Making it clear that it really does recognise that the only way to revitalise its languishing business units is to hire outsiders for some of the key positions, IBM Corp late Friday announced that as well as making its AdStar Inc storage unit a wholly-owned subsidiary, it had hired industry veteran Ed Zschau, System Industries Inc founder and one-term Republican representative, to be its chairman and chief executive – and an IBM vice-president, relegating the unit’s former general manager Ray AbuZayyad to the post of president and chief operating officer. AdStar, which employs just under 16,000 people, failed to perform last year, with turnover down 12% at $6,110m, and a net loss of $265m after restructuring charges. It made a profit of $247m at the operating level, but did only $500m of business with the outside world, lagging far behind the leaders in the OEM disk business. IBM noted that Zschau had been tapped for the post before Louis Gerstner came aboard as its new chairman, and said that there were no plans to offer AdStar shares to the public. IBM’s only comparable current full subsidiary is IBM Credit Corp.
