IBM shares fall on Akers fears

Click to follow
The Independent Online
NEW QUESTIONS about the strength of IBM's management under chief executive John Akers prompted sales of the computer maker's shares yesterday, forcing their price to a new low.

IBM revealed that it has recalled two senior executives from retirement to help with the corporation's multi-billion-dollar restructuring. Investment managers also said they were disturbed by ambiguous comments about Mr Akers' abilities made by a predecessor, Thomas Watson Jr, in an interview in yesterday's Wall Street Journal.

In afternoon trading, IBM shares were down 2 1/4 at 48 1/8 .

Although it was Mr Akers who decided to retain former vice- chairmen Paul Rizzo and Kaspar Cassani, analysts said the move is an indication of doubts about his management of IBM's current crisis. Others said it is an admission that IBM's management lacks depth after a purge of senior executives by Mr Akers.

Mr Rizzo, 64, is expected to help in the planned devolution of IBM's divisions into more autonomous units. Mr Cassani, 64, who retired from IBM Europe three years ago, is likely to help revive the company's flagging sales in what was until recently its most profitable market.

At least as upsetting, one large IBM shareholder said yesterday, was the cautious support that Mr Watson, 78, gave to Mr Akers.

Mr Watson said he 'has a lot of admiration' for Mr Akers. 'I think he's done his very best. I have every confidence they'll prevail,' he said.

Mr Akers has faced growing criticism for not reacting quickly enough to changes in the computer market.

In its attempt to restructure, IBM has shed a quarter of its workforce and charged off more than dollars 20bn in the past two years.

Last week, Mr Akers announced that the firm's dividend was no longer assured, and that it might abandon its lifetime job guarantees for employees.