David D. Jones, Jr. Joins Outboard Marine as President and Chief Executive Officer
OMC Press Release 26 Sept 1997WAUKEGAN, Ill., Sept. 26 -- Outboard Marine Corporation today announced that David D. Jones, Jr. has agreed to become its President and Chief Executive Officer, effective immediately.
Mr. Jones has worked in the marine engine industry for more than twenty years. His last position in the marine industry was as the President of the Mercury Marine Division of the Brunswick Corporation, a position he held from December 1989 to August 1997. Prior to that, he was employed as Vice President and General Manager of the Force Outboard Division of U.S. Marine for four years. Mr. Jones has B.S., M.S. and Ph.D. degrees in mechanical engineering from North Carolina State University.
"We are delighted to have David bring his strong managerial, motivational and team-building skills to the new Outboard Marine," said Alfred D. Kingsley, the new Chairman of the Board of Outboard Marine. "We are very confident that David will successfully lead the management of Outboard Marine and return it to profitability."
Outboard Marine is a leading manufacturer and marketer of marine engines, boats and accessories.
SOURCE Outboard Marine Corporation
/CONTACT: Marlena Cannon, Director of Public Affairs and Communications for Outboard Marine, 847-689-5492/ (OM)
[09-26-97 at 10:04 EDT, PR Newswire]
Outboard Marine May Ruin
Greenway's Alfred Kingsley
The Wall Street Journal Interactive Edition September 29, 1997 By Richard GibsonThis story resulted from his interviews with Jones and Kingsly the night of the announcement of David Jones as the New Leader of OMC
Sometimes, when a stock-market operator tries to become an industrialist, the exercise turns into a kind of Waterloo. The result is a lost battle with years of aggravation and little or no return on the investment.
Think of Henry Kravis and RJR Nabisco, or Carl Icahn and Trans World Airlines.
And now that Alfred Kingsley, Mr. Icahn's onetime lieutenant in his 1980s raiding days, has wound up an owner of Outboard Marine, Wall Streeters are wondering whether the beleaguered boat-and-engine company will turn out to be his TWA.
"God forbid," says Mr. Kingsley. He and his eminent backers from George Soros's investment firm put up $325 million this month to buy Outboard shares tendered at $18 apiece, topping a $16-a-share bid by Roger Penske's Detroit Diesel.
Last week, having already hired a new chief executive for Outboard, Mr. Kingsley gave an upbeat talk to Outboard's dealers at a big marine trade show in Chicago. Speaking in a packed ballroom, the Soros group's Richard Katz said, "We're absolutely committed to restoring Outboard to profitability."
The Soros firm won't say how it ended up in partnership with Mr. Kingsley, a gunslinging activist investor who has earned notoriety in recent years by fighting with company managers at Woolworth, Unisys and the former U.S. Shoe, now owned by Italy's Luxottica Group.
Through his Greenway Partners, based in New York, and affiliates, Mr. Kingsley runs some $700 million, counting the Outboard investment. His style is to sink 10% or more of his portfolio into a single stock, then try to persuade the company to break itself up, though he says that isn't the plan for Waukegan, Ill.'s Outboard. "We're going to stay with the boat business," he says.
Some think Mr. Kingsley bought Outboard only to bail out his original purchase of two million shares at $17 or so, which would have shown a loss if tendered to Detroit Diesel. Indeed, Mr. Kingsley has acknowledged, "We didn't know we'd have to buy the whole company -- but we're very happy we did." According to the tender documents, his Greenway funds will have around $80 million of equity in Outboard; the Soros firm, a whopping $192 million. That would give the latter a majority stake through two big Soros funds, dedicated to so-called strategic investments, that have performed unevenly in recent years.
Analysts say Outboard might have fared better with Detroit Diesel, which could have assimilated Outboard's engine unit into its own and perhaps sold the boat business, which has fallen on hard times.
"What can financial types do better than Diesel?" asks Cowen & Co. analyst Harold Vogel: "Can they buy raw materials cheaper? Are they going to put investment bankers on the factory floors?"
Raiders and buyout professionals often yearn for the respectability that comes from running a company hands-on. Thus, Mr. Icahn bought TWA in 1988 -- and took it through bankruptcy court a few years later. Mr. Icahn, who didn't return calls seeking comment, is said to blame Mr. Kingsley for that nightmare, but Mr. Kingsley says, "It's stupid to ask who was to blame for [the decision to buy] TWA."
By comparison, a spokeswoman for Kohlberg Kravis Roberts points out, RJR Nabisco fared better than TWA, though it was "not a good investment" for Mr. Kravis's clients.
Mr. Kingsley is credited with having forced laggardly U.S. Shoe into Luxottica's hands two years ago. But another activist, Guy Wyser-Pratte, claims he did most of the work after Mr. Kingsley's efforts to break up the company failed.
While running Outboard, Mr. Kingsley has to look after Greenway's stakes of $100 million-plus in each of Unisys and Woolworth; both stocks have given him a rocky ride. He also owns a sizable chunk of Inland Steel Industries. He started buying Unisys in April 1995 in hopes of forcing a breakup. He didn't succeed, but the computer company has restructured. While Mr. Kingsley takes credit for some of the changes, a Unisys spokesman says, "Our decisions were based on what we believed was right for the company." Now Mr. Kingsley must fix Outboard's finances. Carl Lindner's American Financial Group is providing temporary financing of $150 million, but that sum must be repaid in nine months, says an American Financial spokeswoman.
"Bankers are coming to us. We will recapitalize Outboard," says Mr. Kingsley. "You're going to see a first-class company coming out of this. I've been around a long time on Wall Street. Don't knock us so bad."
Nine months ended June 30
LATEST QUARTER (JUNE 30, 1997)
Per-share earnings: -$0.25 vs. -$0.18
Average daily volume: 265,416 shares
Shares outstanding: 20.2 million
Trailing P/E: Loss in most recent quarter
Dividend yield: Nil
*Includes nonrecurring income of $18.9 million.RBBI comments - its interesting that the Wall Street Journal article makes absolutely no mention of the announcement of David Jones as the new OMC president when that was the major event of the night (and probably of the whole show). Perhaps they do not want to get involved in the legal issues that raises? The acquisition of Jones should have major impact on Greenway's marine leadership capabilities.
Return to Recreational Boat Building Industry Home Page
Return to Recreational Boat Building Industry Home Page