Rolls-Royce (RR.), another engineer that has fallen on tough times, offers a worrying precedent. Thursday 2 July was John Rishton's last day as chief executive of the aircraft-engine specialist. By Monday, his successor, Warren East, former boss of Arm, felt it necessary to issue a major profit warning. Getting the bad news out early - so-called 'kitchen-sinking' - is a tried-and-tested management technique, but Mr East must have set a new speed record. As of Wednesday, the shares had fallen 14 per cent since Mr Rishton's departure.
The share price reaction to Smiths' appointment was also striking. The shares opened nearly 1 per cent higher on the day of the announcement - after all, investors have been waiting for this news since before Christmas, when Mr Bowman disclosed his intention to retire. But then they plummeted, finishing the day down 4.9 per cent. It was a bad day for the market - the FTSE 100 was down 1.6 per cent - but that's a pretty remarkable reaction to what ought to have been good news.
Mr Smith - a fitting name, at least - is currently head of the key automotive division at GKN (GKN), another FTSE 100 engineer with a rich heritage. The stock exchange announcement noted that he currently oversees about £4.4bn in sales and has a track record of delivering "above market growth rates" - a critical point given the stalling revenues at Smiths Group.
But stockbrokers speculate that investors had been expecting a heavier hitter. Crucially, Mr Smith has no experience of leading a whole company. For a FTSE 100 executive appointment, that's unusual - and possibly risky. "There was an expectation that we'd get some guy we'd never heard of who had managed a big US industrial group," says one analyst. GKN's shares fell 2.6 per cent on the same day, suggesting Mr Smith will be missed.
The appointment also hints at the kind of transformation envisaged by the Smiths Group board - operational rather than corporate.
For years investors have speculated that the company's parts could be worth more than the whole. Smiths has five divisions that sell different technologies to different markets, from healthcare to oil and gas, homeland security to US housing. With the honourable exception of Berkshire Hathaway, such conglomerates have fallen far out of fashion since their 1960s heyday. The current thinking is that investors want to be able to make diversified portfolios out of focused stocks, rather than achieving their diversification at the underlying company level.
Mr Bowman, the current boss, arrived in late 2007 with a fearsome reputation for striking deals. He had previously overseen two major corporate sales, flogging drinks group Allied Domecq to its French peer Pernod Ricard (Fr: RI) in 2005 and Scottish Power to Spain's Iberdrola (Sp: IBE) in 2007.
But the Australian executive has failed to live up to expectations at Smiths Group. The company has received at least two approaches for its medical unit, which makes drug-delivery devices for US hospitals, but the price has never been high enough for Mr Bowman. The result has been a see-sawing share price - today just 5 per cent higher than on the day Mr Bowman joined. He has achieved "the square root of nothing", to quote another analyst.
His successor's background as a divisional chief is not an obvious training ground for furthering the break-up agenda. Perhaps that is the point: Smith's chairman is said to want to keep the group at its current size.
Instead, Mr Smith is likely to focus on the group's operational problems. Some of these can be pinned on poor market conditions, which continue. Government spending, on which Smiths' detection and medical businesses are heavily reliant, has been under pressure for some years. The collapse in the oil price has this year hit the group's John Crane unit, which makes seals and bearings for oil wells.
But cash generation - which a company can to a large extent control - has also been weak. A stubborn drip of legacy asbestos-related costs has not helped. Such recurring 'exceptional' costs have undermined confidence in the group's underlying profits as a useful measure of performance.
As a successful industrial manager, Mr Smith should be able to draw a line under this sort of thing, but it may require a few profit warnings on the way. Those who have not followed our sell recommendations on Smiths should do so now - or brace themselves.
