HANDING OFF ROCKWELL’S REINS

Seal BEACH —  Donald Beall is going out on top. Having overcome some initial skepticism to engineer what is now widely viewed as a remarkable transformation of Rockwell International Corp., the cautious and pragmatic chief executive is leaving on his own terms.

In announcing his retirement Wednesday from the top post at the Seal Beach-based company, Beall, 58, said that the task of turning Rockwell from a maker of the B-1 bomber and space shuttle into a leader in electronics “is essentially complete. Now’s the time for the team to bring in fresh thinking and fresh skills.”

An engineer who joined Rockwell nearly three decades ago--and assumed the top spot in 1988--Beall said he wanted to devote more time to other interests, and hinted that he might pursue some entrepreneurial investments.

Beall, who recently became a grandfather for the third time, is also said by friends to desire a break from the demanding schedule of running a huge corporation with worldwide interests.

“You have to be a visionary to have been willing to bet the farm on the future of factory automation and what’s happening with modern technology and telecommunications,” said longtime friend and neighbor Dick Bertea, a retired Parker Hannifin Corp. executive.

“I think he put so much effort into that, he decided there were some other things he wanted to do in life.”

Industry analysts say that Beall will be remembered not for any flashy deal, but for his common sense. “He’s been the low-profile revolutionary,” said Wolfgang Demisch, an analyst at BT Securities in New York. “When everyone else was buying, Don Beall was pruning and focusing.”

His restructuring of Rockwell was initially met with some surprise. Many observers had expected Beall to respond to the aerospace downturn by getting bigger, possibly by acquiring what was then Northrop Corp.

Instead, Beall began selling off the military and aerospace businesses, culminating with last year’s sale of the remaining defense operations to Boeing Co. Meanwhile, he made a series of acquisitions to bolster other, more promising areas of the company. Although Rockwell’s transition began under Beall’s predecessor, Robert Anderson, it was Beall who recognized that electronic components were the wave of the future.

Beall didn’t make flamboyant acquisitions, and that too caused some second-guessing along the way. “It’s hard to get investors to jump up and down because you buy the world’s largest maker of fractionalized modems,” said Demisch. “But the fact is, it’s been a value-creation enterprise without a lot of fluff, but a considerable amount of substance.”

Beall has been well compensated for his efforts. In 1996, he earned $2.9 million in salary and bonuses, but the stock options that have been granted to him could be worth millions of dollars more.

His leadership of Rockwell hasn’t always gone smoothly. He’s been criticized for big, defense-related layoffs and for environmental problems at a nuclear-weapons plant. A low point came in 1994, when two scientists were killed in an explosion at the company’s Santa Susana Field Laboratory. The company later pleaded guilty to three felony counts of mishandling hazardous waste and paid a $6.5-million fine.

Yet in many ways, Beall is a textbook, no-nonsense executive.

Born in a Northern California logging town, Beall earned a degree in metallurgical engineering from San Jose State University, and an MBA from the University of Pittsburgh. He jumped to Rockwell from Ford Motor Co. in 1968. Fingered early on as a shrewd, driven executive, he worked his way up through the management ranks, at one point heading the electronics group.

A Corona del Mar resident and father of two grown sons, Beall, with his wife, Joan, is often seen on the Orange County social circuit. They are major patrons of the arts--they donated $500,000 to the Orange County Museum of Art-- and are active with the St. Joseph’s Ballet.

Though he generally avoids center stage, those who know him say he quietly wields his influence.

“Don has not been one of those totally all-business executives,” said Chuck Martin, managing partner of Enterprise Partners, a Newport Beach venture capital firm.

“He has not really been outspoken about it,” Martin said. “He’s quietly gone about doing good things without making a big public fuss about it.”

An avid golfer, Beall is nonetheless not expected to be spending all his time on the putting green. He sits on the boards of several other companies, including Amoco Corp., Procter & Gamble Co., and Times-Mirror Co., publisher of The Times. He is also a limited partner in Enterprise Partners.

Acquaintances say Beall believes passionately that businesses in Southern California should break from their somewhat insular past and think globally. He was instrumental in starting the Orange County Business Council, and has been active in other business groups.

Beall “did a great job helping people realize there was a world outside Los Angeles,” said J. Curtis Mack II, president of the Los Angeles World Affairs Council. “Don was more than a couple of steps ahead of others in that.”

He’s also involved with university programs, and efforts to improve science and math curricula in primary and secondary schools. He serves on the boards of UC Irvine and the Hoover Institution at Stanford University and is a trustee at the Caltech.

Beall said his departure is something he’s considered for years, and passing the torch to his successor, Don H. Davis, has been carefully planned. He acknowledged feeling somewhat sentimental about leaving the company he has led for so long, but said he was ready to go.

“We’ve got a tremendous business, tremendous leadership, and now’s the time,” he said

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Rockwell Under Beall

Since he became chief executive nine years ago, Donald R. Beall has transformed Rockwell International Corp. from an aerospace giant into a technology company considered a leader in electronics, automation systems and vehicle parts. Here’s how the company looked in 1988 and how it looks now:

From a Past Rooted in Aerospace ....

Aerospace led 1988 revenue at Rockwell, which was renowned for its work on the space shuttle and the B-1 bomber.

Aerospace: 35%

Automotive components: 18%

Semi-conductor systems: 3%

Graphics: 7%

Automation: 10%

Divested electronics: 14%

Avionics: 11%

Rockwell’s electronics divisions account for an increasing portion of the company’s sales, jumping from 38% in 1988 to 70% last year.

Avionics: 14%

Semiconductor systems: 16%

Automation: 40%

Automotive components: 30%

Some highlights of Beall’s tenure as president and chief executive at the Seal Beach-based firm:

* Engineered the $3.1-billion sale of Rockwell’s defense aerospace business to Boeing Co. in December 1996.

* Acquired about 30 businesses for $4 billion, including industrial automation equipment maker Reliance Electric, purchased in 1995 for $1.6 billion.

* Divested businesses that generated $2 billion in resources, slashed the company’s work force from 106,000 in 1984 to 44,000 in 1997 and reduced its reliance on government contracts from 63% in 1984 to 6% last year.

* Built Rockwell’s industrial automation business with the help of Don H. Davis.

* Helped persuade Rockwell executives to buy the Allen-Bradley automation company in 1985, which he expanded and focused on microelectronics.

Note: Numbers do not total 100% due to rounding.

Sources: Bloomberg News, company reports, Times and wire reports.

Researched by JENNIFER OLDHAM/Los Angeles Times.