STAMFORD, Conn. -- GTE Corp. Chairman James L. Johnson Monday announced the long-awaited reorganization of the $15 billion corporation, splitting it into six operating groups all to report to the newly promoted President and Chief Operating Officer Charles E. Lee.
Simultaneously, Johnson also announced the promotion of Kent B. Foster to president of GTE Telephone Operations, the largest operating group accounting for 70 percent of the corporation's revenue. Foster, who had been group vice president, was instrumental in the decision to move the $12 billion telephone operations to the Dallas suburb of Irving announced last November.
The only suspense in the organization was who would head the telephone operations. The promotion of Foster, who like Lee is reported to be in tune with Johnson's management style, was seen by Wall Street analysts as strengthening the chairman's hands.
'It is a big promotion for Foster. However, there may not have been too many people competing with him. At GTE, you are either part of the team or you find employment elsewhere,' said Joel Gross at Donaldson Lufkin & Jenrette in New York.
He said the reorganization should have little impact on the corporation's future earnings. He said he has not changed his forecast of $3.55 a share for 1988 and $3.95 a share in 1989.
Johnson, formerly president, became chairman and CEO of GTE last April.
Lee, who is 48, had been senior vice president of finance planning before his promotion announced in December. Lee joined the company as chief financial officer in 1983 after being in the steel and entertainment industries.
The 45-year-old Foster's chances for the top spot in the telephone group improved after the resignation last November of president Jim Broadwood. GTE officials would only say Broadwood resigned to 'pursue other interests.' Foster joined the company in 1970.
Johnson called the reorganization a natural step in the evolution of a more streamlined and efficient GTE.
'Chuck Lee and I are confident that this new corporate structure will be even more responsive to customer needs,' the chairman said in a prepared statement. In other changes:
Dean T. Langford becomes president of Danvers, Mass.-based GTE electrical products group that includes U.S. Lighting, Lighting International, Lighting Products and Precision Materials.
Francis A. Gicc becomes president of Waltham, Mass.-based GTE Government Systems Group that includes Command, Control and Communications Systems, Electronic Defense Systems and Tactical Systems.
William E. Starkey becomes president of Tampa, Fla.-based GTE Information Services Group that includes GTE Directories, Telecom, Commercial Services, Education Services, Health Services and Interactive Services.
Terry S. Parker becomes president of Houston-based GTE Mobile Communications group that includes GTE Mobilnet, Cellular Communications Corp., Airfone and Paging.
C.J. Waylan becomes president of McLean, Va.-based GTE Spacenet group that includes GTE's satellite launching and operations businesses.
GTE also announced Allan L. Rayfield, formerly president of products and systems group, will become senior vice president of joint venture operations and will report to Johnson. Analysts said at one time Rayfield had been thought of as a candidate for president of the corporation now held by Lee.
The reorganization and the relocation of the telephone operations to Dallas are part of GTE's strategic moves to streamline its structure.
The mangement had come under criticism for its complex structure and for maintaining two headquarters for its telephone operations in Stamford and in Irving.
In earlier announcements, GTE said it plans to cut 7,000 jobs at its regional telephone operations and another 7,000 jobs from the corporation by 1992. Those cuts are expected to produce savings of between $200 and $300 million.
The company will continue to keep its telephone operations its core business because that is where its expects much of its future growth. The information service group in Tampa is another subsidiary where significant growth is forecast.
