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. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

  4. downtown in the same area as O'malia's. 350 E New York. Not sure that another one could survive. I agree a Target is needed d'town. Downtown Philly even had a 3 story Kmart for its downtown residents.

  5. Indy-area residents... most of you have no idea how AMAZING Aurelio's is. South of Chicago was a cool pizza place... but it pales in comparison to the heavenly thin crust Aurelio's pizza. Their deep dish is pretty good too. My waistline is expanding just thinking about this!

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