Wang Plans Future After Founder’s Death
BOSTON (AP) _ Finding a successor to its late founder, An Wang, should not be as difficult for Wang Laboratories Inc. as it may be for the company to rebound from recent losses and regain customer confidence.
The board of directors of the Lowell-based company is scheduled to meet Wednesday to discuss who will succeed Wang as chairman and chief executive officer.
Wang, who struggled against cancer for months, died Saturday at age 70.
But while the company has struggled recently, analysts said the company already made an important leadership change last year when it named Richard Miller as president. Miller took the job from Wang’s son, Frederick Wang, who was ousted after the company’s fortunes tumbled.
Analysts expect Miller to take the CEO job and possibly ascend to chairman.
In a statement after his father’s death, Frederick Wang said on behalf of his family, ″We support Rick Miller and the other members of the Wang management team in their efforts to build a strong and growing company.″
The statement said the family ″believes that the long-term plan now being implemented to return the company to profitability will achieve its objectives.″
Under the leadership of the company’s founder, Wang became a multibillion- dol lar company, largely as a pioneer in word processors. But analysts said the company stumbled when it failed to react quickly to the growth in personal computers, which largely replaced the need for word processors.
The company moved into the mid-range computer market, but that segment has been slumping, and Wang posted a $424.3 million loss for the year that ended last June 30.
Since Miller, a former General Electric Co. executive, took over in August, he slashed the work force and sold off assets to reduce the company’s debt.
Wang now employs about 22,500 people, compared with 28,000 at the end of the last fiscal year. Its bank debt has shrunk from $575 million to under $100 million.
Also under Miller, Wang has moved out of its ″closed,″ or proprietary, products and said it will make more equipment that uses increasingly popular industrywide standards. This strategy is part of Miller’s plan to make Wang more responsive to customer needs.
″I think the big changes have already occurred,″ said Fred Pastore, an analyst at Moody’s Investors Service Inc. ″I think we will see a much more focused Wang.″
″Wang has made the kind of moves the company needs to make to survive,″ said Steven Wendler, an analyst at the research firm Gartner Group Inc.
Wang is becoming better aligned with the market, Wendler said, but Miller still must solve the company’s poor history of customer service that has left many clients unhappy.
While some analysts speculate that Wang could become a takeover target, Wendler described the customer service as an ″Achilles heel″ that could dissuade potential suitors.
″Wang has a large installed base, but it’s an unhappy installed base,″ Wendler said. ″If you’re an investor, you look at it like damaged goods.
″The long term for Wang is still very cloudy,″ he said.
In the company statement, the Wang family said it ″intends to retain their ownership position″ in the company. The family effectively has control over the company, with the power to elect three-quarters of the board of directors.
Part of Wang’s long-term strategy is to concentrate on image processing, in which computers store and manipulate the actual images of documents. Analysts say the market for image processing is expected to grow to $3 billion annually in the next few years.