NEWS OF THE WEEK BUSINESS
RHODIA CHIEF OUT Tirouflet resigns; new CEO launches restructuring plan
T
HE CONTINUED SLIPPAGE
of Rhodia's earnings has finally put an end to JeanPierre Tirouflet's tenure as chairman and CEO.
Tirouflet
Tirouflet had been a survivor, narrowly dodging a bulletfiredby minority shareholders at Rhodia's annual meeting last spring. But the
expectation that earnings before taxes for the third quarter would be less than $95 million—a sharp drop from the $175 million posted a year earlier—was apparendy more than Rhodia's board of directors could stand, and they accepted Tirouflet's resignation. Rhodia sees little sign of improvement in the situation— which it blames on the weak dollar, poor demand, and high raw material costs—by the end of the year. So the company has decided on an overhaul in which it will divest businesses worth about $710 million and cut $ 175 million in annual costs. Implementing the plan will be Rhodia's new CEO,Jean-Pierre Clamadieu, 45, who headed the company's pharmaceuticals and agrochemicals division. Rhodia named Yves René Nanot, 66, as vice chairman
BUSINESS
WILLIAM H.JOYCE TO LEAD NALCO Hercules' savior, former Union Carbide chairman, moves on to greener pastures
Joyce
A
FTER SPENDING MORE THAN
two years fighting for the right to lead Hercules out of near bankruptcy William H.Joyce, 67, has inked a deal to become the new chairman and CEO of Nalco. Joyce's appointment will take effect as soon as a group of investors—including the Blackstone Group, Apollo Management, and Goldman Sachs Capital Partners—completes the $4.2 billion leveraged buyout of Nalco from French utility Suez
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later this year. Suez bought Nalco for $4.1 billion in 1999 and is selling it now to pay down debt. It was only in late July that Joyce won a battle to remain CEO at Hercules after dissident board member and ISP Chairman SamuelJ. Heyman tried to unseat him. Ironically Joyce leaves Hercules to head a water treatment business. He sold Hercules' Betz water treatment business to General Electric last year for $1.8 billion to stave off bankruptcy
and will make him the chairman after it lifts age restrictions. Adding to Rhodia's troubles, Standard & Poor's lowered several Rhodia credit ratings in reaction to the third-quarter outlook. S&P analyst Nicolas Baudouin noted that "some of Rhodia'sfinancialcovenants will likely be breached when full-year 2003 results are released," forcing it into early repayment of $1.2 billion in debt while it has only about $825 million in cash. Stock analysts are delighted by the ouster of Tirouflet, whom they blame for making costly acquisitions, like phosphates maker Albright & Wilson and fine chemicals company ChiRex, at the wrong time. "It is definitely a move in the positive direction," one analyst says. 'Tirouflet has done nothing well and, frankly, was hated by investors." However, the same analyst is skeptical about the reform effort, comparing it to "rearranging deck chairs on thelitanic" and raising the specter of an eventual French government bailout.— ALEXTULLO
Nalco, with $2.6 billion in annual sales, is larger than its nearest competitor, GE, which has about $1.6 billion in water treatment sales. Joining Joyce at Nalco as executive vice president and chieffinancialofficer is BradleyJ. Bell, 51, who recently left a similar position at Rohm and Haas. At Hercules, Craig A. Rogerson, 47, becomes acting president and CEO, and recently elected board memberJohn K. Wulff, 54, former chief financial officer of Union Carbide, becomes nonexecutive chairman. An executive recruitmentfirmis now looking for a permanent CEO. Rogerson himself is likely to be a candidate. He previously headed Betz. And although he has spent the bulk of his career at Hercules, from 1998 to 2000 he served as CEO of Wacker Silicones Corp.-M ARC REISCH HTTP://WWW.CEN-ONLINE.ORG
