Western Digital Corp. (WDC:US), the largest maker of hard-disk drives, said President Steve Milligan will take the role of chief executive officer after the retirement of John Coyne on Jan. 2.
Milligan, 49, will retain the job of president and join Western Digital’s board after Coyne steps down, the Irvine, California-based company said today in a statement. Coyne, 63, spent almost 30 years with the company, the last five as CEO.
Milligan rejoined Western Digital earlier this year as part of the company’s acquisition of Hitachi Global Storage Technologies for more than $4 billion. He had served as CEO of the division since December 2009, and he was Western Digital’s chief financial officer before leaving for Hitachi in 2007.
“Anyone who didn’t see this coming was living under a rock,” said Richard Kugele, an analyst at Needham & Co., in an interview. He credited Milligan for improving Hitachi’s performance before the acquisition, and said he is “totally up to the task of running Western Digital, and then some.”
The Hitachi deal helped Western Digital retake the market- share lead in the disk-drive industry this year, according to research firm IHS Inc. (IHS:US) Western Digital accounted for 45 percent of the market last quarter, followed by Seagate Technology Plc (STX:US) at 42 percent.
“We are fortunate to have another accomplished and experienced leader in Steve Milligan, ready to lead the company at this exciting time,” Chairman Tom Pardun said in the statement.
Western Digital declined 1.6 percent to $41.18 at the close in New York. The stock has gained 33 percent this year.
Milligan’s challenge will be navigating Western Digital through a predicted slump in demand for drives, Kugele said. Both Western Digital and Seagate had predicted flat demand for drives in the current quarter, when sales are usually brisk as technology companies gear up for the holiday quarter.
Now, Kugele expects industrywide sales to decline 8 percent in the quarter, largely due to reduced spending by technology companies in Europe and China.
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