Stephen J. Luczo - Seagate

Seagate

Luczo joined Seagate Technology in October 1993 as Senior Vice President of Corporate Development. In March 1995, he was appointed Executive Vice President of Corporate Development and Chief Operating Officer of Seagate Software Holdings. In 1996, Luczo led the Seagate acquisition of Conner Peripherals, creating the world’s largest disk drive manufacturer and completed the company’s strategy of vertical integration and ownership of key disk drive components. In September 1997, he was promoted to the position of President and Chief Operating Officer of Seagate Technology, Inc. In 1997, Seagate experienced a downturn, along with the rest of the industry, and launched a restructuring effort. In July 1998, the CEO Alan Shugart was asked to resign and Luczo became the new Chief Executive Officer, joining the Board of Directors.

Historically, Seagate's design centers had been organized around function, with one product line manager in charge of tracking the progress of all programs. In 1998, Luczo and CTO Tom Porter characterized the organizational redesign of design centers into core teams organized around individual projects, to meet the corporate objective of faster time to market. As the CEO, Luczo decided to increase investment in technology, and to diversify into faster-growing, higher-margin businesses. He decided to implement a highly automated platform strategy for manufacturing. Between 1997 and 2004, Seagate reduced its headcount from approximately 111,000 to approximately 50,000, rationalized its factory footprint from 24 factories to 11 factories and reduced design centers form seven to three. During this period, Seagate output increased from approximately 9 million drives per quarter to approximately 20 million drives per quarter.

In May 1999, Seagate sold its Network & Storage Management Group (NSMG) to VERITAS Software in return for 155 million shares of VERITAS's stock. With this deal, Seagate became the largest shareholder in VERITAS, with an ownership stake of more than 40%. However, the Seagate Board of Directors felt that the market was incredibly under pricing Seagate's stock, as was clear from a 200% increase in VERITAS stock versus only a 25% increase in Seagate's stock.

Luczo led the management buyout of Seagate in 2000. He believed that Seagate needed to make significant capital investments to achieve its goals. He decided to turn the company private, since disk drive producers had a hard time obtaining capital for long-term projects. In early November 1999, Luzco met with representatives of Silver Lake Partners to discuss a major restructuring of Seagate. After two failed attempts to increase Seagate's stock price and unlock its value from VERITAS, Seagate's Board of Directors authorized Luzco to seek advice from Morgan Stanley in October 1999. In early November 1999, Morgan Stanley arranged a meeting between Seagate executives and representatives of Silver Lake Partners. On November 22, 2000, Seagate management, VERITAS Software, and an investor group led by Silver Lake closed a complex deal taking Seagate private in what was at the time the largest buyout ever of a technology company. Both the Stanford Graduate School of Business and the Harvard Business School have written multiple case studies on the Seagate buyout and turnaround. In addition, several leading management books have cited the Seagate turnaround in the contents.

Luczo became the Chairman of the Board of Directors of Seagate Technology on June 19, 2002. In 2003, he accepted an invitation from the New York Stock Exchange to join its Listed Companies Advisory Committee. When the company separated the roles of chairman and CEO in 2004, Luczo resigned as the Seagate CEO on July 3, 2004, but retained his position as Chairman of the Board of Directors.

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