New Head at RCA

In a shake-up that rattled around in Wall Street's rumor mills for days before it became public, one of the nation's industrial giants last week rejiggered its top management. Out as president of the kaleidoscopic Radio Corp. of America went John Lawrence Burns, 53, who took on the $200,000-a-year job under a ten-year contract less than five years ago. A top-drawer management consultant, Burns came to RCA from Booz, Allen & Hamilton, where he had been rated an expert on the problems of running big corporations and had included RCA among his clients.

Originally, speculation in the trade was that Burns was to be ousted because in recent weeks he had sold, at more than $50 a share, 17,443 shares of RCA stock which he had bought in an option agreement for $33.75. The sale angered some investors and brokers, who feared that it would be interpreted publicly as an expression of lack of confidence in the company by one of its chief officers. As it turned out. Burns was merely selling the stock because he knew that he was leaving.

The most likely reason for Burns's exit appears to have been his close identification with RCA's belated entry into the computer business. Between huge development costs and slow sales, RCA's computer program has been running at a loss big enough to offset the profit increases other RCA divisions have shown this year --a fact that tarnished Burns's otherwise excellent record (TIME, Sept. 7, 1959).

To replace Burns, RCA's proud, patriarchal Chairman David Sarnoff, 70, turned inside to a 31-year RCA veteran: Dr. Elmer W. Engstrom, 60, the company's precise, professorial senior executive vice president who has specialized in research, defense and space business. The 5-ft. 7-in. Engstrom--he is called "Shorty" by his intimates, including even the 5-ft. 8-in. Sarnoff--got his University of Minnesota degree (class of '23) in electrical engineering, has long been associated with developing RCA's color television, a pet Sarnoff project. A top contender for the presidency back in 1957 when Burns was brought in from Booz, Allen & Hamilton, Engstrom is a skilled corporate strategist, had already been given all of Burns's responsibilities except supervision of the National Broadcasting Co. weeks before the formal changeover was announced.

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