Family
Business Magazine E-Newsletter
January
16, 2007
Contents
1.
Malden Mills to be bought by turnaround firm.
2.
Dale Earnhardt Jr.'s future at family company is uncertain.
3.
Couple praised for 50 years of quality rural journalism.
4.
Can co-presidencies work?
5.
A strategic plan for security.
1. Malden Mills to be bought by
turnaround firm. Malden Mills Industries Inc., a textile
maker in Lawrence, Mass., has filed a second time for Chapter 11
reorganization and has agreed to be bought by Gordon Brothers Group, a
turnaround firm, for $44 million, the Wall
Street Journal reported. After a devastating fire destroyed
company facilities in 1995, third-generation owner Aaron Feuerstein was
widely lauded for paying employees their full salaries for 60 days and
for rebuilding in Massachusetts rather than setting up shop overseas or
in the South, where labor is cheaper. The company, inventor of the
Polartec fabric, first emerged from bankruptcy in 2003. The sale to
Gordon Brothers is subject to bankruptcy court approval, the Journal reported. (Source: Wall Street Journal, Jan. 11, 2007.)
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2. Dale Earnhardt Jr.'s future at
family company is uncertain. NASCAR driver Dale Earnhardt
Jr.'s feud with his stepmother, Teresa, is threatening his future at
the family company, according to an Associated Press report. According
to the article, Earnhardt has not spoken to his stepmother since
mid-December, when she questioned his commitment to winning in a Wall Street Journal interview.
Teresa Earnhardt is considered to be an absentee owner of Dale
Earnhardt Inc., with non-family members running racetrack issues and
global operations, the AP noted. Non-family executives are negotiating
with Dale Jr. and his sister/business manager, Kelly Earnhardt Elledge,
to renew his contract with the team, which expires at the end of this
season. Dale Jr. wants a larger role with the company, the article
reported. "Many believe Dale Earnhardt started the team as something
the children would someday run," the report said, "but Teresa inherited
the business when the elder Earnhardt was killed on the last lap of the
2001 Daytona 500." (Source: Associated Press, Jan. 9, 2007.)
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3. Couple praised for 50 years of
quality rural journalism. On Jan. 1, Tom and Pat Gish
celebrated the 50th anniversary of taking over the Mountain Eagle, a small weekly
newspaper in Whitesburg, Ky. The couple have "survived floods, death
threats, arson and theft" and have fought for the First Amendment, the
Associated Press reported. Al Cross, director of the Institute for
Rural Journalism and Community Issues at the University of Kentucky,
told the AP that the Gishes "have demonstrated more tenacity than
almost any crusading rural newspaper in the country." When they bought
the paper in November 1956, it didn't cover politics or other hard
news, the article said. The Gishes insisted on reporting on the fiscal
court and the local school board, but were shut out of meetings,
resulting in a ten-year battle they eventually won. In response to
their pointed editorials, they faced advertising boycotts and violent
threats; their first building was firebombed in 1974, the AP report
noted. The 7,000-circulation paper has received regional and national
journalism awards. The Gishes, whose son Ben is the Mountain Eagle's editor, say they
intend to keep the paper in the family. Meanwhile. many metropolitan
newspapers are cutting back on coverage of rural areas, the AP article
said. (Source: Associated Press, Dec. 26, 2006.)
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4. Can co-presidencies work?
Family business adviser James E. Barrett of Cresheim Inc. in
Philadelphia writes in The Family
Business Conflict Resolution Handbook that he's often asked by
clients whether a co-presidency arrangement can succeed. His response?
"Yes. And so can bigamy. But neither is recommended in most societies."
He explains that "Like multiple spouses, multiple chiefs foster
undesirable complexities." For business families who are nonetheless
determined to appoint two people with equal authority and veto power,
Barrett offers several suggestions to foster satisfactory outcomes.
Here are three of them:
- Stake out
territories carefully, working to the strengths of each person involved.
- Coach
each of them to be comfortable with the quirks of the other, allowing
room for preferences or error.
- Identify
those who are likely to sow distrust or drive a wedge between the
partners for their own ends. Take preventive action on this and decide
how to monitor it.
For more advice
on preserving harmony in co-presidencies and other family partnerships,
see The Family Business Conflict
Resolution Handbook. Learn more about the book and see the table
of contents here.
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5. A strategic plan for security.
"Most small and mid-sized family businesses I've encountered handle
security in a piecemeal fashion," writes security specialist David W.
Nicastro in the current issue of Family
Business Magazine. But, Nicastro cautions, "An integrated
security plan that covers all the bases is essential to guarantee
family safety, protect business and personal interests, and ensure
peace of mind." He recommends that some key considerations be addressed
in developing a security plan:
- Due diligence: "It is important to
conduct background checks on all prospective employees, business
partners, family hires and anyone else who might have access to
sensitive business and personal information. Proper due diligence goes
well beyond standard reference checks; it includes an examination of
civil and criminal litigation histories, media and other database
reports, and financial records."
- Education and training: "Security
training for family members should include prevention of violence in
the workplace, crisis management and fundamental security guidelines
for business or personal travel.... On the home front, family members
should be trained in basic security practices that minimize risk. These
might include evasive driver training, home security and a general
understanding of how and when problems arise."
- Communication: "Effective
communication among those responsible for business and family security
is essential.... A security director, whether full-time or on contract,
should be considered an executive-level position, so that security is
integrated into all phases of the business."
For more
information, see "Family business security involves home
and office" in the Winter 2007 issue of Family Business Magazine. Visit our website
for subscription information.
With our special Family Subscription
rate, your organization or its clients can receive up to 10
subscriptions for one low price.
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New
Year's Special -- Exclusively for Family Business Magazine E-Newsletter
Subscribers!
What better way
to kick off 2007 than with a special sale on the Family Business Handbook Series, exclusively
for subscribers of this e-newsletter? For the month of January, each
handbook is available to you at a 25% discount -- $71.25 (regular
price: $95), plus postage and handling.
In order to
take advantage of this special offer, check out our Handbook Library here.
BUT PLEASE
DON'T USE THE ONLINE ORDER FORM! (That form lists our regular pricing.)
After you've
decided which handbooks you'd like to order, simply e-mail Barbara
Wenger at bwenger@familybusinessmagazine.com
with the titles. Barbara will work with you on billing and shipping.
We hope this
special discount will allow you to add to your growing collection of Family Business Handbooks.
Happy New Year
from the team at Family Business
Magazine!
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