Peter Churm Steps Down as Furon Chairman, CEO
Peter Churm, chairman and chief executive of Furon Co., a manufacturer of Teflon products and other industrial materials, said Tuesday that he has retired and been succeeded by President J. Michael Hagan.
Churm, 65, whose breezy writing style enlivened the company’s annual reports to stockholders, will remain a director and take the title of chairman emeritus. Years ago, Furon instituted a policy mandating that executives retire at age 65. Churm, who turned 65 in February, said Tuesday that while he doesn’t “like the change personally,” he will abide by it.
Churm is credited with helping build the company from a $600,000-a-year supplier to the aerospace industry to a $330-million company with hundreds of customers in diverse industries, although lately it has seen profits and sales slip as its customers, mostly manufacturers, were buffeted by the recession.
“They’re selling right into industrial America, and that part of the economy is hurting right now,” said Joseph Buckley, an analyst at the Bear Stearns & Co. securities firm in New York.
But the long-term outlook for the Laguna Niguel company is still good, said Buckley, whose company makes a market in Furon stock.
Churm, a Midwesterner from Wisconsin, has been with Furon since 1958, three years after the company was founded. A graduate of Miami University in Ohio, he served with the Marine Corps in World War II and the Army in the Korean War.
As president of Furon for 17 years in the 1960s and 1970s, Churm instituted a four-day workweek for two-thirds of the company’s 2,900 employees, who get Fridays off.
“The main reason we liked it was because it seemed like a good recruiting tool,” Churm said.
Although he made $400,000 in salary last year, Churm has not had a personal secretary for 25 years, and has been known to answer letters by making a copy, writing his response on the copy and sending it back to the writer.
He also rarely wore a suit and often not even a sport coat. “This is a shirt-sleeves kind of place,” he said. “Unless you have fun at work, there’s really no sense in doing it.”
True to habit, Churm wore not a suit but a blue blazer, gray slacks and striped tie to the shareholders’ meeting Tuesday, where his retirement--long expected--was formally announced.
Hagan, 51, the new chairman, was Churm’s choice for the job. He joined the company in 1967 and has been president since 1980. He has taken a higher profile in community relations than the more retiring Churm.
But if there are differences in personal style, there aren’t any acknowledged differences over the way the company should be run.
“Peter and I worked together a number of years,” Hagan said. “We have the same basic goals.”
Terrence A. Noonan, 53, who came aboard in 1987 through an acquisition, will move up from executive vice president to president.
Furon was founded in Fullerton in 1955 as a pioneering supplier of Teflon seals for rocket-engine makers and other aerospace companies. A few years later, when Churm joined the firm, it had 20 employees and sales of $600,000 a year. Sales have since grown to $327 million.
Furon makes everything from seals for space shuttles to 3,000-foot tubes that stretch from offshore oil platforms to equipment on the ocean floor. Many of the high-performance parts and components the company produces are custom-made from rubber compounds and sophisticated plastics. Furon sells to as wide a market as possible to offset downturns in individual industries.
In 1989, the company spent $86 million to acquire a Teflon-processing company, an industrial tape manufacturer and a maker of Teflon tubing. The acquisitions more than doubled the company’s long-term debt, to a hefty $152 million.
Since then, however, Furon has pared its debt and spruced up its balance sheet by selling subsidiaries, selling and then leasing back factories, and redeeming debentures.
Also in 1989, the company changed its name from The Fluorocarbon Co. to Furon after holding a widely publicized contest to come up with a new name. (The old one linked the company too closely with the ozone-damaging chlorofluorocarbons, which Furon does not make.)
The company offered 100 shares for the best suggestion, and thousands of responses poured in, including Fluoroluralura and Churminators Inc., some of them written on cocktail napkins. Among the eight winners who all suggested “Fluron”--the company dropped the “l”--was wealthy Laguna Niguel developer Ron Birtcher. The name change was typical of Churm’s light-hearted management style.
Now, however, the recession means things don’t seem quite so amusing at the company’s headquarters. For its fiscal year ended Feb. 2, the company reported earnings of $9.1 million, down 11% from $10.2 million the prior year. Sales dropped slightly to $326.9 million, from $332.2 million the year before.
The company’s first quarter continued weak as the company reported lower sales and earnings.
But, said analyst Buckley, while Bear Stearns has dropped Furon from its list of recommended stocks, he expects the company’s performance to improve after the recession ends.
As for Churm, he will spend two days a week or so still working at the company, advising the new chairman on matters from public relations to acquisitions. As in the past, there will be more acquisitions, he said Tuesday. But they’re at least a year down the road.
Change at the Top for Furon Peter Churm has retired as chairman of Furon Corp. after more than 32 years with the company. During his tenure, the firm’s sales grew from $600,000 annually to more than $300 million. His handpicked successor is J. Michael Hagan, who has been company president since 1980.
Year ends in February
(in millions) 1990 1989 1988 1987 1986 1985 Revenue $326.9 $332.2 $249.8 $174.5 $97.8 $104 Net income $9.1 $10.2 $9.9 $4.4 $4.0 $6.1
Number of employees: 2,900
Shares outstanding: 8.4 million
52-week price range: $19-$8.50
Tuesday’s close: $13.75
