issue pdf:11032008 - Crain`s Cleveland Business

CCLB 11-03-08 A 1 CCLB
10/31/2008
2:14 PM
Page 1
$1.50/NOVEMBER 3 - 9, 2008
Nat City
employees
gloomily
await fate
By ARIELLE KASS
[email protected]
By DAN SHINGLER ■ [email protected]
T
he battered U.S. auto industry finds
itself on its roughest road ever. And,
like it or not, all of Northeast Ohio is
along for the bone-rattling ride, as a
critical economic sector — the region’s automotive supply industry — straps in and braces for a
possible crash.
After years of cutting costs to comply with the
demands of major automakers and especially
Detroit’s Big 3, local manufacturers are facing
their toughest challenges in decades as they
wait to see how the sector negotiates dangerous
economic curves — and who will survive the
trip. Already, many suppliers have shaken off
workers as they’ve negotiated the bumps in the
road, with more cuts likely to come.
See AUTO Page 38
KRISTEN WILSON ILLUSTRATION
The mood at National City Corp.,
employees say, is glum. Somber.
Morose.
But despite the uncertainty workers
have felt since the Oct. 24 announcement of the bank’s planned sale to
Pittsburgh’s PNC Financial Services
Group, many employees say they’re
still working hard. And that, if they can,
they want to stay with the company.
All employees interviewed for
this article were granted anonymity
so they could speak candidly about
their employer as they sorted through
their emotions
regarding the
“My résumé
sale.
is out there,
One worker,
but my
a technology
ultimate goal
implementation specialist
is to stay with
who works out
the bank.”
of the bank’s
– National City
headquarters
Corp. employee
on East Ninth
Street in downtown Cleveland, said many employees
still do not have a clear understanding
of why National City decided it no
longer could make it, something he
and others said they find “frustrating.”
“There’s no one concise point
where employees understand what
happened,” he said. “We were getting
ready to go through a tough road and
the rug was pulled out from under us.
My résumé is out there, but my ultimate goal is to stay with the bank.”
The specialist already has had
more than one job offer that could
take him away from the uncertainty
at National City. But it’s his respect
for the CEO, Peter Raskind, that
makes him want to stay and see what
happens.
“From where I sit, a great majority
of people do still have the utmost
respect for Raskind,” he said. “He’s
been very open in terms of sharing
with us plans for moving the organization forward.”
Mr. Raskind and James Rohr, PNC’s
chief executive, asked employees to
give them 30 days to sort out what
would happen with the merger before
44
See BANK Page 37
0
NEWSPAPER
71486 01032
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SPECIAL SECTION
REAL ESTATE
Lakefront development plans require balancing
public access, environmental impact ■ Page 15
PLUS: RESTORED STOREFRONTS ■ ADVISER ■ & MORE
Entire contents © 2008
by Crain Communications Inc.
Vol. 29, No. 44
CCLB 11-03-08 A 2 CCLB
2
10/31/2008
1:28 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
NOVEMBER 3-9, 2008
ON MORE SOLID GROUND
COMING NEXT WEEK
Big companies’ pension plans are significantly better-funded now than they were five years ago,
according to data from consulting firm Watson Wyatt Worldwide. In 2007, 34% of defined-benefit plans
for Fortune 1000 companies showed a surplus, while only 5% had funding levels below 70%. That’s a
sharp contrast to 2002, when only 9% of plans were fully funded and 35% were below the 70%-funding
mark.
Small Business
Many local entrepreneurs develop
business expertise and experience out of state. These
so-called “Buckeye
Boomerangers” then return to
their home turf to set up shop.
Pension plan funding levels at Fortune 1000 companies
Year Less than 7070%
79.9%
REGULAR FEATURES
Classified...........................................36
Editorial.............................................10
Going Places......................................18
Letters...............................................10
Reporters’ Notebook............................39
Stocks...............................................39
8089.9%
9099.9%
100109.9%
110120% or
119.9%
more
2007
5%
11%
22%
28%
18%
8%
8%
2006
10
18
27
24
10
7
4
2005
20
22
27
19
7
2
3
2004
20
20
28
19
8
2
3
2003
22
24
23
16
8
4
3
2002
35
25
19
12
6
2
1
SOURCE: SOURCE: WATSON WYATT WORLDWIDE; WWW.WATSONWYATT.COM
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CCLB 11-03-08 A 3 CCLB
10/31/2008
3:35 PM
Page 1
NOVEMBER 3-9, 2008
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
3
Once-robust Rysar facing a ‘nightmare’
Mounting legal woes, shrunken payroll lead builder back to home rehab
By STAN BULLARD
[email protected]
Facing a fresh, $2.7 million foreclosure filing over his mostly empty,
91-home subdivision at the old
Miles Drive-In site in Warrensville
Heights, homebuilder Ken Lurie
sums up the impact of the credit
crunch on his business in a single
phrase.
“It’s a nightmare,” said Mr. Lurie,
CEO of Rysar Properties.
Financial and legal woes faced by
the Cleveland-based concern that has
built 2,000 homes since 1991 have
FORTHERECORD
HEARINGS SLATED ON
PNC-NAT CITY DEAL
■ U.S. Rep. Steven C. LaTourette
said the House Committee on
Financial Services will hold hearings
Nov. 12 and Nov. 18 into what he
characterized as “the potential
misuse of bailout funds, including
the purchase of National City Bank
in Cleveland.” Rep. LaTourette, a
Republican from Bainbridge Township and a senior member of the
committee, said he spoke with
committee chairman Barney Frank,
D-Mass., and “urged an investigation after it was revealed that $7.7
billion in federal bailout money was
used to help Pittsburgh-based PNC
(Financial Services Group Inc.) buy
National City at a fire sale price.”
Rep. LaTourette reiterated his belief
that the Comptroller of the Currency,
John Dugan, helped orchestrate the
sale of National City to PNC and
pushed for a quick sale. PNC was a
client of Mr. Dugan, a lawyer,
before he became Comptroller in
2005. Mr. Dugan has denied that
his relationship with PNC was a
factor in the sale. Rep. LaTourette
said he has submitted a “sweeping
public records request” to the
Treasury and Office of the Comptroller of the Currency about the
National City sale. — Scott Suttell
RETIRED COP ACCUSED
OF STOCK SCHEME
■ A retired police officer allegedly
preyed on his former co-workers by
raising at least $620,000 to buy
stocks on their behalf but that he
instead used for his own benefit.
Painesville resident Raymond
Thomas, 47, acted as an unregistered investment adviser for police
officers, firefighters and family
members, according to a complaint
filed by the Securities and Exchange
Commission. It alleges that Mr.
Thomas used his company, Strictly
Stocks Investment Co., to bilk customers out of money that he instead
used for his own limousine and title
companies. — Arielle Kass
THINSOLUTIONS BUYS
O-WEB DIVISION
■ Information technology services
company Thinsolutions of Lakewood
has acquired the web development
division of O-Web Technologies Ltd.
of Cleveland. O-Web sold the division
so it could focus on its online food
ordering software, Onosys, said
O-Web senior sales manager Stan
Garber. — Chuck Soder
put Mr. Lurie back in his car scouting
for inner-city homes to fix up.
A Rysar staff that once numbered
45 is down to four. The 11th-largest
builder by home starts in 2004 now
does not make Atwell-Hicks Development Consultants’ list of the
largest Northeast Ohio builders —
and that’s even though the list isn’t
what it once was. A builder with just
28 starts was one of the seven most
active builders in the region as of
mid-2008, according to Atwell-Hicks.
Mr. Lurie’s focus no longer is on
counting housing starts, except at his
Bluestone condominium project in
Cleveland Heights. He’s worrying
about selling what he has finished.
“If we have buyers who can
finance a $100,000 house, we’ll
work with them,” Mr. Lurie said. “If
they can’t, we’ll work on a lease-toown arrangement, which can be
very attractive.”
In the meantime, he said, “I’m
back where I started — rehabbing
houses.”
Rysar’s biggest legal woe, among
many legal actions, is a lawsuit
Citizens Bank of Flint, Mich., filed
Sept. 11 in the U.S. District Court in
See RYSAR Page 33
STAN BULLARD
Rysar Properties’ Cinema Park is the subject of a $2.7 million foreclosure lawsuit filed by Citizens Bank in U.S. District Court in Cleveland.
A. Schulman
praised for
reaction to
market swing
INSIGHT
CEO plans emphasis on
healthy packaging sector
By DAN SHINGLER
[email protected]
MARC GOLUB
Ohio Technical College has dramatically increased its enrollment in the past few years, from 350 in 2004 to
more than 1,000 today. At the school’s Automotive Restoration School, Jeremy Yrek (from left) of Richmond,
Mich., instructor Owen Hamrick, Michael Hildenbrandt of Booneville, N.Y., and Steve Johnson of Rockford, Ill.,
work on a car.
NEED FOR SPEED
Rapid enrollment rise allows Ohio Technical College
to feed growing demand for its trained technicians
By DAN SHINGLER
[email protected]
O
hio Technical College is running
on all cylinders these days.
The school teaches students
how to repair just about anything on a car, motorcycle, snowmobile,
ATV or other personal vehicle, as well as
diesel trucks and generators. With trained
technicians hard to come by, it’s seeing
increased demand for its students and its
curriculum, both of which are powering its
growth on Cleveland’s East Side.
Ohio Technical has raised its enrollment
to more than 1,000 students today from
350 in 2004. Along the way, the school has
increased its staff to 170 from 70, bought up
See OTC Page 35
A. Schulman Inc. CEO Joseph
Gingo has his work cut out for him,
including the less-than-pleasant task
of downsizing the
business in reaction to slumping
auto sales. But
analysts who follow the Akronbased company
are applauding
his direct and fastGingo
paced approach
to restructuring the 80-year-old
supplier of plastic resins.
A. Schulman’s plans will result in
job losses at its automotive-related
operations, including in Bellevue,
Ohio, about 10 miles south of
Sandusky. But the company plans to
increase its employment in Northeast Ohio, where its plant in Akron is
focused on the more profitable and
stable business of providing plastics
used in packaging food and other
consumer goods.
“Nothing is recession-proof, but
some things, like packaging, are recession-resistant,” Mr. Gingo said.
A. Schulman plans to increase the
number of production lines in Akron
to four from two, boosting its
employment to as many as 60 jobs
from the current 20 by the time the
expansion is done. A. Schulman in
total employs about 2,200 people,
including 353 in Ohio and 90 in the
rest of the United States. The bulk of
its employees are in Europe.
Mr. Gingo, who became CEO at
the start of 2008 after a 40-year
career at Goodyear Tire & Rubber
Co., said A. Schulman will trim operations that provide the auto industry
with specialty plastics through its
engineered products division.
The CEO said the company would
communicate soon with workers about
the downsizing, possibly as early as
See SCHULMAN Page 8
CCLB 11-03-08 A 4 CCLB
4
10/31/2008
1:44 PM
CRAIN’S CLEVELAND BUSINESS
Page 1
WWW.CRAINSCLEVELAND.COM
NOVEMBER 3-9, 2008
Despite public airing
of struggles, Rego’s
confident in future
By JOHN BOOTH
[email protected]
Locally owned Rego’s grocery
stores may bear visible bruises of
the tough economy, but there’s still
a determined optimism within the
family ownership.
“We’re not going out of business,”
said Jim Rego, part-owner of four of
the six Rego’s markets. “Things will
pick up in the next couple weeks and
things will get better. There are no
plans to close anything or to go out of
business.”
Sal Rego, who owns two stores outright and has a stake in two others,
said in an e-mail that Rego’s “main
goal in this very difficult economic situation is to continue to keep and
create new jobs in the local market
and help support the community.”
Evidence of Rego’s struggles has
come into the public eye over the past
ighly ranked. Again.
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few months. Gaps widened on the
shelves as inventory levels dropped;
the Lakewood Heights Boulevard store
in Cleveland closed in July; the trustee
in the Chapter 7 bankruptcy for State
Fish Inc. has filed suit against Rego’s
for unpaid bills; and a dire-sounding
e-mail regarding Rego’s future spread
across the area.
Though the half-dozen stores all
bear the Rego family name, they’re
run by three separate ownership
groups. The Rocky River Lake Road
Market and Strongsville stores are
owned by Alan Rego Sr., Jim Rego and
Sal Rego. The Kamm’s Corners and
Westlake locations are run by Rego’s
Fresh Markets, which is owned by
Alan Rego Sr., Alan Rego Jr., Chuck
Rego Sr. and Jim Rego. Sal Rego is the
sole owner of the Rego’s stores in
Brunswick and North Royalton.
Regarding lower inventory levels,
Jim Rego said they’re largely a result of
managing things more closely.
“The cost of doing business is
going up and business is flat, so it’s a
challenging time,” he said. “But we’ll
work through it.”
Asked in a brief telephone conversation about the state of Rego’s, Sal
Rego responded, “I am fighting my
way through the myriad of financial
disasters out there in the world and
trying to get a business loan.”
An Oct. 2 filing with the U.S. Bankruptcy Court lists all six Rego’s stores
as defendants in an adversary
proceeding related to the bankruptcy
of State Fish and seeks a total of
$23,349.93. More than half that
amount is owed by two stores: Rego’s
West Valley Market Place in Brunswick
($6,882.15) and Rego’s Strongsville
Market ($6,929.76).
Last month, Candace Rego Caterna,
the former deli and seafood supervisor
for some of the Rego’s locations and
the daughter of Sal Rego, composed
an e-mail seeking support for the
stores. In it, she wrote that the economic situation “is a danger that could
bring us to an end very, very shortly.”
In a phone call, Ms. Caterna said her
e-mail “wasn’t meant to be a campaign,” but it spread virally and turned
up in a Sept. 29 Plain Dealer column.
Ms. Caterna shared with Crain’s
Cleveland Business an Oct. 7 e-mail
written by Sal Rego as a response to
that newspaper piece. In addition to
the statement about the company
seeking to keep and create jobs, Mr.
Rego’s note says the company spent
$750,000 upgrading the North Royalton store this year, and that “with the
help of the city of North Royalton, we
are trying to bring more traffic to the
corner and add to the city’s tax base.”
North Royalton development
director Tom Jordan said the city
isn’t planning to put municipal
funds into the store, though it has
offered to help find financing.
“The city did contact Sal and make
offers of the quasi- or governmentrelated financing options available to
provide an alternative to more
restrictive private financing,” he said.
A spokesman for United Food and
Commercial Workers Local 880, which
represents meat and grocery
employees at the Kamm’s Corners and
Westlake stores, said the union has not
been advised of any store closings or
received any recent complaints about
reductions in hours or job cuts.
■
Volume 29, Number 44 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700
West St. Clair Ave., Suite 310, Cleveland, OH 441131230. Copyright © 2008 by Crain Communications
Inc. Periodicals postage paid at Cleveland, Ohio, and
at additional mailing offices. Price per copy: $1.50.
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(888)909-9111.
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CCLB 11-03-08 A 5 CCLB
10/31/2008
1:31 PM
Page 1
NOVEMBER 3-9, 2008
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
5
CWRU-based fuel cell developer loses momentum, files for Chap. 11
HydroGen had deal with Samsung, among others
By CHUCK SODER
[email protected]
A Cleveland fuel cell company
has filed for Chapter 11 bankruptcy
protection from creditors because of
its inability to find money to continue
developing its technology.
The nine remaining employees of
HydroGen LLC, which employed 61
people in May, are focused on finding
someone to buy the company and
are preparing for the possibility it
might need to liquidate its assets.
Among those employees is HydroGen’s new CEO, Scott Schecter,
who replaced John Freeh on Oct. 17,
when the publicly traded company’s
board cut three top executives to
conserve cash.
“We had some positive
milestones behind us.”
– Scott Schecter, CEO,
HydroGen
Many potential investors said
they would not back the company
because of the economy, according
to Mr. Schecter, who had been
HydroGen’s chief financial officer.
He stopped short of saying most of
them gave that reason.
“A lot of it had to do with the state
of the capital markets,” Mr. Schecter
said in a phone interview from a
HydroGen office in New York.
The company, which has received
more than $2 million from the state
of Ohio, has been cutting costs since
May to stay afloat while searching for
more money or a buyer.
The phosphoric acid fuel cell
developer had expected to receive
financing this past spring. When the
money didn’t come, it cut more than
20 people from its staff of 61, Mr.
Schecter said.
Since then it has made two more
rounds of cuts, which eliminated the
rest of its research-and-development staff, including more than a
dozen employees based out of its
headquarters at Case Western Reserve
University.
In September, it shut down its pilot
fuel cell system at Ashta Chemicals
Inc.’s chlor-alkali plant in Ashtabula.
The system was converting byproduct
hydrogen gas into electricity, heat and
water for the plant.
The company, which filed for
Chapter 11 protection Oct. 22 in the
Bankruptcy Court for the Southern
District of New York, was “quite
optimistic” at the start of the year
and expected it to be easier to find
financing, Mr. Schecter said.
The company last January struck a
deal with Samsung Corp. in which
the Korean conglomerate agreed to
distribute its fuel cells in Asia, the
Middle East and other regions. It
also was preparing to install the
pilot fuel cell system at the Ashta
Chemicals plant in February.
“We had some positive milestones
behind us,” Mr. Schecter said.
Schuyler Carroll, a lawyer with
New York-based Arent Fox LLP
who is representing a few hundred
companies and organizations to
which HydroGen owes money, said
the company has been missing
various payments for a few months,
and in some cases longer.
“They didn’t pay people for a
long time,” Mr. Carroll said.
Documents filed by Mr. Carroll
show the seven companies that sit on
the committee representing the creditors are owed more than $660,000 in
total. They are among the companies
that are owed the most, he said.
Another creditor, the Federated
Kaufman Fund of Pittsburgh, is
representing itself separately.
The state’s investment in the
technology may not go to waste:
Tom Zawodzinski, a CWRU professor who worked closely with HydroGen, said groups in Ohio that he
would not identify have been
discussing the idea of continuing
on with the technology. Should
they do so, the university might still
provide them assistance, he said.
“We’re open to it,” he said.
■
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CCLB 11-03-08 A 6 CCLB
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10/31/2008
3:33 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
CWRU economics prof: Financing
incubators provides little stimulus
Who’s Behind the Power of
RSM McGladrey?
Future Fund better off recruiting qualified entrepreneurs, he says
We’re Real Estate Deal Makers.
We Help You Get It Done.
By CHUCK SODER
[email protected]
Ron DeGrandis
One might not guess that Scott
Shane teaches entrepreneurship,
judging by his study that suggests
the Fund for Our Economic Future
should not finance business incubators and entrepreneurship education
programs because they’d do little for
Northeast Ohio’s economy.
Dr. Shane conducted the study on
behalf of the Fund, a coalition of area
philanthropic groups aiming to grow
Northeast Ohio’s economy. The
Fund has not financed incubators
or entrepreneurship education programs in the past, but it’s considering
putting money into the region’s
TechLift incubator program, and
some of its individual members fund
entrepreneurship education.
Not everyone who was present
when the Case Western Reserve
University professor unveiled the
study agreed with it, but it will be
taken into account as the Fund
decides how to spend its money in
the future, said Deborah Hoover,
co-chair of the Fund’s Entrepreneurship and Innovation Action Team.
“It’s certainly going to be one
factor,” said Ms. Hoover, who also is
president of the Burton D. Morgan
Foundation, which promotes entrepreneurship.
The study, available at advance
northeastohio.org as an attachment
to an Oct. 20 blog post titled
“Strengthening Entrepreneurship,”
suggested the Fund spend its money
recruiting experienced entrepreneurs
Larry Hirsh
We’ve grown our careers in Northeast Ohio with a host of
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W E A T H E R H E A D
E X E C U T I V E
NOVEMBER 3-9, 2008
and increasing the amount of
venture capital in the region. However,
it was the exclusion of incubators
and entrepreneurship education that
generated discussion during his Oct.
24 presentation to Fund members
and community leaders at Corporate
College East in Warrensville Heights.
“It was pretty lively,” said Dr.
Shane, the A. Malachi Mixon III
Professor of Entrepreneurial Studies
at CWRU.
On incubators — which provide
inexpensive rent, advisers and other
services to young companies — Dr.
Shane cites research from studies
conducted in Israel, Italy and Pennsylvania that he said show few differences in performance between
similar incubated and non-incubated
businesses. The “handful” of studies
showing any increase in performance
note that incubators might just select
better companies to begin with, his
study said.
Wayne Zeman, director of the
Northeast Ohio Incubator Collaborative, disagrees. Mr. Zeman said most
centers of research use some sort
of incubator to help launch young
companies. Plus, he has heard too
many stories about how incubators
helped companies to believe they
don’t work.
“There’s so much anecdotal information that says incubators are good
for the economy,” Mr. Zeman said.
Tracy Kitts, vice president of the
National Business Incubation Association in Athens, Ohio, said there
needs to be a national study on the
effectiveness of incubation. Anecdo-
tally, however, Mr. Kitts said he has
seen companies grow, change their
business plans and build connections in their communities because
of relationships with incubators.
Dr. Shane supports entrepreneurship education, but not as an economic development tool. Too many
students leave the region after they’re
educated, he said, and the remaining
few who display the potential to produce high-growth companies may
not do so for decades.
Phil Rea, director of the Center for
Innovation and Growth at BaldwinWallace College, countered that
point, saying that the center’s
students have shown more interest in
staying in Northeast Ohio because of
the region’s growing focus on entrepreneurship. Plus, students don’t
need to start high-growth companies
to have an impact; programs like
those at the center also teach people
to innovate within existing companies, he said.
The Fund should not discount
incubator and entrepreneurship
education based on one study alone,
said Dan Berglund, CEO of the State
Science and Technology Institute, a
nonprofit in Westerville, Ohio, that
serves organizations involved in technology-based economic development. Mr. Berglund said he believes
incubators improve the survival rates
of young companies, and that the
region won’t have enough entrepreneurs if it focuses only on recruiting
them from elsewhere.
“You want to balance it out by
recruiting your own,” he said.
■
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Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
NOVEMBER 3-9, 2008
Schulman: Downturn forces shift away from most of auto work
continued from PAGE 3
last Friday, Oct. 31, but certainly by
the first week of November. Mr.
Gingo said workers will be told to
expect downsizing generally, though
they likely won’t be told of specific
cuts. He predicted the news would
not come as a surprise to workers,
who are in tune with the ill fortunes
of the domestic auto industry that
they serve.
“They already know they’re
working less hours. These guys read
the newspapers. They’re smart and
they know what’s happening,” Mr.
Gingo said.
The cuts are unavoidable if A.
Schulman is to operate successfully,
said Mr. Gingo, who termed them
“fundamental management.”
“They’re struggling,” Mr. Gingo
said of his two remaining U.S. plants,
in Bellevue and Nashville, that
serve the automotive industry and
Detroit’s automakers specifically.
“This business is down 30% to 35%.
It’s not a minor downturn. It’s a
major downturn.”
The Bellevue plant employs 107,
while the Nashville plant employs
65. The number of workers who will
be affected by the cutbacks has not
been determined, Mr. Gingo said,
but the company likely will need to
eliminate several production lines
from the two plants.
“If you figure demand is down by
a third, it’s not going to be minor,”
Mr. Gingo said. In addition, he said
he wants to steer the company
away from automotive generally —
though not completely, because the
business drives technological developments within A. Schulman as a
whole.
The cuts are difficult to make, Mr.
Gingo said, but he knew coming in
that he would need to make tough
decisions at Schulman.
Analysts show some love
After he sold an auto-related plant
in Canada and shut down another in
Texas, Mr. Gingo was able to improve
the company’s core earnings for fiscal
2008, which ended Aug. 31. Analysts
generally have supported his efforts
and were happy with the company’s
fiscal 2008 net income of $37.1
million after unusual items, up from
$23.8 million the prior year and more
than the $36 million many analysts
were expecting.
“Schulman will prove to have
been in rare company this year as it
exceeded its beginning of the year
profit forecast for fiscal year 2008,”
KeyBanc analysts Saul Ludwig, Ivan
Marcuse and Eric Swanson wrote in
an Oct. 23 report.
Rob Felice, who follows A. Schulman for Gabelli & Co. in Rye, N.Y.,
The payroll deduction benefit
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gives credit to Mr. Gingo personally
for reinvigorating the company.
“Over the last several quarters, we
have repeatedly stated that we felt
positive change was taking place
at Schulman and that new CEO
Joe Gingo brought with him the
expertise needed to improve performance,” Mr. Felice wrote in an Oct.
22 research note. “To this end,
Schulman has moved swiftly over
the last 12 months (for those who
don’t know Schulman, ‘swift’ is a
word we wouldn’t have historically
used to describe the company’s
actions).”
A singular goal
While there seems to be consensus
that Mr. Gingo is taking appropriate
actions to improve A. Schulman’s
performance, it still remains to be
seen whether the company will
remain independent.
In its fiscal 2008 earnings release on
Oct. 21, A. Schulman noted that the
company had rejected one firm
buyout offer that its board of directors
deemed inadequate. The company
says it’s still exploring a possible sale,
and analysts say a sale remains a
possibility.
Mr. Gingo said he can’t concern
himself with whether the board
will sell the company, as he instead
must concentrate on the actions
over which he has control as CEO.
Management decisions, he said,
are aimed at one goal: “We end up
with a more viable, long-term company, whether it would be sold, go on
its own, or be merged.”
■
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