New Walter exec faces a costly challenge

By KYLE PARKS

© St. Petersburg Times, published June 22, 2000

TAMPA -- Jim Lillie comes to town with a steep challenge: cut $25-million of costs in his first year at Walter Industries Inc.

On Wednesday, the Tampa-based industrial/homebuilding conglomerate named Lillie as its executive vice president for operations. He'll be in charge of purchasing, investor relations, human resources and legal affairs, but one of his top priorities is to find ways to save money.

"This company has done a lot of things in a decentralized way in the past," he said. "There are ways we can cut costs."

Cutting $25-million in costs doesn't necessarily mean cutting staff, he said. It's more about streamlining operations at Walter, which does everything from manufacturing water pipe to mining coal.

As an example, Lillie wants to get better deals for Walter's electricity by negotiating one overarching deal for all its subsidiaries. The company also has a number of separate programs for such things as insurance coverage and employee benefits.

"My job will be to look at how we can share services and make things more efficient," Lillie said. "It would be simple to say that a head count reduction would cut costs, but that's not a creative way to address the problem."

Many Walter employees have been worrying about their jobs since the arrival of new chief executive Bob Burton, hired in April to revive the company's stagnant earnings and struggling stock performance. Burton has now brought in two senior executives who worked for him at Greenwich, Conn.-based World Color Press Inc.: Lillie and new chief financial officer Robert Lewis.

The challenge is to bring about change at Walter, a company that has been slow to modernize its operations even as it has grown to $2-billion in annual revenues.

Lillie is confident he can reach the cost-cutting goals at Walter. The process involves looking at everything with a fresh eye, he said. Can the company use fewer company cars, for instance? And could it save time and money by ordering more products through the Internet?

"Saving money will help us in so many ways," he said. "It can help us make acquisitions. It can help earnings. And it can help us make better use of technology and offer more training for our people."

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