Thomas W. Swidarski knows he has his work cut out for him.
When he became Diebold Inc.'s chief executive in December, the North Canton, Ohio, automated teller machine maker was concluding its fourth consecutive quarter of falling profits; shortly afterward he announced plans to review the company's operations.
Among the many things under review: whether Diebold should stay in the business of making electronic voting systems, and the degree to which it needs to improve its ATM production, particularly in Europe.
"My job is to figure out, 'Do I have the right people in place? Are we in the right spaces? Do we have the right product portfolio to go after?' " Mr. Swidarski said in an interview last week. "Even in the self-service side, while it's the hallmark of the company, I need to make that a better, more efficient, more successful business."
For example, the company's factory in France has not performed up to the standards of its factories in the United States and Shanghai, Mr. Swidarski said.
"If we're going to compete in Europe, I need a facility as good as I have in Asia," he said. "I can't afford to be five days late on a unit. My customer satisfaction score falls through the floor."
The idea of moving some facilities is also on the table, Mr. Swidarski said.
"Eastern Europe is exploding" in terms of ATM growth, but "I'm located in Western Europe," he said. "I think we probably have the right number of factories, but I've got to get the factories in the right locations to be able to compete."
Madhavi Mantha, a senior analyst at the Boston market research firm Celent Communications LLC, agreed that there is strong demand for machines in Eastern Europe.
She also said Diebold's ATM growth potential "happens to be their weakest area, so it doesn't surprise me that's what they're trying to turn around."
Mr. Swidarski has been with Diebold for a decade, but his rise in the past six months has been dramatic. In September he was promoted to senior vice president of the financial self-service group, which was revamped to include ATM product and software development, manufacturing, procurement, and marketing. He had previously been the senior vice president for strategic development and global marketing.
In October he was named the president and chief operating officer, and in December he succeeded Walden W. O'Dell, who resigned after six years as the CEO.
Diebold's election systems unit, a business in which Mr. O'Dell had taken an intense personal interest, had been the source of some bad press. Mr. O'Dell was widely chastised for writing in a September 2003 fund-raising letter that he was "committed to helping Ohio deliver its electoral votes" for President Bush in the 2004 election.
Despite the public relations headaches the unit has generated in recent years, it was one of Diebold's fastest-growing ones last year. Election systems revenue soared 79.2%, to $161.3 million, though the company reported that a last-minute accounting issue, discovered hours before the full-year numbers were reported last month, could require an adjustment of $2 million to $10 million to the fourth-quarter figures.
Diebold said it continues to investigate the unit's accounting and would include any adjustments in future earnings reports.
Fourth-quarter net income at Diebold fell 76.8% from a year earlier, to $14.6 million, but revenue from continuing operations rose 14.9%, to $817.6 million.
Full-year net income dropped 45%, to $100.9 million, but revenue rose about 10%, to $2.59 billion. The ATM unit's revenue rose 4.3%, to $1.77 billion.
During the fourth-quarter earnings call, Mr. Swidarski said he would sell Diebold's plant in Sumter, S.C., to a supplier. He also announced plans to eliminate more than $100 million of costs over three years.
Mr. Swidarski, the former president of the election systems unit, said it generates a "very, very small" percentage of Diebold's revenue, and he suggested - as the company has said in the past - that the unit's future is open for debate.
"It's relatively new to us, and it's outside the financial space," he said. "When I think of what's core to my company, I think financial. That's the bread and butter."
