Oak Industries to Move From S.D. to Boston
Oak Industries plans to sell its only remaining business in California and move its headquarters to Boston, William Weaver, Oak’s chief financial officer, said Tuesday. Oak’s departure, which is planned for this summer, would further deplete the ranks of corporations with headquarters in San Diego.
Oak’s communications division has about 40 employees in San Diego. Its corporate staff was recently trimmed to 24 from about 35.
The Tuesday announcements evidently ended a tumultuous chapter in Oak’s history that included a bitter proxy fight won by a dissident group of shareholders that included former SEC Chairman Roderick M. Hills and former U.S. Atty. Gen. Elliott L. Richardson.
The dissident group last June wrested control from a management team headed by Oak Chairman E. L. McNeely, a former Wickes Cos. executive. McNeely has been credited with turning around Oak, a high-flying media conglomerate that stumbled badly during the early 1980s and generated $300 million in net losses before his arrival in 1984.
Under McNeely’s leadership, Oak generated several quarterly profits. But Hills’ group maintained that the profits were illusory because they were driven by one-time gains rather than operating profits. In proxy materials distributed last year, the group told Oak shareholders that McNeely’s management team lacked the industrial experience needed to generate operating profits.
The Hills group’s proxy materials also argued that Oak’s future was tied to its electronic components businesses, not a communications business that manufactures encoding and decoding devices used by cable TV systems.
Oak on Tuesday said it hopes to sell the communications business, which has plants in San Diego and Taiwan. When the sale is complete, Oak will move its corporate headquarters to Boston.
“Without communications, there’s nothing west of the Mississippi,” Weaver said. “That makes communications and travel (from San Diego) difficult and expensive.”
Oak reported an $8.3-million net loss for the nine months ended Sept. 30. Oak reported a $7.8-million net profit during the like quarter a year earlier, which included $9.2 million in non-recurring items. Sales for the nine months fell slightly to $146.7 million, down from $147.9 million a year earlier.
Hills, who joined Oak’s board of directors at McNeely’s bidding in 1985, initiated the bitter proxy fight last March after learning that he had not been invited to return for another term.
“I could have simply resigned from the board, but that would mean abandoning the shareholders at a critical junction in Oak’s history,” Hills said early in 1989.
