Techtronic Gambles on Galli

It looks like the "brand name" CEO is taking a job at the power-tool manufacturer, though a mixed record may hurt his reputation there

Joseph Galli Jr., the former chief executive of Newell Rubbermaid (NWL), is about to take a senior post at the Hong Kong–based tool and housewares company Techtronic Industries (TTNDY.PK), according to industry sources. Techtronic manufactures Craftsman power tools for Sears (SHLD) and Rigid brand tools for Home Depot (HD), as well as marketing its own products under names including Dirt Devil, Ryobi, and Milwaukee.

Galli did not return phone messages left at his home northwest of Baltimore. Techtronic spokesmen in Hong Kong and in the U.S. unit, based in Anderson, S.C., did not return calls seeking comment. A Techtronic executive in Hong Kong said Galli has been seen for the last few weeks in the company's world headquarters, getting oriented on the company's businesses and interviewing senior staff; Galli has told a few people that he expects to join the company.


  Galli, almost considered a brand name CEO in the U.S., has a very mixed record. He left Rubbermaid last October under the cloud of ten quarters of sliding sales on his watch. Before going to the housewares giant in 2001, Galli had worked at Black & Decker (BDK) and (AMZN), earning a reputation for having the rare combination of sharp cost-cutting and marketing skills.

He also achieved notoriety for skittishness. He spent just 13 months as COO of, and less than one year as CEO of VerticalNet after that. He also famously accepted a job to head the Frito-Lay division of PepsiCo (PEP) and then changed his mind a day later to take the job at

Galli spent 19 years at Black & Decker before leaving to fulfill his ambition to become a CEO. Still, at Rubbermaid, he had difficulty making the combination of Newell and Rubbermaid work. His decision to pour millions into advertising with such pricey venues as Monday Night Football while sales fell brought a lot of second guessing from staff—and ultimately the board.


  A Techtronic insider says that Galli's actual position at the company is not settled, partly because he has one year left on a two-year noncompete clause from his Newell Rubbermaid departure. That may preclude him from being CEO, since Rubbermaid and Techtronic have some overlapping products in the tool category.

One solution being discussed in Techtronic's ranks is Galli's possible acceptance of the less prestigious role of running the company's floor-care division for a year, before taking over as CEO. Techtronic founder, chairman, and CEO Horst Julius Pudwill, 61, has been reportedly looking for a CEO, though insiders say he would likely remain executive chairman.

Techtronic has been enjoying strong growth from its private label manufacturing, as well as its own brands (see, 7/31/06, "Emerging Giants," and "Techtronic: 'We Have the Vision to Be No. 1'"). And it is one of a handful of parties reportedly in a third round of bidding for Hoover. The money-losing maker of vacuum cleaners had been a subsidiary of Maytag. It changed hands last spring when Whirlpool (WHR) took over its smaller rival in a $2.6 billion deal. Whirlpool put the Canton (Ohio)-based company up for sale officially in late May.


  Techtronic is interested in achieving greater scale in the vacuum segment. One way to do that would be to combine its Dirt Devil business with Hoover and consolidate manufacturing in China, where labor is much cheaper than in the U.S. or Mexico and where Hoover also has factory operations. If Techtronic wins the bidding, Galli could spend a year restructuring it inside Techtronic as an employee or consultant, says one source, before taking on the role of CEO.

Galli is known to be hypercompetitive, and he still bristles at not being given a chance to be CEO of Black & Decker, say industry executives who have worked with him. Blocked by long-time CEO Nolan Archibald, Galli would soon be in a position to go head-to-head with his former employer.

Techtronic in 2005 reported $2.9 billion in revenues, and $131 million in net earnings, with 75% of its sales coming from U.S. distribution. That's a bit less than half the size of Newell Rubbermaid and Black & Decker.

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