Harman to Step Down as Chairman
An updated version, with an interview with Sidney Harman, by staff writer Thomas Heath
Sidney Harman said he will retire in July as chairman of Harman International Industries, ending a five-decade tenure at the head of the high-end sound equipment maker he founded here.
"I have worked hard to ensure the constructive continuation of this company in both spirit and in its direction," Harman said in an interview yesterday. "I hired a chief executive officer, watched him thoroughly for a year, and concluded he is up to it."
Chief executive Dinesh C. Paliwal will take over as chairman when Harman International's fiscal year begins July 1.
Harman, who is 89, will keep a seat on his company's board of directors until Dec. 3, after which he will retain the title of founder and chairman emeritus.
"I have a big challenge to build on a legacy of innovation and a legacy of integrity and community involvement," Paliwal said.
Harman International has undergone big changes in the past few months. Paliwal moved its headquarters from Washington to Stamford, Conn. A few weeks ago, he announced a new finance chief and auto division head. Both hires are designed to expand the company's presence into emerging markets such as Brazil, Russia, India and China.
Sidney Harman will maintain an office and small staff in Washington.
"I will continue to be available to the company, first as its chairman through the end of June, and then through the board through the beginning of December," he said. "After that, as needed, I would expect to applaud as this company progresses."
Harman said he is the largest single shareholder in the company, voting 3.5 million shares. To mark his departure, he is setting up a trust, funded with a $2.5 million gift, that will pay for three to five scholarships a year for the children and grandchildren of Harman employees.
Harman was deputy commerce secretary under President Jimmy Carter and is the author of two workplace books. He plans to write more books and will become the first Judge Widney Professor of Business at the University of Southern California, named for USC founder Judge Robert Maclay Widney.
The position will allow him to teach at USC's undergraduate college of arts and sciences, as well as in the schools of law, medicine, business, public policy "and, of course, gerontology," he said. Harman's 90th birthday is in August.
Harman and his wife, Rep. Jane Harman (D-Calif.) live in Cleveland Park in Northwest Washington.
The Harmans are active in Washington's social, political and arts circles. The Harman Family Foundation gives to such local institutions as the Washington Ballet and the Phillips Collection. His $20 million pledge helped build the new Sidney Harman Center for the Arts in downtown Washington.
Harman International is a multibillion-dollar manufacturer of high-end sound equipment for cars and consumers. The company makes Harman Kardon, Infinity and JBL audio equipment. The company has more than 11,000 employees and had more than $3.5 billion in sales in the year ended June 30.
The company has had a bumpy time the past few years. Douglas A. Pertz was hired as a new chief executive in 2006 and then left a few months later. Private-equity giant Kohlberg Kravis Roberts offered to buy Harman International for $8 billion last year, only to withdraw the offer a few months later, leaving Harman at the helm of the company he founded in 1953.
"This is the right time to put a period to that half-century and a good time to begin my next half-century," he said as he boarded a jet in Los Angeles.
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