Byline: By richard siklos section: Section C; Column ; Business/Financial Desk; Pg. Length
PERSON: MICHAEL MCMAHON (70%) Woody Hochwender GEOGRAPHIC
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PERSON: MICHAEL MCMAHON (70%) Woody Hochwender GEOGRAPHIC: CONNECTICUT, USA (96%) UNITED STATES (96%) Connecticut LOAD-DATE: February 25, 2007 LANGUAGE: ENGLISH GRAPHIC: Photo (Photo by Erik S. Lesser for The New York Times) PUBLICATION-TYPE: Newspaper Copyright 2007 The New York Times Company 1093 of 1258 DOCUMENTS The New York Times
Late Edition - Final Some Leveraged Buyout Myths BYLINE: By PAUL B. BROWN SECTION: Section C; Column 4; Business/Financial Desk; WHAT'S OFFLINE; Pg. 5 LENGTH: 679 words THE leveraged buyout boom shows no sign of abating. But Robert F. Bruner, dean of the University of Virginia's business school, asks a troubling question about the trend, which has been driven by past success in increasing cash flow, asset utilization and real rates of return: Why can't the executives who are running these companies deliver the same success for their shareholders? Why must these companies go private to produce these kinds of gains? Writing in Directors and Boards, Mr. Bruner refutes the explanations given by top executives of the companies that have become more efficient once they have been acquired. For example, one reason typically given for increased performance is ''these gains derive from cuts in advertising, maintenance, capital spending or R.& D., but the research does not support this,'' Mr. Bruner writes. Chief executives of public companies say going private frees them from Wall Street's constantly punishing them for sacrificing short-term gains for long-term success, or for undertaking necessary restructurings. But Mr. Bruner points out that public companies like Berkshire Hathaway and Progressive Insurance ''refuse to play the quarterly earnings game,'' and many companies have been able to restructure without their stock plummeting. Finally, he says, much is made of the skills of Kohlberg Kravis Roberts and other successful private equity investors -- ''they have the secret recipe that converts the sagging mature firm into a veritable Schwarzenegger'' and so these companies need to go private to benefit from these special skills. But why, Mr. Bruner asks, ''don't the directors of public firms hire some of these boys and girls to learn their secrets.'' After all, there is no patent on what the buyout firms know. C.E.O. SUPERMAN -- One reason corporate leadership seems so bad is that we expect too much of the people at the top, say four M.I.T. business school professors in a Harvard Business Review article, ''In Praise of the Incomplete Leader.'' ''It's time to end the myth of the complete leader: the flawless person at the top who's got it all figured out,'' they write. ''In fact, the sooner leaders stop trying to be all things to all people, the better off their organizations will be.'' The professors argue that leadership comprises four main traits: Understanding the context in which the company operates; building relationships within and across the organization; creating a compelling vision of the future; and determining how to achieve that vision. Typically, leaders are strong in only one or two of those areas. The authors say that instead of trying to excel in all four, executives should concentrate on their strengths and rely on others to compensate for their weaknesses.C.E.O. D.Y.I. -- ''We are in the midst of the largest entrepreneurial surge this country has ever seen,'' Phaedra Hise writes in Fortune Small Business. A record number of businesses were created in 2005 and ''the trend shows no sign of abating.'' ''The Bureau of Labor Statistics found that more businesses were created in the first quarter of 2006 than during the same period the previous year,'' she adds. Among the findings: Recent immigrants started 25 percent more businesses per capita than native-born citizens did last year. From 1997 to 2006 the number of women-owned small businesses climbed 42 percent, to 7.7 million. More than 37 percent of individuals in the highest tax bracket are business owners. Americans working at companies with more than 2,500 employees: 37 percent; Americans working at companies with fewer than 100 employees: 36 percent. 66 percent of people surveyed said they wanted to start their own company one day; more than a third of those said they planned to do so in the next five years.FINAL TAKE -- Here's an easy way to save money, courtesy of Kiplinger's, based on a study by Synergistics Research: ''Nearly 80 percent of credit card users who asked their lenders for a lower rate got one.'' Half of the people who were turned down canceled their card. PAUL B. BROWN
Copyright 2007 The New York Times Company 1094 of 1258 DOCUMENTS The New York Times
Late Edition - Final Family Hands Off Its Business, and Its Philosophy BYLINE: BY JEFF BAILEY SECTION: Section A; Column 4; Business/Financial Desk; Pg. 1 LENGTH: 1526 words DATELINE: HOLLAND, Mich. Right up there with putting an aging parent in a nursing home stands the wrenching job of handing over a family business to be run by outsiders. It happens to any family firm that lasts long enough, from Wal-Mart Stores on down. And, as the experience of the 102-year-old Louis Padnos Iron and Metal Company shows, the transition can be as quirky as the founding family. The problem for the Padnoses is an age gap. Third-generation members who run the scrap metal company, which employs about 400 people and has annual sales of about $300 million, are in their 50s. They want to work less. But the fourth-generation Padnoses who might someday want to run the place are still only in their teens. So, the company hired a local philosophy professor, a man who also spends time tutoring convicts at a nearby state prison in classic literature and other topics, to help groom six hired managers to become, well, more Padnos-like. What does that mean? For starters, as the Padnoses themselves point out, they are politically liberal, Jewish and, having grown up wealthy enough to travel widely, they are worldly. Mitchell W. Padnos, one of four third-generation owners who run the company, worked after college at a Barcelona steel mill. His cousin, Jeff Padnos, now the company president, once gave a speech to a Katmandu science club in the middle of a six-month, around-the-world vacation before starting business school, he said. The managers, on the other hand, are mostly conservative, from Protestant backgrounds with working- class roots, and have spent much less time outside Western Michigan. ''We just happen to be a Jewish family sitting in the middle of this,'' said Mitch Padnos, growing up and living in an area that has historically been heavily Dutch. He added that the elder Padnoses expected their children to behave in ways that reflected well on their religion. ''My dad was very sensitive,'' he said. As a result, the third-generation Padnoses view themselves as part entrepreneur, part social worker. And it is the latter quality they seem most anxious to pass along to the managers. ''I'm becoming more and more missionarylike,'' said Jeff Padnos. ''Doing business right really is like applied religion.'' He said he recently agreed to hire a man with a criminal record. If it works out, he said, ''you remember that better than any buy-low, sell-high deal you've made.'' The company said it never laid off workers. A family foundation holds about $7 million and contributes to many local organizations each year. The Padnos name is all over Western Michigan, adorning the Amtrak station here, the engineering school at nearby Grand Valley State University and sculpture gardens in the area. ''They're wonderful benefactors,'' said the mayor of Holland, Al McGeehan. Sure, the Padnoses could sell the company and probably collect considerably more than $100 million. But selling, said Mitch Padnos, would make him just another idle, rich guy. ''I have friends who have no place to go every day,'' he said, his bow tie carefully knotted, mustache precisely trimmed. ''Once you've sold your business, you're done.'' Indeed, many entrepreneurial dynasties build family customs around the business itself, meaning a sale can emotionally upend the family. ''It's really a quagmire,'' said Ted Clark, executive director of the Northeastern University Center for Family Business. ''We hear all the time: I never want to sell.'' Thus three years ago, the Padnoses began talking to the managers about taking on more responsibility and perhaps one day running the company. ''The first thing they all said was, 'O.K., when?' '' said Shelley Padnos, Mitch's sister. She went to a business ethics seminar two years ago and met the speaker, Michael DeWilde. He teaches philosophy at Grand Valley State. A one-time carpenter and labor organizer, he became known in the Grand Rapids area for a program that brought literary classics to groups that normally do not read them, including some prisoners. Ms. Padnos was impressed, and invited Mr. DeWilde to meet with the managers. They communicated poorly with one another, often running problems through a family member, she said. She said she felt they were uncomfortable with ambiguity, seeing issues as black and white. And she worried their conservatism would change the way Padnos was run. ''They would tell you, God helps them who help themselves,'' she said. In her view, though, ''that only works if the playing field is level.'' ''They need to be exposed to the big wide world,'' Ms. Padnos recalled thinking. (She gave each one a Sunday New York Times subscription.) ''It is not unusual to grow up in Holland and think most of the world is Christian Reformed and white.'' The managers, mostly in their 30s, grew up in the area, went to college and, after a job or two, came to Padnos. Al Tomes, director of operations and a 16-year Padnos employee, grew up in a one-stoplight town near here, where his parents operated a campground, he said. Before enlisting in the Army and graduating from college, Mr. Tomes said, he mulled a career at his hometown grocery store. But he decided he would always be beneath the owner's several children. ''There just wasn't going to be room,'' he said. Perhaps it is too easy for the Padnoses to think of the managers as still-developing personalities, rather than merely as fellow adults with a different point of view. ''We all came in here young,'' said Matthew Heitmeier, a manager who buys and sells metals for Padnos. ''It's a parent-child relationship. I don't think we're as closed-minded as they think we are. They hire conservative people. They want us to appreciate the liberal mind-set.'' When Mr. DeWilde, the professor, started meeting with the managers every two weeks in September 2005, he said they initially focused on traditional career concerns. Some saw the meetings as a way to advance themselves as candidates to run the company. Over time, however, they were persuaded that the Padnoses had no intention of naming a single heir apparent. The four family members practice an unusually democratic management. Each is paid exactly the same and no major decision is made unless all four agree. Beginning to think like a team, the managers offered each other constructive criticism. They told Scott O'Neil, the sales manager, he shoots from the hip at times. They told Al Tomes to dress more nicely and work on his grammar. And Mr. O'Neil told Timothy Beers, who manages administrative functions, to stop hanging around the office into the evening just because Jeff Padnos stays late (he also starts late). ''Tim was always there,'' Mr. O'Neil said. Mr. Beers denied hanging around unnecessarily. The managers were assigned readings of Thoreau, Sophocles and a recent essay on Freud. They spent a long weekend in Chicago seeing plays, touring exhibitions of art and architecture and eating at fancy restaurants. And in recent weeks they have debated how to give away $40,000 of the Padnoses' money, an exercise in becoming philanthropists. Mr. Beers, a 12-year Padnos employee, said: ''I've enjoyed it. But it hasn't been an easy transition. While you're sitting there watching a Shakespeare play, it's hard not to think about all the things you could be getting done at work.'' The founder, Louis Padnos, fled Russia at age 13, made his way to Amsterdam, learned to speak Dutch and got on a ship to the United States. He had relatives in Chicago. He became a junk peddler, common work among Dutch immigrants at the time. Because he did not speak English, someone suggested that he move across Lake Michigan to Holland, the Dutch enclave. From a cart and later a horse and wagon, his business prospered. He essentially scoured the area for scrap metal and other discards, then sold the stuff to mills as raw material. Two sons joined and expanded the business. By 1979, Mitch and Jeff Padnos, cousins, joined their fathers. Shelley and Jeff's brother, Doug Padnos, joined later. It remains a tough business and it is dangerous. Two workers have died at Padnos plants in recent years. One was hit last year by a giant blade he was changing on a metal shredder. The other was run over in 2001 by a freight train as he swept scraps away from the tracks. Scrap prices, meanwhile, move wildly, and a dealer stuck with a lot of inventory in a plunging market can be wiped out. Padnos will not disclose profits on its annual sales of about $300 million. However, if its profit margin last year roughly matched the industry's biggest company, Metal Management, Padnos could have had after-tax profit of $15 million to $20 million. The managers, implored to ''act like owners,'' do not see the financial statements, and that irks some of them. ''If they want these people to be more like them, they need to have access to the same information,'' said Mr. Clark, the Northeastern University family business director. Without the context of financial information, he added, the managers cannot be expected to make informed decisions. ''It's an inconsistency,'' Jeff Padnos conceded. ''It's something we wrestle with.'' URL: http://www.nytimes.com SUBJECT: FAMILY COMPANIES (90%); FAMILY (90%); SALES FIGURES (78%); CHILDREN (78%); COLLEGES & UNIVERSITIES (73%); PHILOSOPHY (73%); JEWS & JUDAISM (71%); RELIGION (71%); FOUNDATIONS (70%); SCULPTURE (69%); LITERATURE (68%); IRON & STEEL MILLS (51%); COLLEGE & UNIVERSITY PROFESSORS (68%); BUSINESS EDUCATION (78%) COMPANY: LOUIS PADNOS IRON & METAL CO (72%); WAL-MART STORES INC (58%); NATIONAL RAILROAD PASSENGER CORP (AMTRAK) (50%) ORGANIZATION: Padnos, Louis, Iron and Metal Co TICKER: WMT (NYSE) (58%); WAL (LSE) (58%) INDUSTRY: NAICS452910 WAREHOUSE CLUBS AND SUPERCENTERS (58%); NAICS452112 DISCOUNT DEPARTMENT STORES (58%); SIC5411 GROCERY STORES (58%); SIC5399 MISC. GENERAL MERCHANDISE STORES (58%); SIC5311 DEPARTMENT STORES (58%); NAICS452910 WAREHOUSE CLUBS & SUPERCENTERS (58%) PERSON: Jeff Bailey; Mitchell Padnos; Shelley Padnos; Doug Padnos GEOGRAPHIC: MICHIGAN, USA (94%) UNITED STATES (94%) Holland (Mich) LOAD-DATE: February 24, 2007 LANGUAGE: ENGLISH GRAPHIC: Photos: The managers at Padnos are mostly in their 30s, grew up in Western Michigan and attended college. Tony Soto, a trailer mechanic in the machine shop at Padnos, has worked for the company for 40 years. Mitchell Padnos, from left, Shelley Padnos and Doug Padnos, with family portraits at the scrap yard of Louis Padnos Iron and Metal Company. (Photographs by Sally Ryan for The New York Times)(pg. C9)
Copyright 2007 The New York Times Company 1095 of 1258 DOCUMENTS The New York Times
Late Edition - Final President Promotes Alternative Energy With a Car Show of Sorts BYLINE: By MATTHEW L. WALD SECTION: Section A; Column 1; National Desk; Pg. 10 LENGTH: 322 words DATELINE: WASHINGTON, Feb. 23 President Bush turned to alternative fuels, and alternative companies, to argue Friday that his goal for reining in gasoline consumption in the coming decade was realistic. On the South Lawn of the White House, Mr. Bush inspected a version of the Toyota Prius, the popular Japanese gas-electric hybrid, that had been rigged with a Canadian-built battery pack to allow it to operate more of each day on electricity, along with a South Korean sport utility truck modified by a small California company to run entirely on batteries. Neither is now a mass-market product, but each, the president said, is evidence that entrepreneurs will rush in to solve the nation's oil addiction. He called on Congress to approve financing that he has requested for research. The administration has set a goal of reducing gasoline consumption within 10 years by 20 percent from current forecasts. The question is, Which technologies will prove viable? The modified Prius shown Friday carried an extra battery pack in the space intended for the spare tire and had undergone software modification, so that it used more battery power than a standard Prius, reaching higher speeds before starting up the gasoline engine. Ric Fulop, vice president of A123 Systems of Watertown, Mass., which modified the car, said a battery that would power it for about 40 miles between overnight chargings cost $10,000 and would last through 7,000 cycles of charging and discharging -- ''more than the life of the vehicle.'' The electric truck can go 130 miles between chargings, said Bryon Bliss, vice president at Phoenix Motorcars of Ontario, Calif. The company has orders for 75, at $45,000 each, and hopes to sell 500 this year and 6,000 next year, Mr. Bliss said. To a repeated question as to whether he would consider one of the vehicles for his ranch in Texas, Mr. Bush simply wished the assembled reporters a good weekend and returned to the Oval Office. URL: http://www.nytimes.com SUBJECT: AUTOMOTIVE FUELS (91%); GASOLINE (90%); US PRESIDENTS (90%); ALTERNATIVE FUEL VEHICLES (90%); CONSUMPTION (90%); HYBRID VEHICLES (90%); AUTOMAKERS (89%); ENERGY EFFICIENCY & CONSERVATION (78%); SPORT UTILITY VEHICLES (78%); AUTOMOTIVE TECHNOLOGY (77%); MOTOR VEHICLES (77%); ELECTRIC VEHICLES (77%); ENTREPRENEURSHIP (73%); PETROLEUM PRODUCTS (72%) Automobiles; Fuel Efficiency; Electric and Hybrid Vehicles; Batteries; Utility Vehicles and Other Light Trucks; Automobiles; Oil (Petroleum) and Gasoline; Research; Finances ORGANIZATION: Toyota Motor Corp PERSON: GEORGE W BUSH (93%) Matthew L Wald; George W (Pres) Bush GEOGRAPHIC: MASSACHUSETTS, USA (73%); CALIFORNIA, USA (71%) CANADA (88%); UNITED STATES (79%) Japan; Canada; South Korea LOAD-DATE: February 24, 2007 LANGUAGE: ENGLISH PUBLICATION-TYPE: Newspaper Copyright 2007 The New York Times Company 1096 of 1258 DOCUMENTS The New York Times
Late Edition - Final Working in France, in Style of Silicon Valley BYLINE: By JOHN TAGLIABUE SECTION: Section C; Column 3; Business/Financial Desk; Pg. 1 LENGTH: 1325 words DATELINE: AIX-EN-PROVENCE, France Jacques Souquet had gone through several start-ups in Seattle, but he still was not entirely prepared for beginning a high-tech company in his native France. Failure is still a no-no here, creating a challenge for any start-up. Not to mention the idea that difficulty here seems a contradiction in terms for, after all, the word ''entrepreneur'' is French. And Mr. Souquet, 58, a compact man with a gentle manner, has a lot of rules to learn. When he once had to meet a deadline, he asked his colleagues to come in on a Sunday, which they did; but Mr. Souquet got a scolding from his lawyer, who lectured about the legal limits on the French workweek. Now, Mr. Souquet's company is up and running smoothly, and that is a testimony to recent changes in France and greater Europe: start-ups are no longer rare. Moreover, Europe's new entrepreneurs are turning West to learn the start-up culture bred in Silicon Valley before coming back here to apply their learning. After the Internet bust, the number of European start-ups in the computer and telecommunications sectors began growing again in 2003, according to the Center for European Economic Research, in Mannheim, Germany. And venture capital is pouring into start-ups, which last year attracted about $970 million, the highest level in a decade since the Internet boom ended in 2000. Overall venture capital fund-raising in Europe is more than twice the levels of 2002. In France, the number of new businesses set up last year rose 4 percent, to 233,052, over 2005, according to the Agency for the Creation of Businesses, a government body. The number of small American businesses also grew that much, at 4.5 percent, but at 671,800, there are nearly three times as many such American companies, according to the Small Business Administration. Mr. Souquet's experience illustrates how far the Continent has to go if it hopes to match the United States. He was able to lure eight of his 27 employees back from the United States. And after two years, he is preparing to offer his product in 2008, a device that measures the elasticity of living tissue, to assist doctors in diagnosing and treating cancer. Still, Aix is not Seattle. French attitudes are a bit rigid, compared with the American approach of if-at-first-you-don't-succeed. And French law, which mandates a 35-hour week, still crimps entrepreneurial flair. ''In a start-up environment, you cannot work a 35-hour week,'' Mr. Souquet said, referring to the time he asked his colleagues to work on a Sunday. ''My lawyer was furious,'' he said, fearing the company could be penalized. Mr. Souquet also recounted that at Stanford University, where he got his Ph.D. in applied physics, one of his teachers, William Shockley, a pioneer in transistors who shared the 1956 Nobel Prize in physics, taught by discussing failed experiments. ''Then he would turn to another page, showing why the experiment failed,'' Mr. Souquet said, recalling images of his professor's Bell Labs notebooks. ''He called them constructive failures.'' Mr. Souquet's company began with a colleague's fear that France was failing to retain its scientists. Georges Charpak, the winner of the 1992 Nobel Prize in physics, came to him. ''He told me, 'It's dramatic,' '' Mr. Souquet said, describing how his French colleague begged him to help stanch a drain of French talent to the United States by promoting start-ups here. ''He said his best laboratory talent was going to the United States, that he was about to lose 15 people who were being offered grants by U.C., San Diego.'' So two years ago, Mr. Souquet began gathering patents, including several from a Russian emigre, Armen Sarvazyan, whose own start-up, Artann Laboratories, in West Trenton, N.J., held key patents for working with shear waves crucial to Mr. Souquet's device. A shear wave is so named because it moves through the body of an object, unlike a surface wave. At his previous start-up, SonoSite, which is based in Seattle, Mr. Souquet helped develop hand-held ultrasound devices that were essentially conventional technology, drastically miniaturized. Mr. Souquet's latest device is ''a new concept,'' Mr. Sarvazyan said. ''It opens an era, not only for elasticity, but for imitating the sense of touch, the feeling of a doctor,'' which is now often crucial in diagnosing cancer. Mr. Souquet had broad experience in ultrasound, having worked in the United States for Varian Semiconductor, before moving to ATL Ultrasound in Seattle. Together with a small group of ATL researchers, he founded SonoSite. When Mr. Charpak approached him, Mr. Souquet was the head of research in the medical division of Philips, the Dutch electrical giant. Weary of the constant travel and the bureaucracy of a global giant like Philips, Mr. Souquet heeded Mr. Charpak's cry for help. His idea, as outlined on the company's Web site, is to develop a device that would use ultrasound to measure the elasticity of human tissue. Since cancerous tissue loses much of its elasticity, such a device would be useful in helping diagnose and treat cancer in the breast, he said, but also the prostate gland, the thyroid and the liver. SuperSonic Imagine, with headquarters in a glass-and-steel corporate park outside this southern French resort city, was floated with Mr. Souquet's own savings, plus money from French government sources. Last March, a group of venture capital funds led by Credit Agricole Private Equity pumped 10 million euros ($13 million), into the company. Amounts of capital like this are still only a fraction of the money flowing into start-ups in the United States, but in Europe, their impact is widening. The European Private Equity and Venture Capital Association, set up in 2001, has seen its membership grow to almost 950 members. Representatives of the association tell of many technology success stories, like that of Xavier Niel, 39, a entrepreneur based in Paris who in 2002 started Free, now the No. 2 Internet access engine in France, after Orange, the France Telecom unit. Vectrix began in Italy about a decade ago, but came into its own only in 2003 when Carlo Di Biagio, the former Ducati Motorcycle chief executive, became its boss. It is about to bring to market a novel electric-engine scooter, with a top speed of about 62 miles an hour, developed with help from about $50 million in venture capital. ''From the point of view of technology, this was a real innovation,'' said Alexia Perouse, director of life science investments at Credit Agricole, explaining why they gave the money to Mr. Souquet. Later this year, the venture capital funds will consider a second grant of 20 million euros, Mr. Souquet said. In April, Mr. Souquet plans to talk with the Food and Drug Administration to have the devices certified. By next year, he hopes to begin delivering them. SuperSonic is focusing primarily on breast cancer, and its device employs different types of ultrasound waves that produce better images than existing diagnostic methods -- X-ray, ultrasound echography and magnetic resonance imaging. Conventional ultrasound, said Dr. Stephen B. Corn, who teaches at Harvard Medical School and is director of clinical innovation at Children's Hospital Boston, ''is not always sensitive and specific enough, particularly in cases of dense breast tissue.'' ''It looks very intriguing,'' he said of the company's work, ''very exciting.'' Mr. Souquet has hired a marketing director, opened an office in Seattle, and has chosen the tentative design for the first product. And his company has some of the Silicon Valley feel. People sit in open carrels, rather than closed offices; dress is casual. At lunch, employees sit around an open counter in the center of the building. ''It's easy in the States,'' Mr. Souquet said, still bemoaning the French hardships. ''You know what to do; you go to Barnes & Noble, you buy a book, 20 tips to create a start-up.'' Yüklə 4,36 Mb. Dostları ilə paylaş:
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