David Jones OMC President - Chicago Tribune



Chicago Tribune
Saturday, September 27, 1997  
Business Section Page 1 
By Sallie L. Gaines, Tribune Staff Writer.
Tribune reporter Melita  Marie Garza contributed to this story

The battle of the boat builders is on, and we're not talking about a gentlemanly yacht race on Lake Michigan. Outboard Marine Corp. on Friday tapped a former executive of archrival Brunswick Corp. as its new chief executive, and one lawsuit already has been filed.

Waukegan-based OMC said David D. Jones Jr. has assumed the jobs of president and chief executive. Jones had been president of Lake Forest-based Brunswick's marine engine operations until August. Brunswick said at the time that Jones was moving into a new position to "focus on a broad set of marine industry initiatives," but Jones says he was fired.

The announcement is somewhat of a coup for Greenmarine Acquisition Corp., which bought OMC two weeks ago. Hiring a person with a proven record in the marine industry gave credibility to Greenmarine's contention that it is determined to revive the Waukegan-based manufacturer of boats and marine engines. That signal was welcomed among employees and on Wall Street.

But it apparently sent a shock wave through Brunswick, which has suggested that Jones' jumping to OMC violates the Illinois Trade Secrets Act. At least, that's the contention in a lawsuit filed by Jones and OMC against Brunswick, asking for a ruling that the hiring is not illegal.

According to the suit, filed Friday in Cook County Circuit Court, Brunswick fired Jones without warning on Aug. 18, but the company objects to his new job on grounds he may misappropriate trade secrets.

Brunswick attorneys have written letters saying it would be inappropriate for Jones to accept the OMC job, and saying they will pursue the issue if he does so, said attorneys for OMC.

Brunswick spokeswoman Kathryn J. Chieger said the company does not comment on pending litigation.

Lawsuit aside, Greenmarine was under pressure to bring in a strong leader. Greenmarine bought OMC for $18 a share, besting an earlier offer for $16 a share from Detroit Diesel Corp. After its victory, Greenmarine made no announcements about management, even hinting that Harry W. Bowman might stay on as chief executive.

But Bowman--himself brought on board from Whirlpool Corp. in 1995 to restore OMC to health--resigned Thursday, and Greenmarine principal Alfred D. Kingsley assumed the chairmanship.

Jones' skills that so worry Brunswick are the same ones that made him attractive to OMC. In announcing the appointment, Kingsley cited Jones's "strong managerial, motivational and team-building skills."

Analysts were unclear about the impact of the suit, but they approved the hire.

"This is the company's first strategic move," said Hal F. Diamond of Standard & Poors Rating Services in New York. "On the face of it, it appears like it's a positive, that they're committed to restoring the business. But it's going to take time, and you wonder about Greenmarine's long-term commitment."

Analyst Tim Conder of A.G. Edwards in St. Louis, who follows Brunswick but not OMC, agreed it's probably a positive signal. "Outboard is a pure marine company, and David came from a marine division" of Brunswick.

But a former investor in OMC, and a current shareholder of Brunswick, said no appointment can overcome the fatal flaw of Greenmarine's position: It overpaid for Outboard Marine. "They paid $18 bucks for a dog," he said, predicting it will be no quick task to return the company to profitability.

About Jones, the investor said only, "He needed a job and the pay was right, and these people (Greenmarine) are desperate."

Others were more sanguine, saying Greenmarine has no choice but to stick with OMC for the long haul or it will lose its investment. The real issue, they say, is whether new management can reverse OMC's fortunes.

Copyright 1997, The Tribune Company

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