Baxter International finished 1993 with the exit of two top leaders and geared up for the new year by completing key restructuring steps.
James R. Tobin, president and chief operating officer of the Deerfield, Ill.-based hospital supply giant, resigned amid published reports that he wanted Baxter's restructuring to go further and disagreed with Baxter's chairman, Vernon R. Loucks Jr., about how to go about it.
"With the Baxter reorganization now well on its way, I am looking for a new challenge," Mr. Tobin, 49, said. "(It) seemed to be a good time for me to explore other opportunities to lead another company."
The reorganization created an "office of the chief executive" that combined Mr. Loucks, Mr. Tobin and two other executives (Nov. 22, 1993, p. 3). That reduced Mr. Tobin's power at the company and made it appear that he would not succeed Mr. Loucks, said Teri Louden, a partner in the Nashville, Tenn.-based healthcare consulting firm of Louden & Co.
"I wouldn't stay either," she said.
Also, Wilbur H. Gantz resigned from Baxter's board of directors. Mr. Gantz was president of Baxter from 1987 to 1992, when he left to form a biotech nology company, Pathogenesis Corp. "The increasing time demands of a growing and pros pering new busi ness require that I reduce my outside activities," Mr. Gantz said.
But the year didn't end without some news at least one analyst viewed as positive for Baxter. On Dec. 22, 1993, the Department of Veterans Affairs lifted its one-year suspension of Baxter from new government contracts after an appeal by the company. The VA also dropped its proposed debarment of Mr. Loucks and Mr. Tobin.
The sanctions were imposed in August because of allegations that Baxter representatives had misled VA buyers to increase sales and because of Baxter's guilty plea to breaking U.S. law against aiding the Arab economic boycott of Israel (Aug. 23, 1993, p. 6).
Still under consideration is the debarment of Baxter's former senior vice president and general counsel, G. Marshall Abbey, who resigned after the company's guilty plea in March.
Under the settlement with the VA, Baxter will pay $2.85 million in financial consideration over three years to cover the costs of the proceedings. It also will establish a service center for federal contracts and provide more training to its sales staff. The settlement isn't an admission of guilt or liability, Baxter said.
Meanwhile, the company continued its restructuring last week by announcing that Baxter Diagnostics, one of its units, had signed a letter of intent to sell its hematology business center to Japan's TOA Medical Electronics. The company wouldn't disclose terms of the deal, which was expected to be completed by Jan. 1.
As part of the agreement, Baxter keeps exclusive rights to sell Sysmex products and continue servicing the devices. Analysts said Baxter was too small to compete in the diagnostic business. They estimated that Baxter Diagnostics generated $500 million in sales. Baxter International's overall revenues totaled nearly $8.5 billion.-Lisa Scott with Bruce Japsen