Philips' choice of Moakley as CEO points to U.S. medical improvement

July 1, 1992

Dutch conglomerate Philips Electronics chose Michael P. Moakley,president of Philips Medical Systems North America, to replaceretired Hans van Bree as worldwide president and CEO of PhilipsMedical Systems International last month. Not only will Moakleybe

Dutch conglomerate Philips Electronics chose Michael P. Moakley,president of Philips Medical Systems North America, to replaceretired Hans van Bree as worldwide president and CEO of PhilipsMedical Systems International last month. Not only will Moakleybe the first American CEO of a Philips product division, but thiswill be the first time that a Philips division will be run fromforeign soil, Moakley told SCAN.

Also effective last month, Moakley named William Joyce as generalmanager of Philips Ultrasound in Santa Ana, CA. Moakley had beenin charge of the ultrasound business since the departure of generalmanager Thomas E. Bird in February (SCAN 2/26/92). Joyce, a 25-yearPhilips veteran, most recently served as president of CT ScannerManufacturing (CTSM), a U.S.-based Philips/Hitachi joint ventureset up two years ago (SCAN 6/20/90).

Moakley's appointment is a recognition of the progress made atPMSNA since the 25-year GE Medical Systems executive was hiredaway by Philips three and a half years ago (SCAN 1/18/89). Hewill continue as president of PMSNA at least until the end ofthe year, while evaluating the situation, Moakley said.

As he did after taking direct control of ultrasound this year,Moakley cleaned house at PMSNA, reducing administrative overheadcosts, while boosting the number of sales and service personnel.

"They (Philips Electronics) saw a major turnaround at PhilipsMedical in North America. We have had a rather complete revamping.Sales and the bottom line are up substantially. We made a majorinvestment in the service business and sales training and thishas paid off fairly well," Moakley said.

Moakley built a team of veteran imaging executives at PMSNA, includingsome from GE, Siemens and other vendors.

"My appointment to head up the whole of Philips Medical isthe greatest compliment to the staff I put together here (at PMSNA),"he said. "They like working with each other. They like theauthority and empowerment they have been given."

Overall, PMSI makes a positive contribution to its parent's profitsand cash flow, Moakley said. As a consumer electronics price warheats up in Europe, the medical systems division will become anincreasingly important business for Philips Electronics, he said.

Much of Moakley's time over the past eight months has been spentin Europe, he noted. There continue to be strong opportunitiesfor building market share in Western Europe and developing businessin the East, he said.

"Germany still remains half the European (medical imaging)market. We have major opportunities for growth within France andwill be particularly attentive to that market," Moakley said.

PMSI made hard decisions under van Bree, turning away from lessprofitable areas, such as nuclear medicine, in order to improveprofitability overall.

"The need for portfolio choices will continue," Moakleysaid. "This industry is going to get more competitive andis going to move faster. We will have to make the right portfoliochoices out of all the modalities and do this faster and quicker."

Medical imaging is faced with industry overcapacity and growingtechnological parity. These factors, in combination with governmenthealth-care cost-containment pressures, have made the businessmuch more competitive, he said.

BRIEFLY NOTED:

  • Heart Technology of Bellevue, WA,received a financial thrashing last week as it recalled its Rotablatoratherectomy device following several cases of product failure.Heart Technology had a successful initial public offering onlyfive months ago (SCAN 2/11/92).

HT's stock price dropped 23% on June 19 following disclosure ofthe defect and fell another 19% on June 22, when the recall wasannounced. The NASDAQ-listed stock rebounded somewhat later inthe week, closing at $10.12 a share on Thursday. The stock pricehad previously risen as high as $31. HT's IPO sold at $18 a share.