A corporate shake-up at Collins & Aikman Corp. has shifted the focus at the largest U.S. injection molder from deal making to operations. The move sends Thomas E. Evans into retirement and moves up plastics manufacturing guru Jerry Mosingo to chief executive officer.
The Aug. 1 surprise announcement comes nearly a year after Troy, Mich.-based C&A confirmed it would buy Textron Automotive Co. Inc.'s trim division, where Mosingo had headed manufacturing.
Mosingo came to C&A with the deal and has served as executive vice president of plastic components and cockpits since January. He was assigned the task of bringing the award-winning Textron operating system to C&A's plastics plants.
The changes also moved David A. Stockman, whose Heartland Industrial Partners is the biggest owner of C&A stock, to chairman. J. Michael Stepp, another Heartland executive as well as C&A executive vice president, chief financial officer and a company director, becomes vice chairman and ``will assume an expanded role in managing corporate staff functions.'' Stockman referred to Mosingo and Stepp as ``co-leaders of our new team,'' in a conference call with employees.
Evans retains a two-year consulting contract with C&A, a $3.5 billion giant that makes nearly every part of the auto interior.
In a news release, Stockman stressed that the management change had nothing to do with any accounting problems, although the company had to restate its earnings in June.
``The changes we're making have absolutely nothing to do with any irregularity, any problems with our financial results,'' Stockman said. ``We're making this change to strengthen this company for our future. This is positive, this is proactive, this is going forward.''
Collins & Aikman's stock price has been suffering. Its shares have fallen from a high of $28.37 to a low of less than $5 during July's stock sell-off mania. The price bounced more than 6 percent in the first hour following the announcement, to $6.72, before closing at $6.63 for a 5 percent gain.
Analysts and consultants said the move caught them by surprise, but added that the firm needed to make a transition, and Mosingo has a good reputation in the industry.
``It's a change in the strategic focus to growth through internal operations, rather than acquisitions,'' said Dennis Virag, president of the Automotive Consulting Group Inc. of Ann Arbor, Mich.
Management changes are not unusual in the wake of a major change, noted Don Robinson, a Chicago business consultant specializing in mergers and acquisitions. Companies are shifting through the phases of operating, integrating and creating new opportunities, he said, adding that studies show 47 percent of senior managers leave a company within a year of a merger.
Evans, 50, came to Collins & Aikman in 1999, and immediately laid out a plan to shift the component maker into an interior manufacturing specialist. With Stockman and Heartland's fiscal backing, the company bought injection molder Becker Plastics LLC by 2001 and the automotive division of Joan Fabrics Corp.
The biggest acquisition, though, was Textron's trim division - a unit respected for its manufacturing and technical expertise, but whose growth was stalled because owner Textron Inc. was not willing to invest in big acquisitions to expand its reach.
Mosingo had instituted some changes within the Textron unit. In early 2000 he championed the purchase of a small research and development company called M&C Advanced Processes Inc. that had created a closed-loop injection molding system. Renamed IntelliMold by Textron, the system was touted for improving cycle times and performance.
Unlike Evans, whose career has focused more on deals, Mosingo's background is in manufacturing, with a history that is atypical of CEOs of multibillion-dollar companies. The 51-year-old has an associate's degree in industrial technology. He is a one-time hourly worker for Ford Motor Co. who has joked about how his family, filled with union members, was dismayed when he ended up in management.
As he prepared to move into new offices at Collins & Aikman shortly after the sale, Mosingo spoke of his plans to wallpaper the unit with value stream maps showing the movement of raw materials and parts through every plant.
He also has his own system of finding the flaw in every plan - cash. At any plant, at any time, he will offer operators a $50 bill to ``break'' the machine or alter the cycle. Anyone able to override the computerized controls comes away with a bonus, while the company learns what has to be fixed.
``I was highly shocked,'' Mosingo told employees following his appointment. ``All at once I realized I was being presented with a great opportunity, and at the same time, a great challenge.
``Then I realized this is a challenge I've trained my whole life for - not necessarily to be a public CEO, but to be the leader of a great team of people to maximize the value of one of the best groups of assets in our industry.''