Toshiba’s PC Chief Bolts Amid Shakeup
By ANDREW SIMONS
The head of Toshiba Corp.’s U.S. computer business has resigned, with more changes expected at the Irvine-based unit.
Rod Keller, who led Toshiba America Information Systems Inc. to become the fastest-growing laptop maker last year only to see sales fall this year, left in late August “for personal reasons,” according to a Toshiba spokeswoman.
Keller’s departure comes just as Toshiba America Information Systems prepares to detail reorganization plans for its computer systems group.
Keller was executive vice president of the computer systems group, a position he held since 2000.
Toshiba, part of the Tokyo-based electronics maker, plans on addressing Keller’s departure and the restructuring of its Irvine computer unit later this month.
Keller’s departure came as a shock to some of his current and former colleagues and industry observers. Keller, who had worked for Toshiba since 1996, is credited with making the company’s computer division competitive with industry stalwarts such as Dell Inc. and Hewlett-Packard Co.
A veteran of Dell and Compaq Computer (now a part of HP), Keller is said to have had a strong understanding of Toshiba’s distributors, resellers and retailers.
Toshiba, along with other PC makers such as HP, depends on distributors to sell products. They do this in a variety of ways, such as offering discounts or rebates on Toshiba computers.
Former Toshiba employees who worked with Keller call him a talented manager and a “visionary” when it came to dealing with customers and distributors. They declined to be named for this story.
Late last year it looked like Keller had the golden touch.
Toshiba drew looks at the Comdex trade show last November with its Portege tablet PC. The device has a movable touch screen that can be used as a laptop computer or as an electronic writing tablet.
In December, industry researcher International Data Corp. named Toshiba the fastest-growing laptop maker with 78% growth in U.S. shipments. At the time, Toshiba was the No. 3 laptop maker in the U.S. and No. 2 worldwide.
On its way up, Toshiba, which had seen sales slow in 2000 and 2001, grabbed share from Dell, a major feat in the laptop business.
“The company has focused its strategy, product line and execution and has reestablished itself as a force to be reckoned with,” International Data analyst Roger Kay said at the time.
“We owe this great achievement to our customers and our phenomenal growth is the true declaration of our success,” Keller said in December.
But the PC business is ultracompetitive. No sooner had Toshiba clawed its way back among the top laptop suppliers than it fell back down again.
Toshiba’s notebook PC shipments fell by 21% globally during the quarter ended June 30, according to International Data.
Toshiba posted a companywide loss of $345 million on sales of $9.3 billion in the quarter, including a $57 million loss at its PC unit.
A report in VARBusiness, a computer industry publication, said “miscues, foibles and bad luck,” have limited growth for Toshiba’s computer systems group since the December rankings.
In April, Toshiba replaced Hisatsugu Nonaka as president and chief executive of Toshiba America Information Systems. His successor is computer industry veteran Hidejiro Shimomitsu, who most recently served as vice president and general manager of Toshiba’s global PC operations.
Last week, reports from Japan said the company was planning a wholesale reorganization of its U.S. PC operations.
While the company hasn’t disclosed its plans, sources close to Keller and Toshiba indicate Keller was to be reassigned to another division,a move he might have seen as undesirable because the computer systems group is one of the company’s largest.
Keller couldn’t be reached for comment.
The reorganization isn’t expected to result in layoffs at the Irvine computer operation, which has about 1,300 workers.
Even so, former employees say some workers there are looking over their shoulders to see if they could be next to go.
In 2000, Toshiba moved its laptop manufacturing to Asia from Irvine, cutting 500 jobs. Since then, the company has made minor job cuts from time to time.
“They were always very sensitive about headcount,” said one employee who worked in Toshiba’s finance department.
Some former Toshiba workers formed a group called Caf & #233; Network to help each other find new jobs. The group originally met at a Starbucks across from Irvine Valley College but outgrew that and now meet at a member’s house.
Caf & #233; Network also includes former employees of Lake Forest’s Western Digital Corp. and Poway-based Gateway Inc., though Toshiba alums make up most of the group.
