The new CEO of plastics supplier 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 A. 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 A. Schulman termed â€œsix primary areas of transformation across the company.â€ The six are:
- More efficient and effective utilization of A. Schulman's North American manufacturing facilities, including potential restructuring;
- Enhanced focus on value-added products to drive profitable growth in the polybatch and engineered compounds segments;
- Reassessment of A. Schulman's North American automotive business to emphasize profitable areas;
- Suspension of further capital expenditures on its Invision business until its marketing strategy has been refined â€œto ensure accelerated market adoptionâ€ of the company's new, multilayered sheet product;
- Identification of additional efficiencies in the sales and administrative structure of European operations; and
- Ensuring that â€œthe best leadership team is in placeâ€ to execute A. Schulman's strategy.
"While an A. Schulman board member, I was an active advisor to the company on its strategic direction; however, in my new role as CEO, I am excited to be taking the operational reins and driving forward our strategy with a real sense of urgency,â€ Mr. Gingo said in a statement.
Mr. Gingo noted that he was a key member of the turnaround team at his previous employer, Goodyear Tire & Rubber Co., and he intends â€œto quickly and effectively implement the changes necessary to drive profitable growth" at A. Schulman.
A. Schulman also disclosed that Ramius Capital does not intend to drop in advance of the company's Jan. 10 shareholders' meeting its proxy proposal to create an independent board committee to review so-called strategic alternatives that could include a sale of A. Schulman.
A. Schulman said it â€œhas attempted to resolve the hostile proxy contest with Ramius in a manner responsive to stockholders' interests.â€
â€œMost recently, A. 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,â€ A. Schulman stated. â€œThe 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.â€.
A. Schulman said Ramius rejected that offer.
A. Schulman also noted that it already has formed a special committee of independent directors to conduct a review of strategic alternatives. That five-member committee includes two directors nominated by Barington Capital, another large stockholder.
In its announcement, A. Schulman urged its shareholders to vote for the company's board nominees and against the Ramius proposal.
From Crain's Cleveland Business (A Crain publication)