And while he’ll continue to serve as executive chairman of the board through 2010, Ferguson is looking forward to relinquishing the day-to-day responsibilities that come with leading a Fortune 500 company.
“I have a set of life commitments that I want to get done before I finish up. And as much as I’ve enjoyed and been honored to have this position, I need to make room for some of those other things,” Ferguson said. “I am completely at peace.”
Ferguson was tapped to serve as Eastman’s chairman and CEO in 2002, replacing Earnie Deavenport Jr. At the time, Eastman was on track to split into two separate companies — Eastman and Voridian — in a plan advocated by Deavenport, who had headed the company since it was spun off from Kodak in 1994.
But Ferguson ditched those plans and instead announced in 2003 that he would restructure the company, and divest and consolidate under- performing assets and businesses.
Eastman began to shrink in size as various facilities and product lines were sold.
The strategy worked, as the company went from bleeding red ink to posting profits. And sales of the company grew — from $5.3 billion in 2002 to $6.8 billion in 2007.
Early last year, Ferguson announced that Eastman expected to double its earnings per share by 2012. He pointed out that Eastman’s earnings per share in 2005, 2006 and 2007 combined, excluding restructuring costs, represented the best three-year period of earnings in the company’s history.
But the ride on the mountaintop didn’t last long, and by last fall, a global recession had gripped the nation. Eastman was facing declining sales and profit margins, and looking for ways to curb costs.
Ferguson, who had been thinking of stepping down as CEO of the company for several months, faced making a final decision in December.
“That was anguish,” Ferguson said. “The world changed so much between August and December. Should I be leaving now or not? But if I had any doubts about this leadership group, if I had any doubts about the projectory of the company, I wouldn’t be going.”
He made the official announcement in early December, tapping James P. Rogers, 57, to serve as president and CEO following the company’s annual stockholder meeting on May 7. Rogers had been serving as president of Eastman and head of its Chemicals and Fibers Business Group.
Less than two weeks after Ferguson announced his retirement, Eastman issued a news release saying it would slash more than $100 million in expenses from its bottom line in 2009, including $80 million in labor-related costs. The company planned to eliminate the 2009 wage and salary increases, cut overtime wherever possible, reduce the use of contractors and part-time labor, decrease management staff, and implement a permanent change in its U.S. vacation policy to cut costs.
The cuts apparently weren’t deep enough. In early March, Eastman announced it would slash another $100 million in expenses this year, including cutting employee pay by 5 percent and laying off up to 300 workers.
The work force reduction took place in mid-April, affecting 300 employees worldwide, including 200 in Kingsport.
Since Ferguson took over as CEO, Eastman’s work force has shrunk from nearly 16,000 employees in 2002 to about 10,200 people today. Some 6,800 work in Kingsport.
As a smaller company with a fundamentally sound business portfolio, Ferguson says Eastman is now well positioned to withstand the economic downturn and take full advantage of recovery when it comes.
At a breakfast for community leaders in March, Ferguson sat down with the Times-News to talk about his tenure at Eastman.
“At some point in your career, you wake up and it’s not about how much money you need. I’ve got enough money to take care of me and my children for as long as I can think. So what is it that you get out of bed to come and do?” Ferguson said.
He said he had specific goals when he took the top job. He wanted to restore the company’s financial health and build a stronger commercial culture, and he wanted to create a vision that Eastman could invest in for the future, making it a good employer, a good community citizen, and a good performer for stockholders for the long term.
“Once I saw that those were in motion, I decided that it was time for me to move away,” Ferguson said.
He said the job “pushes everything else out of your life.”
“And that’s the way it should be. The stockholders deserve your full attention. The employees who are looking up and hoping you’re going to be there to send their kids to college and take care of their retirement, they deserve that attention.
“If you do this job the way it’s supposed to be done, it leaves no room for anything else. And that’s OK for a period of time. But then you have to make room for other things in your life, if you’re going to complete your own definition of a life well lived. And the definition of a life well lived goes beyond how long I was CEO at Eastman. So it was time,” he said.
As for his performance, Ferguson said he could have made some decisions more quickly, but, he said, “I don’t walk away with any large regrets.”
He said that if he had not divested those under-performing businesses after he took the helm, Eastman would be facing dire consequences. Besieged by the economic downturn, some companies are now on the verge of bankruptcy because they made bad acquisitions just for the sake of growth, he said.
“If I had not divested those businesses, we would be facing that situation right now — big time,” he said.
Asked about Eastman’s plan to double earnings per share by 2012, Ferguson said “the timing is obviously interrupted.”
He said the global recession will delay that goal, but that Eastman will eventually reach it.
“The story has not been impaired, it’s more about timing,” he said.
He said he considers it an “incredible honor” to have served as Eastman’s CEO.
“There are plenty of smart people out there who could do this job or better. But somehow, my lucky star just kind of moved through at the right place and I got this job. It’s been an honor to serve. I wouldn’t give it back,” he said.
Ferguson, who turns 55 this June, owns a house in Jonesborough and one on Norris Lake. He said he and his wife, Teri, have no plans to sell either home. They may spend time visiting their son in Vancouver and their other son and grandchildren in Charlotte, N.C. Their second grandchild was born March 3 in Charlotte.
But Ferguson said he and Teri have no plans to move.
“We have lived all over the world. This is a great place to live, and I can travel to any of the places I want to visit,” he said.
Ferguson said his wife “is the happiest person about this decision.”
“And it’s not because of the honey-do list,” Ferguson said. “You pay a personal price in doing this, physically and otherwise. She’s happy that price is coming to an end.”