The new chief executive officer of plastics compounder and distributor A. Schulman Inc. barely has had time to warm up the chair in his office, but Joseph Gingo already has put forth a plan to improve the company's fortunes.
Gingo also has learned that disgruntled Schulman shareholder Ramius Capital isn't about to go away quietly.
Gingo has unveiled what he described as a 100-day plan that addresses what Fairlawn-based Schulman termed ``six primary areas of transformation across the company.'' The firm plans to:
* Use its North American manufacturing facilities more efficiently. Options include potential restructuring.
* Focus on value-added products to drive growth in color and additive concentrates and engineered compounds.
* Assess its North American automotive business to emphasize profitable areas.
* Suspend further capital expenditures on its Invision business until its marketing strategy has been refined ``to ensure accelerated market adoption'' of the company's new multilayered sheet.
* Identify efficiencies in European operations' sales and administration.
* Ensure that ``the best leadership team is in place.''
``While an A. Schulman board member, I was an active adviser to the company on its strategic direction; however, in my new role as CEO, I am excited to be taking the operational reigns and driving forward our strategy with a real sense of urgency,'' Gingo said in a news release.
Gingo noted he was a key member of the turnaround team at his previous employer, Goodyear Tire & Rubber Co., and he intends ``to quickly and effectively implement the changes necessary to drive profitable growth'' at Schulman.
Schulman also disclosed that Ramius Capital does not intend, in advance of the company's Jan. 10 shareholders' meeting, to drop its proxy proposal to create an independent board committee to review alternatives that could include a sale of Schulman.
Schulman said it ``has attempted to resolve the hostile proxy contest with Ramius in a manner responsive to stockholders' interests.''
``Most recently, Schulman offered to have its nominating and corporate governance committee interview and recommend the appointment of one of Ramius' two nominees to the company's board to serve as a director for a one-year term ending at the next annual meeting,'' Schulman said. ``The company would then have supported the re-election of that director as an incumbent for a full three-year term at the next annual meeting, upon the anticipated retirement of another director.''
Schulman said Ramius rejected that offer.
Schulman also noted that it already has formed a special committee of independent directors to review alternatives. That five-member committee includes two directors nominated by Barington Capital Group LP, another large stockholder.
In its announcement, Schulman urged shareholders to vote for the company's board nominees and against the Ramius proposal.
Gingo, 62, was named president and CEO of Schulman on Jan. 1. He had been with Akron, Ohio-based Goodyear for 41 years, most recently as the firm's chief technical officer and executive vice president of quality systems. He has been a member of Schulman's board since 2000.
In a Dec. 17 news release, Gingo said Schulman ``is poised for growth, with the restructuring of our North American operations and the launch of Invision [plastic sheet].''
He replaced Terry Haines, Schulman's longtime leader who originally had planned to retire March 1. Haines, 61, had been with Schulman since 1965 and served as president and CEO since 1991. In the news release, Haines said ``the board and I believe that [Gingo] is absolutely the right person to lead Schulman and build on the progress we have made across our business.''
In a Dec. 19 phone interview, Haines said his decision was ``a personal thing'' involving himself and his family, and wasn't directly affected by the investor turmoil around Schulman in the past three years.
``I've always said that a five- to eight-year stint as a CEO is the right thing, and I've been CEO for 16,'' he said. ``But we just were named as a growth stock for 2008 by Forbes, so I think I'm leaving at the right time and for all the right reasons.''
Haines was referring to Forbes magazine contributor Vahan Jangigian naming Schulman as his ``top conservative idea for 2008'' in an upcoming issue. Jangigian cites recent restructuring of Schulman's North American business unit and management's expectations of an increase of almost 60 percent in fiscal 2008 profit as reasons for his selection. Forbes also ran a glowing profile of Schulman's prospects in its Dec. 5 issue.
Haines described Gingo - who he's known for more than 40 years - as ``the right guy for the job, who's going to have a great opportunity'' with Schulman. In a bit of irony, Gingo's father, Joseph Gingo Sr., was one of Haines' first bosses when he started working in a lab at the firm's Akron, Ohio, plant in 1965.
Gingo said he plans to travel with Haines to learn about the firm's foreign operations. Gingo worked in Europe for part of his Goodyear career. ``I had always wanted to be a CEO,'' Gingo said. ``The opportunity came to me late, but I'm going to take it. I know the company very well, and with Terry Haines stepping down, I feel that part of my job will be to develop a successor.''
In retirement, Haines said, he doesn't expect to get the itch to return to the business world.
``Forty-two years is a long time,'' he said. ``I've got six grandchildren and an airplane that doesn't fly enough. And I'd also like to do some fishing.''