In his first presentation to Wall Street and investors, G. Kennedy Thompson, the newly minted chief executive officer of First Union Corp., worked hard to prove that his management style would be radically different from that of his famous predecessor.
Mr. Thompson is being watched as closely as James Dimon, the new CEO of Bank One Corp., who is also expected to announce big changes at that company in the coming weeks.
However, Mr. Thompson is a 24-year insider at First Union, and his aggressive move Monday to create distance between himself and his long-time boss, Edward E. Crutchfield Jr., surprised many.
"This is the day Ken Thompson made it clear that he is not a clone," said Michael Mayo, an analyst at Credit Suisse First Boston. "He is setting a tone from the top of the company. But this is no small task."
Mr. Thompson said he would no longer pursue the aggressive acquisition strategy that was the hallmark Mr. Crutchfield's career at First Union. Instead, he set out a far more conservative strategy that relies on building the company from the inside.
"It will be a new First Union after the restructuring," Mr. Thompson told analysts. "We will have a much clearer focus."
Some analysts expressed skepticism that Mr. Thompson would be able to effect change at the Charlotte, N.C., company. As an insider, Mr. Thompson played a role in shaping the decisions that lead to First Union's current problems. "He was there. He was part of the cabal," said George Bicher, an analyst at Deutsche Banc Alex. Brown.
And some observers seemed downright disgusted by the magnitude of the planned changes.
"Shareholders were deluded to death in the late 1980s and 1990s, and now they're saying 'My bad, we're changing the company'," said Thomas Brown, a former banking analyst and now president of Second Curve Capital, a New York hedge fund that invests in bank shares. "This announcement is a disgrace. The board has been presiding over one of the banking industry's biggest follies."
In an interview, Mr. Thompson cast the changes as more evolutionary than revolutionary. "It's definitely not a repudiation of what [Mr. Crutchfield has] done," he said. "It's getting our house in order with a lot more focus than we've had recently."
Still, Mr. Thompson recited a litany of differences between the "new" First Union and the "old" one.
While Mr. Crutchfield's company achieved rapid growth through acquisition, the new First Union will achieve growth "organically," he said. While the old company focused on product sales, the new one will be more "customer-focused," with an emphasis on market segmentation and retention. The old company wanted to make and sell all of its own products, while the new one will trumpet distribution and let others make the products to sell, he said.
In perhaps his most damning statement of Mr. Crutchfield's regime, Mr. Thompson promised that while the old First Union relied on nonrecurring gains from securities sales to achieve earnings, the new company would discourage that. "There will be less proprietary risk taking and more conservative use of the balance sheet," Mr. Thompson said.
"We will be much better focused on our core strengths," he told analysts. "I am more optimistic than I have been since 1997."
Analysts said Mr. Thompson still has to prove his mettle. "This was opening night," Mr. Mayo said. "It remains to be seen how long the show will run."
