AlliedSignal Chief Lawrence A. Bossidy Selected by Peers

29 July 1998

AlliedSignal Chief Lawrence A. Bossidy Selected by Peers as 1998 CEO of the Year - Winner Honored for Leadership of Company Turnaround - To download high-resolution, print-ready JPEG images, click on the thumbnail image above. WARNING: these images are very large (800K+) Click here for caption

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    NEW YORK--July 29, 1998--Lawrence A. Bossidy, Chairman of the Board and Chief Executive Officer (CEO) of advanced technology and manufacturing company AlliedSignal Inc., has been chosen by his peers as Chief Executive's 1998 CEO of the Year. Bossidy, whose selection as CEO of the Year is detailed in the July/August issue of the magazine, becomes the 13th recipient of the annual award. Past honorees include Bill Gates, co-founder and CEO of Microsoft (1994); Andy Grove, former CEO of Intel (1997); and Jack Welch, CEO of General Electric (1993).
    Commenting on the selection of Bossidy, Andy Grove, head of the 1998 selection committee, said, "I have tremendous respect for a solid, no nonsense, down-to-earth leader who takes an unglamorous job and does spectacular things."
    During Bossidy's tenure, which began in mid-1991, AlliedSignal transformed itself from a collection of 52 splintered, largely domestic businesses into eleven global business units with average sales of more than $1 billion each. The company's primary industries include aerospace (engines, flight safety equipment, landing systems, repair and overhaul services); transportation (turbochargers, truck brakes); and advanced materials (specialty chemicals, plastics, refrigerants, fibers).
    Under Larry Bossidy's leadership, AlliedSignal's accomplishments include: Market capitalization has increased more than six-fold. A total return on its stock of 508%, compared with 180% for S&P 500. Operating margins have risen from 4.7% to 13.3% (current). Productivity has increased at an average annual rate of nearly 6%. Twenty-six consecutive quarters of earnings increases of 14% or more. Annual average CAGR net income growth of 23%.
    "Larry Bossidy led one of the most remarkable turnarounds in corporate history," said J.P. Donlon, Editor-in-Chief of Chief Executive. "He took a group of cyclical, low-margin, low-growth businesses and turned them into a global powerhouse that is well positioned to continue its success long after he retires."
    Bossidy's success at AlliedSignal is rooted in his key management strategies:

Portfolio shift
    By divesting the company's cyclical, low-growth businesses and investing in higher growth, high-margin businesses, the company has been able to provide a steady stream of earnings increases.

Build bench strength
    Bossidy prioritized recruiting and retaining the best employees. In 1991, 80% of open positions were filled by external candidates. By implementing a program that requires every employee to receive 40 hours of job-related, company-paid training a year, the company built employees' skills and morale. Currently, nearly 75% of job postings are filled internally.

Make employees owners
    More than 40,000 AlliedSignal employees have benefited from the rise in AlliedSignal's stock through their participation in the company's Savings Plan. Cited by USA Today as "one of the country's most generous 401(k) plans," AlliedSignal matches dollar for dollar on the first 8% of an employee's base pay. AlliedSignal employees represent the largest single group of shareowners of the company's stock.

Growth and productivity
    Apart from merely cost-cutting, Bossidy has focused on how to position the company for the future by positioning growth and productivity as the cornerstones of its business plans.
    "Larry is a quick thinker, who energizes others around him," commented Jack Welch, who has known Bossidy for more than 30 years from their days at General Electric. "When he gets behind an idea, he lights up a room. He has both the mental toughness as well as the broad perspective that is necessary to lead and deliver results."

Note to Editors:

Chief Executive
    Every year since 1986, Chief Executive has solicited reader nominations of current CEOs for CEO of the Year. The magazine submits the names and detailed backgrounds of the 10 most frequently cited candidates to a selection committee that is composed of the candidates' peers and chaired by the previous year's winner. The panel takes into account a number of factors, including versatility in guiding an enterprise, pioneering a company in international markets, managing technological innovation and demonstrating excellence under varying conditions. Superior financial results, while considered, do not govern the outcome; just as important are vision, integrity, competitiveness, leadership qualities and the ability to develop and nurture talent.
    Chief Executive, founded in 1977, is a publication written by, for and about CEOs. Over the years, its pages have served as a forum for corporate leaders to exchange ideas, share concerns and explore the challenges presented by the ever-changing business environment. Chief Executive presents authoritative coverage on changing ideas about growth, markets, management and the political economy. In addition, the magazine holds monthly roundtable events that convene CEOs for peer-to-peer discussions of critical issues.

AlliedSignal
    Based in Morris Township, New Jersey, AlliedSignal Inc. is an advanced technology and manufacturing company serving customers worldwide with aerospace and automotive products, chemicals, fibers, plastics and advanced materials. Its 1997 sales were $14.5 billion. The company, a component of the Dow Jones Industrial Average, employs 71,000 people at 300 facilities in 40 countries. Information about AlliedSignal is available on the Internet at http://www.alliedsignal.com/.