smug corporate chieftains plead the Fifth Amendment before U.S. Congress or in court; and Federal Reserve Chairman Alan Greenspan accuses Wall Street and American businesses of "infectious greed."

So U.S. companies are turning against the self-centered Yuppie traders, junk-bond artists and dot-commers spouting Gordon Gekko's "Greed is Good" mantra from the movie "Wall Street".

American business is hot for graying executives with squeaky-clean records -- experienced old dogs to clean up the wreckage left by the fast-and-loose younger executives.

"They (young guns) had an aggressiveness and no sense of where the proper boundaries lie between pushing for earnings and integrity," said John Challenger, chief executive of the Chicago employment firm Challenger, Gray and Christmas.

Old, experienced managers -- derided during the go-go days of the late 1990s -- are a hot item these days.

"In the last three or four years -- in the late years of the 'bubble' -- a lot of seasoned, high-integrity executives did not fit the mold," Challenger said. "They were unwilling to work with the same kind of aggressiveness and willingness to side-step the rules.

The old guard made way for younger, go-getter executives enjoying unlimited success as they rose the dot-com wave of ever-higher stock prices.

THEY'RE BAAAACK!

But now they're coming back -- some out of retirement.

Nordstrom.com, the online retailer, last month brought former executive Ray Johnson, 61, out of retirement to temporarily replace CEO Dan Nordstrom, 39, and President Mike Smith, who both resigned. Johnson had retired in 1996 as co-chairman after working at Nordstrom for 27 years.

In May, Ford Motor Co.appointed former Vice Chairman Allan Gilmour, 67, as chief financial officer -- the third in a year -- to help the automaker recapture investor confidence following losses of $5.45 billion last year.

"I'm glad to see that management finally moved to put in somebody that has greater credibility with Wall Street," Sanford Bernstein analyst Scott Hill said at the time.

And General Motors Corp.brought 70-year-old Bob Lutz out of retirement as chairman of GM North America and vice chairman for product development.

Xerox Corp., which has been struggling to return to profitability, recently named retired International Business Machines Corp.executive Lawrence Zimmerman, 59, as its chief financial officer.

Other graybeards with unsullied reputations have been brought in to clean up some messes. Former Securities and Exchange Commission Chairman Richard Breeden was named by a federal judge to oversee document retention at WorldCom Inc., which recently uncovered improper accounting for more than $3.8 billion in expenses that hid losses.

And Paul Volcker, Greenspan's predecessor as Fed chairman, was hired earlier this year by Arthur Andersen to set up an oversight board to restructure the troubled accounting firm.

"If one thing should be more valuable now, it's credibility," said professor Bart Victor of the Owen Graduate School of Management at Vanderbilt University. "Someone with a proven track record is more reassuring for investors. That's why they are reaching back to people with more experience than just (the strategy of) 'grow, grow, grow.'"

MORE REASSURING FOR INVESTORS

Wall Street now is favoring experience over energy, "which is the opposite of the last decade," Victor said.

"Experience is being revalued after an uncomfortable period for a lot of executives," he said. "The period redefined success as double-digit growth, which was ridiculous. We now see the result of that craziness."

The AARP, formerly known as the American Association of Retired Persons, is seeing more retirees returning to the workplace.

"It has to do with experience," said Deborah Russell, manager of the AARP's Economic Security and Work division. "When they bring former executives back in the workplace, it's a sign they can't afford to run the risk of having unknowns with unknown experience.

"Also, these folk bring a certain level of loyalty to the company," Russell added. "Especially in this climate when there is a perception that business is going down the tubes and there is distrust, the notion they are bringing back seasoned executives is stabilizing."