Gary, Re MacBlo, I was trying to find the article re the Bass family, I couldn't however I did read earlier in the week that they have teamed up with the Ont teachers Pension Plan(Huge fund with a very shrewd reputation)have have at least 1 person on the Bd Of Directors and they were instrumental in bringing the new guy in. I took a position last week.. Scott
MacBlo appoints new CEO
Forest products firm hopes turnaround specialist
Thomas Stephens can help stem losses
Wednesday, September 17, 1997
By Paul Waldie
The Globe and Mail
MacMillan Bloedel Ltd. has hired a turnaround specialist as its new chief executive officer to help reverse a steady stream of
losses at Canada's biggest forest products company.
Thomas Stephens, 55, headed Denver-based Manville Corp. for 10 years and is credited with pulling the company out of
bankruptcy protection in the late 1980s. He left Manville in 1996 after a skirmish with the company's board of directors.
Analysts welcomed the appointment as a needed change at the company, although few knew much about Mr. Stephens.
MacMillan Bloedel's share price climbed $1.05 to close at $19.25 on the Toronto Stock Exchange yesterday.
"The reputation he generated at Manville was that of an extremely shrewd financial person," said Andrew Root, an analyst at
Goldman Sachs & Co. in New York. "He has a chief financial officer background, but at the same time he knows his way
around a pulp and paper mill."
He and other analysts said Mr. Stephens faces a big challenge in his new job.
MacMillan Bloedel lost $5-million in the second quarter of 1997, compared with an $11-million profit in the same period a
year earlier excluding a large gain on the sale of an asset.
The company has lost $87-million in total over the past three quarters and many analysts don't expect any profit this year and
only a slight profit in 1998.
"This guy has his plate full," said John Duncanson of Duncanson Investment Research Inc. in Toronto.
"He's got to basically bring in a new management team, or bring along a new team from some of the people inside. And, at the
same time he has to basically rethink the company's strategy."
Mr. Duncanson said MacMillan Bloedel has lacked direction recently and has been poorly served by its upper management,
which consists largely of long-time company workers.
"I think they have done a lousy job for the shareholders," he said. "Look at the stock over the last 10 years. Basically there has
barely been a heart beat, it's been a straight line."
Mr. Stephens replaces Robert Findlay on Sept. 29. Mr. Findlay has been planning to retire after spending 30 years at
Vancouver-based MacMillan Bloedel, the past seven as CEO.
"We're confident that we've got the right person in the right job at the right time," said Dick Haskayne, chairman of MacMillan
Bloedel.
"Although we had to convince him some, he had all the attributes that we were looking for. He is pretty well versed on
[MacMillan Bloedel] and sure as hell knows the industry inside out."
Mr. Stephens was touring MacMillan Bloedel's plant in Pembroke, Ont., yesterday and was unavailable for comment.
Mr. Haskayne acknowledged the challenges Mr. Stephens faces but said the board is confident in his ability. "You get the right
CEO and put them in place with the asset base that [the company has] and give a little help and support and it will work."
Born in Crossett, Ark., Mr. Stephens started his career in 1963 as an engineer at Olinkraft Inc., a forest products company
based in West Monroe, La.
Manville bought Olinkraft in 1979 and Mr. Stephens eventually became president of the forest products division. Manville was
also the largest asbestos producer in the United States and the company had to file for bankruptcy protection in 1982 because
of a flood of lawsuits by people with asbestos-related illnesses. The company also had extensive operations in Quebec,
Ontario, Manitoba and Alberta at the time.
Mr. Stephens was promoted to chief financial officer of Manville in 1985 and then chief executive officer in 1986. He is
credited with pulling Manville out of bankruptcy protection in 1988 by developing a reorganization plan that included a
$3-billion (U.S.) trust fund to pay the injury claims.
Manville reorganized again in 1996 and is now called Johns Manville Corp. and has about $3-billion in annual sales. It was
during that reorganization that Mr. Stephens reportedly had a quarrel with Robert Falise, chairman of the trust fund that also
owns 79 per cent of the company. Mr. Falise reportedly pushed Mr. Stephens out as chief executive officer, although Mr.
Stephens has said he resigned. On his way out, Mr. Stephens collected $7-million in severance.
Mr. Haskayne played down the quarrel and said MacMillan Bloedel hired Mr. Stephens because of his industry experience.
Mr. Haskayne added that Mr. Stephens was eager to end his retirement.
"These war horses get anxious to get back into service," he said. "He is energized and ready to go to work and anxious to start
with MacMillan Bloedel."
MacMillan Bloedel's three divisions -- building materials, paper and packaging -- have been hit with falling prices and rising
stumpage, the fee charged for logging on provincial lands. The province has also been cutting the amount of trees that can be
harvested annually. MacMillan Bloedel has seen its annual harvest allotment fall 15 per cent since 1992.
However, investment analyst Mr. Duncanson said the company is to blame for much of its own problems because other forest
product companies have been able to cope with similar constraints. He said many of the company's mills have higher costs than
its competitors, and the company has moved into some product lines, such as oriented strandboard, too late and now faces a
market that is oversupplied.
MacMillan Bloedel started a five-year restructuring plan in 1994 to cut costs and improve productivity. However, according to
a recent report by Salomon Bros. in New York, the program has had little success.
"The company's goal is to improve operating earnings by roughly $600-million [Canadian] by year-end 1998," the report said.
The company's operating profit in 1996 was $76-million. "So far, however, we do not see how this goal can be achieved in the
allotted time frame."
Canada's biggest forest products company brings in a turnaround artist to pull it out of a dive. But MacMillan Bloedel's new
CEO faces a huge challenge; after racking up losses of $87-million in the past three quarters, many analysts don't expect the
company to make money in this year.
MB -- TSE
52 wk HI $21.70
52 wk LO $16.80
Close $19.25, up $1.05 |
