Volume 33, Number 8, August 1998

FEATURE:

Sons of the Fathers

by Helen B. Price and Tara Taffera

Hollywood portrays the dream again and again in countless movies: A son is born. Mom and dad gaze into the new baby’s sleeping face and dream of his growing-up years. They foresee a time when the grown son will join dad in the family business. They will get along beautifully, love each other fiercely, work together like hand and glove and maybe even pass on the business to a third generation someday.

Sometimes it really happens that way. For some it’s a bumpy ride, and for others all goes smoothly. But incidents and accidents happen along the way, teaching father and son about life, legal issues, family succession considerations—and all of that is done while they are learning what people need to know about running a successful business. In this issue, we honor the fascinating relationships that develop when fathers and sons work together in the glass industry.

Boyhood Dreams

For some it was a dream held since they could remember.

"I always wanted to work in my dad’s business," Greg Green recalls. He, his father, Lou, and brother, Jeff, operate A-1 Glass Co. in Beaumont, TX. "I don’t think I ever thought too much about it when my boys were young," says Lou Green, the company’s president. "But I really was pleased when both of my sons decided to join the company."

Greg came up through the ranks, working as a glazier’s helper during the summers when he was in school. The next step was glazier and now Greg serves as the company’s vice president. Jeff, who today serves as A-1’s chief executive officer, worked summer and holidays at the company from the time he was 12 years old.

The situation is a similar one for Robert Hartong, II, son of Robert Hartong, CEO of W.A. Wilson & Sons, Inc. in Wheeling, WV, who worked with his father during the summers since he was 15, though there was no pressure from him to do so. But Robert Hartong, II, eventually decided he would like to work with his dad. When he graduated and wanted to start, I gave him the bad news. I told him he would benefit much more by going out into the world, getting knocked around a little bit, and so he went to work for PPG Industries, formerly Pittsburgh Plate Glass, and stayed there for three years," Hartong, Sr., said.

Robert Hartong, II, said his dad was right about saying "no" in the beginning. "I went with PPG to gain a different experience. That way, I had something to bring back to the party," he says. He came on as an executive associate, was involved in sales, and then supervised the company’s insulating glass and auto glass facilities. Today, Hartong, II, serves as president of the company.

The stories are a bit different for three other sets of fathers and sons.

"I always knew I wanted to be self-employed," says Joe Gold, who together with his father Peter, operates Gold Glass Group Corp. in Bohemia, NY. But Joe says he didn’t necessarily think about working with his dad until he had been on his own for awhile and worked as a trader on Wall Street.

Joey Karas, president of Karas and Karas Glass Co. in Boston, MA, never considered working for his father Leo Karas until after graduating from college. "Looking back, it’s amazing how little I thought about working with my father," he said.

Fred Fulton, Jr., was already 19 years old when his dad founded Fulton Windows in Mississauga, ON, Canada. He joined the company at age 23 and today serves as vice president of marketing at the company where his dad is CEO. Fred’s brother, Frank, is the company’s president and operations manager and another brother, Bob, serves as a vice president of sales.

Lines of Authority

In an ideal world, as children grow, a father-son relationship develops wherein dad is the boss and the son learns to respect that authority and do what he is told. But what happens when Junior grows up, Dad grows older, and all of that changes to a boss-employee relationship?

Lou Green must have done something right, because his son Greg says he never had a problem with it. "Dad’s the boss, but he has always given me free reign. Because of that, I let go of the authority-figure idea pretty early on. Of course, it depends on the family system you grow up with," Greg said.

But, that doesn’t mean dissension never occurs. Greg acknowledges that his dad, his brother, Jeff, and he do sometimes disagree. "We all just give our views and talk about what we think, and then the majority rules.

"You have to treat your sons like business partners, not sons. You have to work to remove that father/son feeling and treat them with the same respect you give to your other business associates," Fulton, Sr., recommends. Robert Hartong, II, agrees, "You both have to respect each other and what each brings to the table."

Fred Fulton, Jr., sums it up best by saying, "I have the greatest respect for my dad and what he’s done. And, the better "mapped out" are the roles each one plays, the better it works," he said.

Complementing Personalities

Fathers and sons working together are often separated by many years, but age isn’t the only difference. Different generations have varying ideas and this is an issue fathers and sons must contend with on a daily basis. But, according to these fathers and sons, differing views don’t work as an hindrance; rather, the two individuals complement each other nicely.

Peter Gold claims he is the idea person, and Joe gets the work done. "I’m one-percent inspiration and he’s 99-percent perspiration," he says, acknowledging that Joe Gold does most of the daily work in running the company.

"I’m much more structured, focused and methodical," Joe Gold agrees. "Dad goes in a million different directions. I don’t have as many ideas, but I can take his knowledge and make it work for the company," he explains. When both partners understand and respect each other’s strengths and weaknesses, the partnership reaps the benefits of both.

Robert Hartong, Sr., says while he brings experience and conservatism to the table, his son brings fresh ideas. "You have to be careful not to smother new ideas," said Hartong, Sr., "He gives me plenty of room and lots of freedom to try my ideas," said Hartong, II.

Succession

Although sons may not want to think of the time when their fathers are no longer around, succession of the family business is a serious issue that needs to be addressed in a timely manner. It is important to seek expert advice from lawyers, accountants, tax people, estate planners and others who have knowledge in a variety of areas. But, according to these fathers and sons, succession of the family business is the most pressing legal issue.

Peter Gold feels particularly strong about how to pass on a business. "You have to set up your corporation so it can go on forever, even when you’re gone," he says. For him, that means a trust whereby a certain percentage of the business passes to his son each year.

"You don’t want to just put it in a will—you don’t want to be a father who says, ‘When I die, the business will be yours,’ because that puts the son over a barrel," says Peter Gold. He says the son will be liable for all the taxes on the business, maybe even the building and the ground it sits on. Peter Gold says, in some cases, the taxes could be so high it could sink the business.

Peter Gold is speaking from experience. His dad came from a family business where succession did not work very well. "We learned a lot about what not to do," says Joe. "They didn’t do it right," Peter Gold agrees. So, Peter struck out on his own and founded Gold Glass. And he’s working hard to "do it right" for his son, getting the legal issues in place so that succession can occur seemlessly.

Leo Karas points out, "Anybody who owns a family business has to make estate plans or the business could go under on the day of the owner’s death—the tax laws are that horrendous," he warns. "Also, you have to think, if you have other children that don’t work in the business, what are they going to get, if you give the business to a child that works with you?"

Periodically, Leo Karas brings in a consultant who is not related to the glass industry, asking him to take a look at what they have in place for the future. "One day he said to me, ‘Have you got a Buy/Sell agreement in place?’ I said ‘No,’ and he said, ‘You will have one in place by Monday morning.’ That’s how strong he felt about it and by Monday morning, we had one," says Karas.

Peter Gold feels so strongly about the issue that he advises children of fathers who have not set up succession plans to "cease your employment with him. Go into business for yourself, if you have to, but if the father won’t set up a trust, you really should consider leaving the business."

Another issue that should be considered when planning for succession is spouses. Fathers with the best of intentions should think about what may happen if a son dies and his dads holdings now pass on to his daughter-in-law (or vice versa, if it’s a married daughter).

Joe Gold, who plans to be married soon, says, "My father has asked my fiancée and me to sign a pre- nuptial agreement. It covers only ownership of the business, not my personal estate," he explains. "But without an agreement, if I die or if I ever get divorced, my wife could end up being the one who gives my dad his paycheck," and that is not a situation the family wants to consider.

"Get a lawyer, and transfer the business to your children in a trust," Peter Gold reiterates. Keep the control of your business with the children, not their spouses, because if the child dies, and you’re not dead yet, the spouse could end up telling you what to do with your business."

After devoting most of your life to a business you’ve worked hard to grow, it may be difficult to back away. But, this is easier when you have someone in whom you have confidence to pass the company to.

"At some point, the father has to decide, ‘I’ve got to start giving up my authority, I’ve got to start making some plans for the time when I don’t work here any more,’" says Leo Karas. That’s probably the beginning of "letting go" for most business owners.

Lou Green says he started letting go "once I knew Greg and Jeff were committed to staying in the business." Today, he comes in three or four hours a day and he says the roles have reversed. "When I come in, I ask them, ‘what do you want me to do today?’ A father has to know when to step aside. I know some fathers who are still trying to hold on to authority at their companies and they are ruining their sons—they are ruining a good man," he laments.

"Dad is already in a ‘hands-off’ position," says Jeff Green. "He doesn’t even know the balance in the business checkbook. Jeff says he realized back in June 1986 just how much his dad had come to trust the two brothers. "I remember because I had just come back from my honeymoon and mom and dad had gone on vacation. Then Hurricane Bonnie hit."

Jeff says it took a day to get a telephone call through from his dad, who asked if he should fly home immediately, since devastation was everywhere. "I told him, no, Greg and I had emergency systems in place and everything was going okay. And Dad did not come home. I think he realized he had taught us everything we needed to know and he could step back." At that point, Jeff Green knew he had grown up.

Other fathers have decided to stay with the business for a few more years.

Robert Hartong, II, observes that "My father really enjoys working. I don’t look for him to retire anytime soon—maybe in another three or four years . . . ." His dad agrees. "I’m still having a lot of fun, although it’s good knowing that I could step down. I know I’ll need to get out of the way—maybe in another three-and-a-half years . . . ."

Fred Fulton, Sr., says, "I don’t want to stay on forever, and I am already working differently—I’m not involved on a day-in-day-out basis—I have passed the torch.

"I’ll never retire," Peter Gold insists. He has far too many more ideas in his head to sit in a rocking chair. But, he does spend less time in the business, only about three hours a week at the office. Peter says the rest of the time is spent developing and patenting new inventions for the glass industry.

Even if Peter Gold does work at Gold Glass until the day he dies, he will pass on with the peace and satisfaction of knowing the family business is in capable hands, as will Lou Green, Robert Hartong, Leo Karas and Fred Fulton, Sr.

 

Helen Price is special projects editor for USGlass. She specializes in writing about glass-related topics.

Tara Taffera is the managing editor of USGlass magazine.


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