Herman Miller Names Walker Its COO
Though tempered somewhat by a follow-up announcement last week of further job cuts, Walker's appointment recognizes the key role he played as president of North American operations in helping to restructure and return Herman Miller to profitability even as revenues tumbled and business conditions further deteriorated.
"We could not have navigated the turbulent waters of the past 18 months without Brian Walker's exceptional leadership," Volkema said in a prepared statement that was followed up days later with the latest layoff announcement. "His promotion is not only in recognition of his past performance, but signals our intent to better leverage our capabilities worldwide."
In giving up the title of president and promoting Walker, Volkema restored the role of COO to Herman Miller, a position last held by Volkema prior to his 1995 appointment as CEO.
The change in duties enables Volkema to spend "a great deal more energy and time on new business opportunities and development" and strategic direction, as well as working with major clients, as Herman Miller continues to cope with the downturn and an eventual recovery, spokesman Bruce Buursma said.
The downturn led Herman Miller, citing further softening of orders, last week to lay off another 115 manufacturing employees, effective today, and eliminate 150 office and indirect production jobs. Those job cuts are on top of the thousands of positions eliminated at Herman Miller, as well as at rivals Steelcase Inc. and Haworth Inc., in response to the industry downturn.
Walker, 40, previously served as head of Herman Miller's North American operations, which accounts for 85 percent of corporate revenues. As COO, he will lead all global operations.
"Mike has plenty to do in his role as CEO and chairman and he sees in Brian a person who has the talent and the energy and the effectiveness to move into the leadership position for both of the Herman Miller markets," Buursma said.
Walker joined Herman Miller in 1989 and served as chief financial officer for three years prior to his appointment in December 1999 as president of North America. Outside of the company, he serves on the board of directors at Brown Corp. and Briggs and Stratton Corp. and on the International Advisory Board for Stern Stewart & Co.
Herman Miller, meanwhile, is scheduled to report its latest quarterly sales and earnings results next week. The company expects to post net income on the low end of previous guidance of 3 cents to 7 cents per share on revenues of $310 million to $330 million.
The cuts will result in pre-tax charges of $5 million in the fourth quarter that started March 1, generating annualized savings of $8 million to $9 million, Chief Financial Officer Elizabeth Nickels said.
"Herman Miller's variable cost structure, coupled with the continued implementation of earlier cost-reduction initiatives, will enable us to meet the lower end of third quarter earnings guidance on slightly lower-than-expected volume," Nickels said. "But we also recognize the present geo-political and economic environment has raised new challenges and we remain committed to aligning our cost structure with current market conditions."
Steelcase, which this month announced further job cuts and a one-week shutdown of its plants, reports annual and quarterly sales and earnings on April 1. Brokerage analysts polled by Thomson First Call expect the company to lose 9 cents per share.