Autobiography - RO acquisition by RPM

When last we met I had just transferred from the International business back to be the Director of Industrial Marketing. Len Judy’s golden boy Dave Doray was gone as was Ron Moran. Jim O’Malley and I had a clean slate to grow the industrial business. Jim and I got along like long lost brothers. We were both very happy to have the opportunity. The challenge was motivating the regional managers and sales team. They had no direction or innovation for several years.

In the background, Don Fergusson had decided to sell the company. He had battled with Len Judy and the family to try to change the culture. Len had turned some family members against Don but in the end Don convinced enough family members that selling the company was in their best interest. Overnight our focus changed from growing the business to improving profitability to increase the operating income to get higher multiples from the acquisition. Don put all the management team on bonus program. It was imperative to show constancy of the management team. He didn’t want to have a mass exodus of top talent. Thanks to Don’s generosity I earned a bonus large enough to pay for Alison’s tuition to Boston College.

Each department put together a presentation for the potential buyers. The focus of my presentation was “I am smart and key to future success of this business.” We would put on a dog and pony show for all the potential suitors. In the end RO was acquired by RPM. The Sullivan family bought RO from the Fergusson family. Tom Sullivan documented the negotiation process. Don asked a private detective Anthony (the Pelican) Pelicano to help with the negotiation. The Pelican came into the RO picture way back in 1974 when the RO factory was set on fire. He was hired to find out who was the arsonist. He must have done a good job because the case was dropped. The speculation is a family member was involved. The next case for the Pelican was to find Rex Reade’s hippie daughter who disappeared. Rex was the president of RO at the time. The Pelican tracked Rex’s daughter to a shallow grave on a farm on Maui. Rex’s wife went insane and years later Rex divorced his wife and married his secretary.

During the negotiation with RPM in 1992 the Pelican wanted to strike fear into Tom Sullivan’s heart. He said I can kill a man with a pencil. Tom Sullivan wrote in his memoir - “note to self - do not bring a pencil to meetings with the Pelican.” At the end Don and Tom were only $1 million apart on the deal. Tom called his limo and the RPM negotiation team walked out. Just as the limo was pulling out Don stopped him and said I can’t believe you would walk away from this opportunity over $1 million. Tom’s response was to say I can’t believe you walked away from $75 million. They did the deal and RO grew to $1.4 billion. RPM was ecstatic and Don was very happy and never looked back. The real winner was Don because he met his future wife Stacey while she was working for the Pelican. They married and have a son Quinn. Priscilla and I had an opportunity to visit Don and his family in Santa Barbara in 2019. They have a mansion overlooking the Pacific and we went on an overnight cruise on their sailboat to the Channel Islands. They recently built a fishing lodge in Nelson, New Zealand called Falcon Brae. We can’t wait to visit them there.

Everything changed with the new RPM management. They brought in a blue collar salesman, Mike Tellor, as president. He came from the Carboline industrial coatings business in St Louis. The mandate from RPM was revolutionary. Grow the business any way you can. The Fergusson family had been very traditional and didn’t want to deviate from rust preventive coatings. Len Judy’s massive failures only reinforced their fears. Mike was enamored with the RO consumer business and left the industrial business alone for several years. He had amazing luck and timing because Rust-Oleum had just become a key supplier to Home Depot, Lowe’s and Menards as those businesses started their meteoric rise. He rode that horse for his entire career at RO and was a heroes hero for his bosses at RPM.

When RPM was in the process of acquiring RO, I was at an eight week executive training program at the Kellogg School of Management at Northwestern University. I asked Bud Bartelt if I should drop out and return to the office when the new president arrived. He said don’t worry, if things don’t work out the Kellogg program will look good on your resume.

Part of the agreement with RPM was that RO would terminate the President Len Judy and almost all the Vice Presidents and some middle managers the day prior to the acquisition. This eliminated millions in excess overhead. Only Bud Bartelt survived. I heard about the blood bath while I was at Northwestern. The intel was that there was one more head to be chopped but that person was out of the office. I called Bud and he told me it was not me.

In the early days of the internet I approached Mike Tellor with a recommendation that RO should have a website. He told me it was a stupid idea that had no use for business. It was just a toy. My son JP and I were driving home on a Saturday morning after our breakfast club breakfast. We had breakfast together every Saturday for years. This is the 1980’s and we talked about the internet and how we could make money from the internet. We heard that websites were the up and coming thing. We decided to go to the Barnes and Noble bookstore and bought a book on “How to Create a Website.” We decided to have a competition on who could create the best website. We learned to code in FORTRAN. Of course JP rocked the competition and crushed me. I told Mike I would fund the website development from my budget and would not request any additional funds from him. He grudgingly agreed. JP was Rust-Oleum’s first webmaster. We secured the website addresses Rustoleum.com and Rust-Oleum.com in 1988 and developed websites for the international and industrial businesses. Guess what? Soon after we developed those websites the consumer group piled on and decided a website might be a good business strategy. JP became a consultant for Rust-Oleum while in high school and reported to the Information Systems department.

I also hired my daughter Alison to work for Rust-Oleum. She was the first person to come to RO on “Take your daughter to work day.” Eventually it became a major annual event. She was hired as RO’s first summer intern. She worked for me in the industrial business. After the first year the Human Resources department created the Alison amendment and decided an intern could not report a family member. The following summer she reported to my Administrative Assistant Bonnie Baer. In her senior high school summer she worked for the president of WW Grainger. Both of my children had an impressive resume by the time they graduated high school.

Mike was an interesting boss. He had the ability to drink 6-8 Chevis Regal’s a night and have crystal clear memories in the morning. Several associates made the mistake of assuming they could confide in Mike when he was hammered but no mater how much he drank he was never hammered. He also would attack any one that looked at him in a meeting. He would pick some obscure issue and pound it and pound it until his victim caved in. I quickly learned to find some blemish on the board room table to stare at for the entire meeting and not look up.

One of my marketing strategies was to have travel contests for my industrial distributors. If they achieved certain sales goals they earned a trip for the owner and their wife. We held a contest to win a trip to the Mardi Gras. It was a magical event. We rented a mansion on the parade route and had a jazz band and catered meals. Everyone wants to go to Mardi Gras but it might seem a little intimidating to book a hotel room a year in advance and know where to go safely as well get restaurant reservations. I took all the drama out by using an event planning company.

The following year I upped the adventure level to a Caribbean cruise. The challenge was to get the distributors to buy enough over and above their base sales goal to pay for the cost of the trip. What I had not considered is that many distributors had loaded up the previous year to win the Mardi Gras trip. There were many distributors attempting to win the cruise but an equal number were falling behind their quota. The outlook was my sales would be close to the prior year number but I had to cover an additional $340,000 to take 42 people on a Caribbean cruise. This was life and death. Mike would not accept my business not achieving the operating income goal. As I accrued for the cruise I noticed my business was not showing a loss. I asked my business group accountant what was going on? She said she changed the way she accounted for my literature. Instead of changing my business for the literature when it was printed she charged me when it was used. This shifted the cost out 6 - 9 months. I funded the cruise and hit my operating income goal. Mike never had a clue. That bullet barely missed me. I survived numerous close calls during my 42 years. I pictured my career as being Keanu Reeves in the movie the Matrix. He could slow time down and dodge a barrage of bullets fired directly at him. I used that theme in one of my national sales meetings using dry ice smoke and flashing lights.

The cruise was a drama in its own right. We had a new National Sales Manager John Wolf. He was 29 years old and had never held a management position or had any one report to him. He was the obvious top choice for National Sales Manager for Mike Tellor. He was tall and told Mike a story about deer hunting. John had a deer ticket that expired on Sunday. On Saturday night he walked into the woods in the rain and sat in his tree stand until his deer tag expired. Never saw a deer.

John was new to managing people. He had a rag tag band of regional managers. One of the more bizarre associates was Dominic Jordan the regional manager in Atlanta. Dominic’s family name was Dijordano. His father had turned states evidence on the NY mob and was in witness protection in Corpus Christi, Texas. They opened an Italian restaurant. Dominic was married and he and his wife were invited to attend the distributor cruise. Dominic called his new boss John Wolf and said he and his wife were recently separated and he wanted to bring his new girl friend on the cruise. John asked me what I recommended. I said I will get back to you. I called two of the other regional managers and they confirmed Dominic’s girlfriend was a stripper. I told John it would be best if she did not come on the cruise. We had our top distributors and their wives in attendance. John told Dominic to bring her. She was everything you would expect in her string bikini. On the last day of the cruise Dominic called me as we were getting off the ship. He said his girlfriend left him and moved into the crews quarters two days ago and she needed to get off the boat. I said don’t worry, the crew will show her the way off the boat. There she was standing on the dock as we departed. John had only been the national sales manager for a few weeks. He was smart enough to ask my opinion but not smart enough to accept my opinion.

A year later we had a sales meeting at Disney World. John Wolf wanted to set an example for his team. He sent out a memo warning that any salesman that was inebriated or late for the sales meeting would be fired on the spot. On the second night of the sales meeting John went out drinking and dancing with Morticia Addams from the Human Resources department. A few of us tagged along. John was pounding the drinks all night. I left early and arrived at the meeting early as usual. It was a day with breakout sessions so John only had to provide the instructions on who would be where for what presentation. It was 7:55 am and no John. Then it was 8:00 am and no John. I could have sat in my seat and let it play out. I got up and went on stage. I made the morning announcements and sent the troops on their way. A few moments later John’s Administrative Assistant came to me with the head of security for the hotel. I am not making this up. The head of security for the Disney Hotel told me that John Wolf had committed suicide as was in his room covered in blood. I followed him to John’s room. The door was partially open and held by the chain. The maid had tried to open the door but could not because of the chain. She could see John laying on the floor covered in sheets that were dark red as blood. She pounded on the door and yelled but he did not move. She called security. I could see John in the room. He looked dead. Security cut the door chain with a bolt cutter. The head of security came back and said John was alive. John had come back to his room and drank all the red wine in his mini bar. Then he vomited all the red wine on his sheets and fell out of bed. At 11:55 am John showed up at the meeting with his hair still wet. Mike Tellor asked John why he was late? John said he was in his room writing his speach for the awards banquet. I just smiled.

A year later I was advised John Wolf would be terminated. A few days prior to his termination John told me had resigned. If John had waited two more days to be terminated he would have received a generous severance package. Who quits on a Wednesday? Oh well.