- Signs for push-out forces
- After almost eleven years on the job
- Laud, praise and thanks for Dewey
- Search for a successor
(management-change.com) — Indianapolis, Indiana, December 21, 2016 — Larry Dewey, chief executive of Allison, leaves. His departure is made public at an early stage. As announced by Allison Transmission Holdings Inc. in a news release and in a regulatory filing published on Wednesday, December 21, 2016, Lawrence E. (Larry) Dewey, Chief Executive Officer, leaves the manufacturer of fully automatic transmissions for commercial vehicles after almost eleven years on the job, effective May 31, 2018.
It is the end of an era.
Allison will undertake a search for a successor.
It is a long goodbye. The announcement of Dewey’s move comes 17 months prior to his planned departure.
In general, a top executive who announces the departure very early may be considered a lame duck.
Lengthy lead times give boards extra time to find replacements, and they also create uncertainty. Would-be successors may jockey for attention and workers may wonder who is actually in charge.
Generally speaking, lame-duck leaders can take a forceful role in selecting a successor and are not expected to launch major strategy shifts.
No reason given
In the announcement, Allison did not explicitly explain the reason for Dewey’s move, opening the door for speculation.
Allison said: “The board of directors for Allison Transmission Holdings Inc. … today announced that it has entered into a new employment agreement with Chairman and CEO Lawrence E. Dewey. The agreement runs through May 31, 2018 at which time Dewey, currently 60 years old, intends to retire.”
Precise information about the future plans of Dewey was not immediately available.
Share price rise since February 2016
The change follows a rise in the share price of Allison Transmission Holdings Inc. since February 2016.
ValueAct holds 11.56 percent stake
ValueAct Holdings, L.P. reported an 11.56 percent stake in Allison Transmission Holdings Inc. as of September 30, 2016. ValueAct is a hedge fund.
On the job as CEO since 2007
Dewey will be retiring after a career spanning 44 years, which includes serving as CEO since August 2007.
As the longest-serving head of Allison in its 100 year-plus history, he oversaw the company’s transition from being a division of General Motors Co., to becoming an independent company with private equity ownership, to offering equity on the New York Stock Exchange in 2012 and, for the last four years, as an independent public company.
Dewey joined Allison in February 1989.
Dewey currently serves as the Chairman and Chief Executive Officer of Allison and has served in that capacity since January 2016.
Prior to that, Dewey served as Chairman, President and Chief Executive Officer since the sale of Allison in August 2007.
Prior to the sale, Dewey served in various capacities at Allison, including as President of Allison, a role he assumed in 2000; worldwide Director of Marketing, Sales and Service, Managing Director of Allison Transmission Europe, B.V., based in The Netherlands; Central Region (U.S.) Sales Manager; Marketing Manager; Manager of Aftermarket Products; and Production Manager.
From 2003 until 2007, concurrent with his role as President of Allison, he took on the responsibilities of Group Director of Marketing, Sales, Brand Management and Customer Support for General Motors Powertrain group.
Before joining Allison, Dewey held several positions of increasing responsibility in General Motors’ Diesel Equipment Division and Rochester Products Division.
He began his career in 1974 as a General Motors co-op student at General Motors Institute (now Kettering University).
As a general rule, when a top leader announces to step aside with no successor in place, it is a sign that the move was unexpected and too early.
Signs for push-out forces
It is not completely certain what forces eventually triggered Larry Dewey’s move.
The Push-out Score™ determined by management-change.com suggests that push-out forces may have contributed to the management change.
Read the full story in the management-change.com report 48.2016 ($).