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Friday October 31, 2014
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Family Feud

 

continued

But the Herricks, personally and through a family trust and the Herrick Foundation, were still the company's biggest stockholders. Within weeks, the foundation sued Tecumseh Products and the three directors who'd voted to kick out Todd. The company in turn filed suit against Todd and Kent Herrick, Todd's sister and his lawyer, and the Herrick Foundation.

The suits were settled with an agreement that the board would not expand to seven members until a permanent CEO was appointed, that one of the anti-Herrick directors would not stand for re-election, and that Todd Herrick would give his voting seat on the board to his son, Kent. (As chairman emeritus, Todd can attend board meetings but not vote.)

If Todd Herrick represented Tecumseh Products' small-town roots, his successor as CEO is a paragon of industrial globalization. Fifty-five-year-old Ed Buker, hired by the company-controlled board in August 2007, has overseen auto quality for Honda's American operations, BMW's new model development in Germany, and American factories for both companies.

In less than two years, Buker has reinvented the company. He sold off the small-engine division and made plans to use the money from the sale to reinvest in Tecumseh's core business: air conditioning compressors. But the Herricks oppose that plan. They want to pursue a "value strategy"-minimizing investment to maximize return to the company's shareholders, chiefly the Herricks themselves. Last year, they asked the company to liquidate their holdings or Tecumseh Products itself.

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