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CEO Gingo is expecting little or no growth in year. Party, other frills dropped
By Jim Mackinnon
Beacon Journal business writer
Published on Friday, Dec 19, 2008
Given the uncertain state of the reeling U.S. and global economies, the head of polymer company A. Schulman Inc. isn't expecting revenue to grow in 2009.
Joe Gingo, chairman, president and chief executive officer of the Fairlawn company, gave a mostly upbeat assessment of the company's prospects at the annual shareholders' meeting Thursday at the Fairlawn Hilton.
A. Schulman, which specializes in making plastic compounds and resins, is in sound financial shape, he said.
The company has more than 2,000 employees at 16 locations around the globe, and reported record annual revenue of $2 billion in October.
Even so, Schulman earlier this month announced it expects to earn less money than originally projected in fiscal 2009 and as a result needed 60 layoffs, including nine people at its headquarters, and production line closings in North America. There will be additional job losses at its non-U.S. facilities.
Gingo said the company needs the painful cuts in jobs and production to weather whatever economic turmoil lies ahead.
''I don't think the focus next year can be revenue growth,'' Gingo said after the half-hour-long shareholders' meeting. ''This is a year for really controlling your costs and generating cash. I think liquidity is going to be the critical issue as you go forward, and that's my focus.''
But Schulman executives will look at any other opportunities that come up and will be introducing new products, Gingo said.
Along the way, a strategic committee will continue to meet to
decide if Schulman should be sold, merged or make a major acquisition, he said.
''I would say we're actively looking at all three opportunities,'' Gingo said. ''In this environment, I don't know how I can handicap that. I'd say they're all on the table.''
The company also continues to seek a strategic partner to form a joint venture for its Invision plastic sheeting division, he said.
Shareholders approved the annual election of directors instead of having board members serve staggered three-year terms and eliminated a ''supermajority'' voting restriction needed to make amendments.
The only person to speak during the morning meeting's question-and-answer session wanted to know why there were no gifts for shareholders who attended the meeting as had been past practice.
Gingo said under the present economic circumstances, gifts would not be appropriate.
In light of the layoffs and other changes needed to cut costs, he said he made the decision to cancel the company Christmas party in addition to not making gifts available at the annual meeting.
''You have to send a message,'' Gingo said.
Eliminating the gifts saved Schulman $2,000, he said.
But the people who are among the layoffs lost more, he said.
''You know, that guy lost a job. I didn't give him any gifts. I gave the shareholder a gift, I reduced the cost-basis of this company,'' Gingo said. ''You didn't lay off a person, you deprived income to a family. I think you're pretty heartless if it doesn't bother you.''
Gingo said decisions to lay off people are the ones that bother him the most. ''Yet at the same time, you have to make it.''
The choice can come down to whether to have layoffs now or face closing down the company in a year, he said. ''I don't want to sound crass about it, but you do what you got to do.''
Schulman will continue to find ways to reduce reliance on the automotive industry while growing other parts of its business, particularly the segment known as masterbatch.
His goal is to bring the company back to be a very profitable, viable corporation, he said.
''I think we've taken steps, I think our numbers show that,'' Gingo said. ''I think we're going to face an unbelievably difficult economic environment as we go forth in '09. I hope it doesn't last beyond that.''
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
Given the uncertain state of the reeling U.S. and global economies, the head of polymer company A. Schulman Inc. isn't expecting revenue to grow in 2009.
Get the full article here.
Comments
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Akron, Oh
Posted 09:41 AM, 12/19/2008
Doesn't he look like Robin Williams?
Posted 11:32 AM, 12/19/2008
I liked your article on Schulman and Joe Gingo. I Joe Gingo has good old North Hill middle class Italian roots. I grew up on the same street as Joe. He is older than I am but I knew his mom and dad. Joe is a wonderful human being. I think the article you wrote reflects Joe’s Italian middle class values handed down to him by his parents. I think his dad worked at Goodyear and retired from there. Their house and yard were always impeccably pointed with flowers and a garden (thanks to Joe’s grandfather Nonnu (sic). His grandpa couldn’t speak much English but boy could that bow-legged guy chase out of his neighbor’s (the Livigni family) out of that treeas we were eating out of the most deliccious pear tree in the neighborhood.
Joe is a class act. Joe was instrumental in keeping Goodyear in Akron. His comments in your article show a person who is committed to strong values and concern for the families he employs at Schulman. When my mother died, Joe’s mom was the first one there to drop off a food plate for the family. They were a good family and Joe’s success is derived from his parents. I was also their ABJ paper boy for the family for several years along with my twin brother. There is a saying on North Hill, “You can take the boy out of North Hill but you can’t take the North Hill out of the boy”. Joe’s responses in your article gives insight into the man and harkens back to the social values that were (and are) exhibited by the Italians who located on the Hill, albeit the diaspora of Italians to the suburbs has diminished the uniqueness of the Hill.
We need more Joe Gingo's and less Madoff's in this world. Again, thanks for the article Jim Mackinnon.
This Place, 32
Posted 02:49 PM, 12/19/2008
Madoff is just a misunderstanding.
Yeah, that's all.
