O-I's top exec to have stomach tumor removed

7/28/2006

The top executive of Toledo's second largest corporation has a cancerous stomach tumor and is to have it removed in about 10 days.

Owens-Illinois Inc. yesterday announced the ailment of Steve McCracken, chairman and chief executive officer, explaining that the small tumor was discovered in its early stages and that his recovery is expected to take about eight weeks.

"After the initial shock two weeks ago, all the subsequent news has been positive," Mr. McCracken told industry analysts yesterday in a conference call about the firm's financial performance in the spring.

He expects to make a complete recovery.

Mr. McCracken is the third CEO of a Toledo Fortune 500 firm to be hospitalized with a serious health condition in the last 15 years.

Joseph Magliochetti, chairman and CEO of Dana Corp., died in September, 2003, just two weeks after he was hospitalized for what turned out to be pancreatitis, or inflammation of the pancreas. He was 61. He led the company for four years.

Max Weber, chairman and CEO of Owens Corning, underwent surgery for cancer twice in 1991, just weeks after he took the top job. He retired that year because of health problems and died less than two years later, at age 63.

Mr. McCracken, 53, who took over the helm of O-I in early 2004, will have his surgery at the Cleveland Clinic in about 10 days. James Baehren, O-I senior vice president and chief legal counsel, will take on ad-ditional leadership duties at the firm in Mr. McCracken's absence.

Carol Gee, spokesman for the world's largest bottle maker, said, "We're very encouraged by the positive news coming from the surgeons at Cleveland Clinic."

She said the malignancy - a small tumor at the junction of the esophagus and stomach - was detected early, and "no surrounding tissue was affected."

The CEO was bothered by difficulty in swallowing, "almost like heartburn," and had an endoscopy done July 13 in Toledo, Ms. Gee said. After the possible malignancy was detected, his doctors urged him to go to the Cleveland Clinic and received the cancer diagnosis Wednesday, she added.

Mr. McCracken, a former executive with chemical giant DuPont, was hired to replace longtime CEO Joseph Lemieux, who retired at the end of 1993 after 46 years with O-I. The new leader lives in Ottawa Hills with his wife Judy and their four children.

New York investment firm Kohlberg Kravis Roberts & Co. has dumped its hefty stock position in O-I and the local firm has bought a major glass-container maker in Europe during Mr. McCracken's tenure.

Last year, in an announcement that stunned Toledo, the company said it would move its world headquarters from One SeaGate in downtown Toledo to a new $20 million facility in Levis Development Park in Perrysburg. The move, O-I's first outside the city, is to be completed in about a month.

The company has struggled financially. It had revenue of $7.2 billion last year but lost $559 million, mostly because of accounting charges. Profits were down in each quarter this year, the latest announced this week showing profit slumped 51 percent for the most recent quarter.

Mr. McCracken told analysts he believes the firm has "a lot of potential to improve," is becoming more team oriented, and is planning on growth again.

Its stock has suffered in recent weeks and closed yesterday at $14.60 a share, down 76 cents, near its low for the past year on the New York Stock Exchange.

The stock price drop, Ms. Gee said, probably resulted from the earnings report and Mr. McCracken's surgery.

"It has been a tough week," she said.

Contact Homer Brickey at:

homerbrickey@theblade.com

or 419-724-6129.