Turnaround Expert Relies on the Right People, Good Data
12/1/2006 --
EaglePicher CEO David Treadwell shares expertise with Ross School MBA students.
ANN ARBOR, Mich.—David L. Treadwell, BBA '76, is a master at restructuring
companies in distress.
Speaking to students at a Dean's Seminar at the Stephen M. Ross School
of Business on November 14, Treadwell shared some of the lessons he has learned,
first in the real estate business and then under the tutelage of the late Heinz
Prechter, whom Treadwell described as "the consummate entrepreneur."
Treadwell served as CEO of Prechter Holdings, which included specialty vehicle
supplier ASC Inc. as well as publishing and real estate groups. And when Prechter
died suddenly in July 2001, Treadwell sold Prechter's 12 businesses in
nine months, per the family's request.
Later, as CEO of Oxford Automotive, he led the $1 billion Tier 1 automotive
supplier through a successful restructuring process.
Then, in July 2005, several months after EaglePicher Inc. filed for reorganization
under Chapter 11, the firm named Treadwell president of its Hillsdale Division.
Treadwell became COO of EaglePicher in November 2005 and CEO of the EaglePicher
Corp. in August 2006.
Today, EaglePicher is a $600 million diversified holding company comprised
of Hillsdale Automotive and six other businesses: Wolverine Advanced Materials,
EP Minerals, EaglePicher Technologies, EaglePicher Medical Power, EaglePicher
Pharmaceutical Services and EP Boron. Headquartered in Inkster, Michigan, the
company has 4,000 employees and operates more than 30 plants in the United States,
Canada, Mexico and Germany.
Left
to right: Kirk Derr, MBA '08, Kaiser Han, MBA '07, and David Treadwell,
BBA '76
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"People are always the biggest issue. If I do everything else wrong, and I
get the right people, it's okay," said Treadwell, who talks with each of his
division managers once a week in addition to studying monthly reports and developing
six-month action plans and five-year strategies.
"There are two traps you can fall into," Treadwell said, "focusing totally
on the long-range strategy or paying too much attention to details and ignoring
strategy." To maintain balance, leaders must talk to customers and keep on top
of what is happening in the industry.
One of the biggest challenges coming out of bankruptcy is getting good data.
"By the time a firm is bankrupt, the data is bad," Treadwell said.
The second challenge is convincing those who have been disenfranchised to get
back on board, showing them there is a way out of a bad situation. "It's
really kind of fun to work in this kind of environment. Some people like to
help solve a crisis."
Where does Treadwell look when he needs good, solid information? "You won't
always get it from direct reports," he predicted. "You have to get it from the
employees on the front line. I go directly to the person who is filing withholding
taxes and ask to see the receipts. Also, when I walk through a plant, I know
where to look for the scrap boxes to gauge the amount of waste."
When managing multiple companies, Treadwell said, it is important that all
the businesses have a positive cash flow. "You can't take money out of one to
subsidize the other. Each business has to stand on its own. You also can't pick
a favorite child and ignore the other businesses just because one business is
'hot' or more interesting at the time."
When asked what he looks for in a budding CEO, Treadwell responded "communication
skills. There are millions of smart people out there. You can be smart, but
if you don't get along well with people, you'll be an analyst in
the back room."
For more information, contact:
Mary Jo Frank
Phone: 734-647-4626
E-mail: mjfrank@umich.edu
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