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12/6/2006
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EDS Taps Offshoring Advocate As New President

Ron Rittenmeyer, a strong proponent of hiring tech workers in low-cost countries like India and China, was promoted to president; he retains his current role as chief operating officer.

Outsourcer Electronic Data Systems has promoted Ron Rittenmeyer, a strong proponent of hiring tech workers in low-cost countries like India and China, to the position of company president.

Rittenmeyer retains his current role as chief operating officer. Jeff Heller, who had been serving as president since returning to EDS in 2003, has been named vice chairman, EDS said on Tuesday. Both appointments are effective immediately.

Heller will continue to serve on the EDS board of directors, while chairman and CEO Mike Jordan's position remains unchanged by the shake up, according to EDS.

Analysts have credited Rittenmeyer with helping to author a turnaround that has seen EDS reduce debt while boosting sales and operating margins. In its most recent quarter, EDS said net income was up 83% year-over-year to $128 million, while sales increased 9% to $5.3 billion.

In a November research report titled "Rittenmeyer's Resolve," Lehman Brothers analyst Alan Hellawell said a conversation with the then COO influenced his decision to raise his operating margin forecast for EDS in 2007 from 5.3% to 6.5%. Hellawell said the call boosted his confidence that Rittenmeyer is committed to improving EDS's competitiveness through greater use of offshore workers.

"Rittenmeyer discussed the company's common approach of allowing early severance of employees in Europe and North America, and their replacement in lower cost geographies such as India, China, and Eastern Europe," said Hellawell, in his report.

Before joining EDS in July 2005, Rittenmeyer served as managing director of The Cypress Group, a private equity firm. Previously, Rittenmeyer served as chairman, CEO, and president of Safety-Kleen, a $1.5 billion hazardous and industrial waste management company.

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