In a major management sweep orchestrated by its directors, five top officials including the chief executive officer have left Trend Technologies Inc.
Feb. 4 was the last day on the job at the San Jose, Calif., company for Chief Financial Officer Bob Strickland; Ken Edoff, vice president of sales; Mark Brosius, vice president of development and engineering; and Mark Swanson, general manager of Trend's technology center and its Tool Tech division. William B.R. Hobbs, president and CEO, said he voluntarily resigned the previous week to pursue a different direction.
Hobbs, who had been at Trend since 1998, is working with an investment group to buy another manufacturing company. He said in a Feb. 5 telephone interview that he previously had told Trend's parent company, London-based equity firm Doughty Hanson & Co. Ltd., he did not intend to stay at Trend for a long period of time.
Hobbs said he will remain a significant investor in Trend, an injection molder, metal stamper and contract manufacturer of electronics enclosures.
Trend Vice Chairman Earl Payton has replaced Hobbs as CEO. Payton, former owner of Chino, Calif.-based Cowden Metal Specialties Inc., said he was asked by Trend's board to step into Hobbs' position. The board also made the decision to drop a layer of management at Trend's San Jose headquarters, he said.
``The board wanted to give me a clean piece of paper,'' Payton said.
Board members include officials with Doughty Hanson, several former Trend owners, outside investors, Hobbs and Payton.
But Payton also said that the move mirrors his operating philosophy to put employees closer to customers at plants instead of at corporate headquarters. While he and Hobbs agreed on other management points, they had differed in that approach, Payton said in a Feb. 7 telephone interview.
``I like to take that layer of management and put it behind the plants,'' Payton said. ``The business is so dynamic and fast-moving that if you have one extra layer, it's almost impossible to pull off execution on the communication level with customers.''
Payton said he has no plans to replace any of the employees who left except for CFO Strickland. Instead, he said he would add at least 20-25 sales engineers and project managers at various Trend plants to work with customers.
``It doesn't make any sense to me otherwise,'' he said. ``If they're not making parts or working with customers, they have no reason to be here.''
Trend had purchased Cowden, a precision sheet-metal producer, in late 2000, and Payton acquired an estimated 20 percent interest in Trend, said sources close to the company.
Cowden, a key player in Trend's integration of plastics and metal processes to make enclosures, had six plants and 2,000 employees when Trend purchased the company. Payton had bought Cowden in 1975 and was president and CEO before the sale.
An entrepreneur by nature, Hobbs said he has spent a career helping companies like Trend boost both sales and stature before leaving to grow other companies.
``It was time to move on,'' Hobbs said. ``Once it was determined that I wasn't going to be there for a long time, the company decided to restructure. It's a great opportunity for Trend to grow.''
The executive-level housecleaning at Trend capped what had been a disappointing end to 2001. Before last year, the company had been growing at a fast clip, buying outside injection molders and opening new plants. Sales reached about $580 million in 2001, a huge rise during Hobbs' tenure from less than $200 million recorded in 1998.
But with a sharp decline in the computer and telecommunications markets, Trend was forced to lay off about 1,000 people last year, or about a fifth of its work force. The company then restructured by moving operations at two plants to other, nearby facilities.
Trend suffered its worst quarter at the end of 2001, victimized by a falloff in consumer demand for computers and other core products, said several company sources. Work from Round Rock, Texas-based Dell Computer Corp., its largest customer, had dropped off, sources said.
Yet, more than $100 million in new business is on Trend's books both this year and next, Hobbs said. The company will remain in sound shape for the long term and should have a strong first quarter of 2002, he said.
The departure of top executives at Trend caught some by surprise. Swanson, one of the employees who left Trend, said he was taken off-guard but has no hard feelings toward the company.
``In this economic climate, we have to focus on core essentials,'' he said. ``Part of our work has been trying to develop a new strategic direction and leaner management. If we needed to reorganize to do that, that is their decision.''
Two calls to a Doughty Hanson executive were not returned prior to deadline.
La Jolla, Calif.-based Plastics News correspondent Roger Renstrom contributed to this story.