Battle for control under way at Tecumseh Products in Michigan
3/1/2007TECUMSEH In an apparent fight for control of one of the region s most important corporations, Tecumseh Products Co. said today said it has replaced Chairman Todd Herrick and will expand the board.
David Risley, a board member since 2003, was elected non-executive chairman at a meeting of the current five-member board on Wednesday at company headquarters.
The move was revealed, after the stock market closed, in a statement issued by the Lenawee County company, which is among the world s largest producers of refrigeration compressors and small engines for lawn mowers and snow blowers. It has annual sales of nearly $2 billion.
Mr. Herrick, 63, couldn t be reached for comment.
The board action was in response to a move by Mr. Herrick, the firm s former chief executive and grandson of the founder, to nominate himself and two other men to replace current directors.
The statement said Mr. Herrick, whose family owns 47 percent of voting stock through the nonprofit Herrick Foundation and a family trust, notified current company officials on Feb. 20 that he planned to nominate Raymond Gunn and Steven Lebowski at the firm s annual shareholders meeting April 25.
Their election would have given Mr. Herrick a voting majority.
But, with the expansion of the board from five to seven members, current directors will maintain control with the election of their slate of four. The fifth director is Mr. Herrick, whom the current board will not nominate for re-election.
The statement said the board expansion will take place immediately prior to the election of directors at the company s next annual meeting
Under company bylaws, the deadline for shareholders to nominate directors was Feb. 25, company spokesman Roy Winnick said.
The board s nominees are Mr. Risley, 62, who is retired finance chief of La-Z-Boy Inc.; Peter Banks, general partner of investment group Red Planet Capital Partners; Albert Koch, a managing director of AlixPartners LP, and Kevin Sheehan, retired official of investment firm CID Capital.
The company spokesman said the board took the action to ensure continuation of a turnaround plan at the financially struggling firm.
Mr. Winnick said the turnaround is urgently needed if Tecumseh is to properly position itself for long-term strength and success.
On Jan. 19, the company issued a terse statement announcing the departure of Mr. Herrick, 63, and his son Kent Herrick, a former executive vice president.
It named James Bonsall, a consultant at turnaround specialist AlixPartners, acting president and chief operating officer.
The firm last week said it was delaying the previously scheduled release of fourth quarter and full-year 2006 financial results until it makes a required U.S. securities regulatory filing on the subject.
Contact Gary T. Pakulski at:
gpakulski@theblade.com
or 419-724-6082.
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