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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

"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