Volume 45, Issue 9 - September 2010

Issue@Hand

Arch-etypal CEO

 

Arch Aluminum has a new CEO, Jeff Leone, who brings with him an impressive international business pedigree. His 27-year professional trajectory includes stints at BASF/Basell (where he helped establish its automotive business in China), MAPEI (where he served as director of strategic marketing) and, most recently, at Arch’s owner Sun Capital Partners Inc.

Despite the turbulence since Arch declared and then emerged from bankruptcy a few months ago, Leone says that he’s very optimistic about the fabricator’s future. “The more I look at the fundamentals, the more I see it’s a good company,” he says. I caught up with Leone in late August to ask him about his new role with Arch. The following are some excerpts from our conversation. You can read the whole interview online on my August 30, 2010 blog at http://deblog.usglassmag.com.

Q—So how is the Arch make-over going so far?
A—Good. We are on track to hit the financial goals we outlined in the acquisition and we’ve been able to do so even though demand is down by double-digits.


Q—A lot of people were concerned that there’d be a “slash and cut” strategy under Sun. How have you worked to allay those fears?
A—We said right at the beginning that we needed to “right-size,” not “down-size.” And we’ve had to do a few things to make that happen. First, we had to get everyone prepared mentally—our employees, our customers and our vendors. Then we had to create a sensible cost structure. That did involve some painful, but necessary, decisions … People have been giving us room to improve. Now our goal is to create delighted customers. We truly want to delight our customers with our products and our service.

Q—That’s quite a different philosophy than the “old Arch” often was accused of having.
A—I know. I recently sent out a letter of introduction to more than 2,000 Arch customers and I said, candidly, that the company had lost its focus but, believe me, we are focused now.

Q—Arch always had a very decentralized management style. Individual plants were often considered fiefdoms. Do you see that degree of autonomy continuing?
A—First let me say that there are very good parts of that model. Having branches accountable for their own P&Ls is a good thing. Secondly, some of these branch managers are among the most talented and hardest-working operators we have at Arch. So we don’t want to destroy that. We want to stitch over it, if you will, with a light hand. That being said, we do have centralized credit and we will centralize some other functions that it makes sense to centralize. We are striving for a bit more consistency and more professionalism than we had in the past.

Q—Arch was such a well-known family-owned company with lots of family members employed. I would imagine making changes to that dynamic has been challenging …

A—The familial model can be a very strong one. I saw that during my time at MAPEI. It has definite good parts and we want to keep those. What we want to do, in addition, is create an atmosphere of trust for the employees and an atmosphere with strong values that the employees want to emulate. You have to build that over time.

We also need to become more consistent and professional. So we are putting in things like HR policies, codes of conduct and standards. We want to be as professional as a DuPont or a BASF. —Deb


USG
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