When Eric Doggett took the helm of Glenayre Technologies Inc. three months ago, he found himself captain of a ship lost at sea.
A slowdown in the global paging infrastructure market took much wind out of the company’s sails, while problems with paging device production and overall poor financial status caused former President and Chief Executive Officer Gary Smith to jump ship.
But Doggett last week promised to get the company back on course, unveiling early details of a sweeping, companywide reorganization he said will leverage Glenayre’s strengths to better face the messaging market of the future.
Central to the plan is the consolidation of Glenayre’s paging infrastructure, device manufacturing and integrated networks units into a more unified structure.
“The company (previously) operated as several independent companies maximizing their positions in their own space … but they haven’t worked together cohesively,” Doggett said. “We’ve had instances where three different sales people have contacted the same account.”
Going forward, the company will be organized into the following groups-products, worldwide sales, operations and a consumer products strategic business unit.
While further details of the reorganization have yet to be determined, Doggett detailed the company’s new executive structure.
Warren Neuburger, executive vice president of products and previously head of the Integrated Networks Group, will manage the consolidated products management, engineering and customer service functions of the company. Bill Edwards, former manager of sales for the Integrated Networks Group, was appointed senior vice president of worldwide sales. John Rottenburg, senior vice president of operations, will be responsible for all manufacturing and logistics.
Additionally, Gary Hermansen, previously head of the Wireless Access Group pager manufacturing unit, was named senior vice president and general manager of the consumer products business unit. Stan Ciepcielinski, formerly chief operating officer, will resume his original duties as chief financial officer. Dogget holds the president and CEO title.
To try to reduce expenses in several areas next year, Doggett said he is changing the process for allocating and managing spending, as well as establishing new selling, administrative and research and development strategies.
Finally, Glenayre will transition all manufacturing to its Quincy, Ill., facility.
The motto behind the restructuring is “Solutions for an @ctive World.”
“Our focus is to be enablers and facilitators for people on the go,” Doggett explained. “Our goal is to offer carriers of all network technologies complete end-to-end consumer messaging solutions. Our new structure will better enable us to leverage our strengths in wireless data, unified messaging, data-centric devices and partnering to achieve this goal.”
The need to change
The need for some kind of change at Glenayre is painfully evident. While the company has been the undisputed leader in the paging infrastructure market, it essentially is a big fish in an ever-shrinking pond.
Internationally, the Asian markets have not expanded as rapidly as originally thought. Domestically, several paging carriers have opted to resell PageMart Wireless Inc.’s ReFLEX 25 network for now, delaying the buildout of their own networks for several years.
Given these developments, Glenayre’s wish to diversify beyond paging infrastructure comes as no surprise. The company reported a second-quarter net loss of $61.3 million, almost a dollar per share, citing at the time “significantly less than expected” paging orders and sales.
“Paging infrastructure represents only about half our revenue,” Doggett said. “We’re going to go into other areas, such as voice messaging and unified messaging … I believe there is a rapidly growing enthusiastic market for wireless messaging devices in cellular and PCS markets-not just for the device business, but also on all the back-end infrastructure in developing unified messaging. We’re in that already; we’re just not known for it.”
Indeed, the company spent the last year trying to expand beyond the paging infrastructure business, long before Doggett joined, and even debuted new products in that effort-such as the unified and voice messaging solutions introduced at last year’s Personal Communications Industry Association trade show in Orlando, Fla.
The reorganization announced last week, however, represents the boldest step made by Glenayre to date. “It’s still a good business; we just need to line up (our resources) and address it more effectively.”
The Motorola relationship
The reorganization is just one manifestation of this new vision. Another is the new direction of Glenayre’s ongoing licensing negotiations with Motorola Inc. Initially, the negotiations centered around Glenayre licensing nearly all of Motorola’s FLEX-based infrastructure products. It also created a joint development fund dedicated to marketing and developing two-way paging products and services, and to sponsor developer conferences, advertising, market research, studies and symposiums to further promote FLEX worldwide.
But Doggett said those talks have expanded in scope, and will take longer. “The talks have slowed down to include more areas,” he said. “It’s an opportunity to see how we can form a more strategic agreement that could result in something more significant to the industry overall … A lot has changed since the original announcement went out. The original announcement is much less interesting.”
With the internal restructuring under way, Doggett said he expects to turn his attention outward. He said his first mission was to make sure Glenayre’s defense was solid enough to take into battle. The next step is to get aggressive. He predicted the first such moves will be made next week at the PCS ’99 show in New Orleans.
“From PCS on, you will start seeing the offensive part of it,” he said.
