DirecTV in the News

Hughes Makes Roxanne Austin DirecTV President

EL SEGUNDO, Calif., - June 26, 2001 - (Reuters) - In a second major shake-up, Hughes Electronics Corp. Tuesday named a new president for its DirecTV satellite television service to re-energize the unit amid slower growth and merger talks that have strained the focus of management.

El Segundo, California-based Hughes -- which along with parent General Motors Corp. has been negotiating for the sale of DirecTV since last fall -- named Chief Financial Officer Roxanne Austin as president and chief operating officer of DirecTV.

She replaces Odie Donald, who had been president since April 2000 and is leaving to pursue other interests but remains a consultant into 2002.

Hughes said DirecTV Chairman and Chief Executive Eddy Hartenstein remains in his post and retains his title as corporate senior vice president of Hughes.

In May, Hughes Chairman and CEO Michael Smith resigned as efforts to sell DirecTV to Rupert Murdoch's News Corp. Ltd. bogged down over price and control of a merged company.

The latest management shake-up follows a June 11 warning by Hughes that second-quarter subscriber growth at DirecTV would be about 175,000, instead of the 275,000 to 350,000 predicted earlier.

At that time, Hughes cited a slowing economy for the weak growth figures and Smith's replacement, CEO Jack Shaw, said the company had not devoted enough time to running the business while it also negotiated for the sale of DirecTV.

"My job No. 1 is to focus on DirecTV and the business of DirecTV,'' Austin told Reuters in a phone interview.

Austin, 40, joined Hughes in 1993 and served as treasurer, chief accounting officer and controller before rising to CFO in 1997. She is succeeded as Hughes CFO by Michael Gaines, 43.

Hughes shares closed Monday at $20.04, down 1 cent on the New York Stock Exchange (news - web sites).

The stock is down about 12 percent since the June 11 warning of weaker subscriber growth and down about 47 percent from a 52-week peak of $38 reached last October on merger speculation.

Hartenstein said in a phone interview with Reuters that DirecTV is re-focusing its sales and marketing efforts for the DirecTV service away from broad national coverage of the United States to a more targeted marketing in major urban areas where it offers local television stations.

He also said the company would look to broaden its presence in retail stores, even as those stores also face lower sales in the currently weak U.S. economy.

"There's no question this economy is down, but let's not make excuses here. I think collectively we took our eye off the ball, and got more more focused on the deal, the transforming transaction,'' he said.

News Corp. wants to merge DirecTV and its nearly 10 million U.S. subscribers with News Corp. satellite TV operations around the world and form a multibillion dollar, global satellite TV company that would include services such as the United Kingdom's BSkyB and Asia's Sky Television.

In recent weeks, as talks between Hughes and News Corp. have dragged on, DirecTV's U.S. rival, EchoStar Communications Corp., has reportedly emerged as a bidder.

Hartenstein declined to comment on how talks were playing out, but he did say that the management change would not affect negotiations. He also cited recent General Motors' statements indicating that talks were continuing and the companies hoped to have a deal sooner rather than later.