DETROIT — Bob Lutz wants to spend time developing a grand strategy for the world's largest battery maker. With his newly hired president and chief operating officer, Lutz has that freedom. Craig Muhlhauser, who had been president of Visteon Corp., has begun picking up Lutz's many daily duties at Exide Corp. Wall Street, too, has a task list:
Focus on high-margin business opportunities.
Cut Exide's debt.
Improve returns on invested capital.
Sell underperforming plants.
Close distribution centers in Europe.
Muhlhauser's arrival will free up Lutz, said Ken Kring, a partner with the Philadelphia office of Heidrick & Struggles Inc., the headhunting firm that helped recruit Muhlhauser. "Bob has been working a lot of long hours. He wants to be the [chief executive officer], not the CEO and COO."
Muhlhauser, 51, said the job "is just an incredible fit; it will be a lot of fun."
The hiring of Muhlhauser last month solves a problem Lutz thought he had fixed. In September Lutz hired Alan Johnson from Federal-Mogul Corp. to be his president and COO. But Johnson resigned after eight months and returned to Federal-Mogul, an automotive sealing and lighting giant in Southfield, Mich.
That left Lutz alone at the top to handle the company reorganization and rebuilding — challenges inherited when he took the job last fall.
The company, based in Reading, Pa., still is struggling to make a profit. A costly deal with Sears Roebuck & Co. to supply DieHard batteries was dissolved last year when the giant retailer refused the price increase Lutz sought. Exide supplied 4 million batteries under that contract.
The warm weather also hurt this year. Most of North America had an unseasonably mild winter, limiting demand for replacement batteries. Exide generated about 65 percent of its total revenue during fiscal 1999 from the sale of automotive batteries.
The company lost $130 million for its last full fiscal year, ended March 31, 1999, on sales of $2.4 billion. For the nine months ended Dec. 31, Exide posted a net loss of $8.71 million on sales of $1.69 billion.
Despite the challenge, there was no shortage of applicants for Johnson's job when he announced his resignation in April. Recruiter Kring said eight high-caliber executives wanted the job.
"It was the Lutz factor that created the interest," he said, referring to the charisma surrounding the former Chrysler Corp., BMW AG and Ford of Europe executive.
Along with Muhlhauser, Lutz also hired a new chief chief financial officer, Kevin Morano, 46. He had been president and COO of Asarco Inc., a mining and chemical firm. Morano replaced James Diasio, who left Exide.
For Muhlhauser, the opportunity to work with Lutz was a big factor. The word came just hours after Ford Motor Co. announced its planned spinoff of Visteon, the world's second-largest supplier of original equipment parts.
Of Muhlhauser's resignation, his former boss, Visteon Chairman and CEO Peter Pestillo, told a Detroit newspaper that "Craig had a sense that he was going to be No. 2 for a significant period."
Muhlhauser, 51, declined to comment on Pestillo's remarks. He also would not comment when asked if Visteon executives would follow him to Exide.
Muhlhauser will be No. 2 at Exide as well, but is expected to have freedom of operation. "Bob is the big-picture guy," Kring said.
Exide is recasting its global business units along customer lines, not geography. The goal is to be a more nimble supplier. Its largest customers include DaimlerChrysler AG, plus Kmart Corp. and other retail giants.
Wall Street will be eager to see Muhlhauser's turnaround efforts. When Lutz was named chairman and CEO last November, shares rose $3.13 to $17.27, nearly a 52-week high. They traded at $9.25 early last week.
Muhlhauser, who spent much of his career in the aerospace industry, said he would seek growth in new products, especially those with high technology. The balance sheet also will get his attention.
He said he plans to save money by cutting waste here and abroad. Plans for North America were not disclosed, but he said he might close plants and distribution centers in Europe. And he is expected to continue plans to sell five nonstrategic business units.
Wall Street, he said, expects change. Muhlhauser said he plans to deliver.