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A new Arch Aluminum: Q&A with Jeff Leone

Post Time:Aug 30,2010Classify:Industry NewsView:161

The new CEO of Arch Aluminum and Glass LLC, Tamarac, Fla., discusses how the company has changed since emerging from bankruptcy, and the top agenda items for management.

How has Arch changed as a company from pre-bankruptcy to post-bankruptcy?

Arch was a family-run organization. It grew up from infancy, got into financial distress, and had to go into bankruptcy. Sun Capital Partners, [Boca Raton, Fla.],came in and bought them, keeping the same name. What Sun does for companies like Arch is to search for, and put into place, a new leadership team. ... I came in, and they brought in a new director of operations, Suresh Kumar. (Read the personnel announcementsfor Leone and Kumar.) We still have more leadership positions to fill.

After a bankruptcy, the top priority is getting people back in focus. Employees had the distress before the bankruptcy, and then dealt with the after effects. We are making sure everyone is calming down, and that we're able to get back to work. Things have been remarkably good in the first 30 days, seeing how quickly things are turning around.

There hasn't been any other major shift—a site closing or anything like that. We're still tuning, but the majority of the hard work is done. ... The market is going to change, and we want to be ready to deal with this market, but all of us are guessing about when it will change. It seems like it's going to be later than we all expected. When things do improve, we want to make sure we have everything humming.

How did the personnel changes fit into management's overall plan for the company?

In this business, relationships with the large general contractors and architects are very important. This was an area that Arch was not participating in. [Mapei Corp., with U.S. headquarters in Deerfield Beach, Fla.], where I was [director of strategic marketing], was quite strong in that area—strong in business processes that dealt with architects. With our new team in place, we're going to be building that area—building communication of our production line, professionalizing external communication.

When you look at the personnel changes, and the overall head count, turnover was very little. Personnel in key positions had to be replaced—or had extended offers—but two layers down, we didn't lose many people. Certainly by the time Arch hits 2011, we'll be tuned and trimmed up.

What are you hearing from your employees and customers?

People were nervous [throughout this process], so we have to be over-communicating now. ... All of us want to be working on a winning team, a team that we can be proud of. During bankruptcy, it was all thrown off the truck, and people are anxious to get back at it.

We also sent out 2,000 letters to customers and suppliers, and I've had remarkable feedback on that letter. Arch was a good company in terms of quality. In the last 18 months, the direction was lost, and customers didn't know if they could rely on us. We need to prove now that we can live up to expectations.

Can you give a description of Arch's acquisition plans?

Sun Capital is a very well runprivate equity firm, and their business model is fine tuned. They know how to get a company turned around, and have a whole set of resources to tap, such as logistics experts and inventory experts. If we tell them the market is ripe for acquisitions, they'll go for it, looking at the fabrication industry in the United States and in Canada. This would be the right time for acquisitions, and we're looking for the right logistical fit—for example, a company in an area where we might need a site. We're looking for companies with quality customer service, and are even looking to explore some larger fabricators. ... If it happens, it happens.

What does the next year hold for Arch?

The economy is not going to help anyone in the industry for the next 12 months. We have to make sure we're smarter with the resources we've got. ... We're aiming for operational excellence, working on internal processes to make them the most efficient. We're investing in people and processes. When the market picks up, we'll be ready for it.

What are the three most important items on your agenda for the company?

We can't underestimate customer service. We need to be even better on customer service. The "on time, on spec, on cost" mantra should be in every body's blood. We have to get it right. We need to work on our relationship with architects. We need to get linked to architectural firms and general contractors across the country. We need to improve the tools we have available to communicate. People are moving away from print, and the company has to transform.

How does your background prepare you for heading Arch?

I'm a chemical guy by trade. I've been in technical roles and involved in the technical side of building. ... I worked servicing the automotive business on the chemical side, a pretty demanding business. When you're dealing with customers like Toyota, Honda and BMW, you have to have your act together, and have to be on time and on spec. So, I'm used to running a reliable business. My experience at Mapei is certainly applicable to my position here. I was dealing with the same size contractors in the same size buildings, just a different part. I understand the needs of those contractors very well.

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