The King Is Dead. Long Live The Acting King

In the Pittsburgh headquarters of Westinghouse Electric Corp., they call him the Clark bar. The nickname fits. Acting Chief Executive Gary M. Clark is chunky, low-key, genial, and--like the city's own candy bar--a Pittsburgh fixture. As he strolls around the 23rd floor, the 36-year Westinghouse vet has a smile and a first-name greeting for everyone he sees. His style is in sharp contrast to that of Paul E. Lego, the Westinghouse CEO ousted in January after a stormy two and a half years at the helm. But nice guy that he is, Clark has been dismissed as no more than a fill-in--"a Gerald Ford clone," as a former Westinghouse executive puts it.

Now, it looks as if Westinghouse watchers may have underestimated Clark. The company's board is having trouble snaring a strong outsider, and Clark is making a play to win Westinghouse's top job for good. Under Clark, Westinghouse's stock has climbed from its all-time low of 9 3/8 in November to 15 in late April. A major reason for the improvement is a timely real estate deal Clark pulled off in early April: He sold $1 billion in Westinghouse Credit Corp. assets to a partnership formed with Lehman Brothers. "Back in January, I don't think Gary would have given a dime for his chances," says a former associate. "That's changing."

Not that the board, headed by former Amoco Corp. Chairman Richard M. Morrow, isn't looking around for outside candidates. But his headhunter, Gerard R. Roche, the hotshot chairman of Heidrick & Struggles Inc., has failed to find a good match, sources close to the board say. The problem, they say, is a lack of consensus about what the board wants in its new CEO. The status quo, which favors Clark, would continue the slow sale of assets outlined by Lego last November, shrinking Westinghouse from a $12 billion to an $8 billion company. This would offset the $5 billion in charges against earnings the company has taken over the past two years for bad loans and real estate losses.

But it's not clear that the board can withstand pressure from some aggressive Westinghouse shareholders to choose a new leader who will slash costs, spin off divisions, and drive up the stock far higher than Clark has. Only an outsider, says Florida turnaround consultant Eugene Finken, can breathe life into the company, breaking up its clubby culture. "It's like GM," says Finken. "They have a bureaucratic mentality and act like a government, not a company."

BIG QUESTIONS. The board toyed at first with hiring Vincent A. Sarni, who is retiring this summer from the top job at PPG Industries Inc., just two blocks from Westinghouse. But the 65-year-old Sarni, who hobnobs regularly with Westinghouse execs, hardly qualified as an outsider, say sources close to the board. Sarni declines to comment.

Talks with Paul G. Stern, the tough, cost-slashing CEO of Northern Telecom Ltd., have also gone nowhere. Stern, says one source close to the board, was discouraged by the prospect that Westinghouse might have to shrink for three or four years before it could start growing again. And his take-charge attitude came across to the board as abrasive. Stern also declines to comment.

Murrow promised at the company's Apr. 28 annual meeting to come up with a replacement "within the next several weeks." But Clark has already had plenty of time to make his mark. He has put his own team into place. He also fired two of Lego's top cronies, Vice-Presidents Eileen P. Massaro and Anthony A. Massaro Jr. His real estate deal with Lehman also boosted his standing. The deal isn't closed, but it promises to net some $750 million--in time to meet debt payments due this summer.

Plenty more such financial tinkering still lies ahead for Westinghouse. The company also faces crucial strategic decisions, such as whether to stay in its $2.9 billion defense-electronics business or invest that money elsewhere. These are big questions. But don't expect answers until Westinghouse has a CEO without "acting" before his or her title.

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