Nabisco head named as new chief of IBM: Gerstner promises a 'no-holds-barred' approach

THE INTENSIVE two-month search for a chief executive for the world's largest computer company came to an end yesterday when IBM announced that it had named Louis Gerstner, the current chairman and chief executive of RJR Nabisco, to the post.

James Burke, an IBM director, said yesterday that Mr Gerstner, 51, was the board's early favourite for the job, dismissing reports in the media that it originally looked within the computer industry for a new chief executive. RJR Nabisco is a foods-to-cigarettes consumer conglomerate, and Mr Gerstner's only experience with computer technology came as president of American Express in the mid-1980s.

Mr Gerstner replaces John Akers, IBM's chairman and chief executive since 1985, who had struggled unsuccessfully to cut costs since profits from the firm's mainframe computer business collapsed three years ago. IBM has shed 100,000 jobs and lost dollars 7.8bn in the last two years. Last year its revenues fell for the first time ever, although costs continued to rise.

Under Mr Akers, IBM has devolved into 13 operating units, and there has been considerable speculation that Mr Gerstner's main task will be to sell some of those units and spin others off as separate companies.

At yesterday's news conference Mr Gerstner, who will take office next Friday, said that while he would take a no-holds-barred approach to the future of the company, he was not sure that splitting IBM into pieces was the right move.

Mr Gerstner, who also assumes the post of IBM chairman next month, said he would bring the customer's perspective to IBM, but also promised to keep the interests of IBM's shareholders in mind.

After slipping recently over concern about Mr Gerstner's experience, IBM shares rose more than dollars 1 in early trading in New York yesterday to dollars 53 3/8 .