Perils of non-family managers

February 25, 2010
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Automotive News posted an unusual story (registration required) yesterday quoting the former head of Toyota’s U.S. operations as saying the company had been taken over by “anti-family, financially oriented pirates,” and that the only person who can save the company is family scion Akio Toyoda.

Jim Press, who left in 2007 after 36 years with Toyota, told the Detroit publication that the company didn’t want him talking about its problems, but that he “can’t stand it anymore and someone has to tell it like it is.”

Toyoda, the grandson of Toyota founder Kiichiro Toyoda, took the reins as CEO last summer as the company suffered sales declines and escalating quality problems.

Press, who later became president of Chrysler LLC, didn’t disclose names of the people he believes undermined Toyota’s corporate culture over the past decade, but emphasized Akio Toyoda embodied the values that made the company a global manufacturing powerhouse.

Speaking of non-family executives, Press said, “They didn’t have the character necessary to maintain a customer-first focus.”

Press’ comments will sound familiar to people who stick with some family-owned companies after an acquisition or new management arrives. In other cases, new blood shakes up staid cultures; employees don’t recognize it at first, but new managers save what would have been a sinking ship. Outsiders also can bring professionalism and stamp out family dysfunction.

The Indianapolis area has seen a number of family-controlled businesses taken over in the past few years. Here are just a few examples:

— Marsh Supermarkets, which was publicly traded but controlled by the Marsh family, was acquired in 2006 by Sun Capital Partners.

— First Indiana Bank was sold in 2008 to Marshall & Ilsley, ending a long run by the McKinney family.

— Speaking of banks, and going back a decade, Peoples Bank was bought by Fifth Third Bancorp, ending an era of McWhirter oversight.

— Norm Vogel & Sons, a household appliance dealer on the east side, was acquired in 2006 by locally based Clark Appliance.

— Going back decades, the Lilly family hasn’t run the pharmaceutical company in a long time.

That’s a small list. You’ll think of other companies.

What’s your opinion of how these outfits have been handled? Are they better off or in worse shape now that they’re in new hands?

What about the larger question of family ownership? Would you rather be part of an organization run by a family, or not?
 

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  1. John, unfortunately CTRWD wants to put the tank(s) right next to a nature preserve and at the southern entrance to Carmel off of Keystone. Not exactly the kind of message you want to send to residents and visitors (come see our tanks as you enter our city and we build stuff in nature preserves...

  2. 85 feet for an ambitious project? I could shoot ej*culate farther than that.

  3. I tried, can't take it anymore. Untill Katz is replaced I can't listen anymore.

  4. Perhaps, but they've had a very active program to reduce rainwater/sump pump inflows for a number of years. But you are correct that controlling these peak flows will require spending more money - surge tanks, lines or removing storm water inflow at the source.

  5. All sewage goes to the Carmel treatment plant on the White River at 96th St. Rainfall should not affect sewage flows, but somehow it does - and the increased rate is more than the plant can handle a few times each year. One big source is typically homeowners who have their sump pumps connect into the sanitary sewer line rather than to the storm sewer line or yard. So we (Carmel and Clay Twp) need someway to hold the excess flow for a few days until the plant can process this material. Carmel wants the surge tank located at the treatment plant but than means an expensive underground line has to be installed through residential areas while CTRWD wants the surge tank located further 'upstream' from the treatment plant which costs less. Either solution works from an environmental control perspective. The less expensive solution means some people would likely have an unsightly tank near them. Carmel wants the more expensive solution - surprise!

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