Chainsaw Repair

Part 8

In 1987, although he remained the board's chairperson, Winton Blount decided to decrease the time he spent in managing the day-to-day operations of the company. He promoted his son, Winton Blount III, to the position of vice-chairperson and gave him the primary responsibility of supervising the company's construction business. Having previously been the head of Blount's international construction operations, Winton Blount III seemed a natural choice. Yet from the very beginning of the younger Blount's tenure, the company's performance began to suffer. Washington Steel Corporation was sold off, in spite of its turning a profit during one of the most difficult periods in the steel industry. A $100 million, 80 megawatts cogeneration project located in Pennsylvania landed in court following a dispute between Blount and Schuykill Energy Resources. Problems with the company's handling of a $150 million office complex for AT&T in Chicago also gave rise to litigation. Other construction projects in which the company lost control or entered into contract terms that were unfavorable led to declining revenues and profitability. The younger Blount was asked to vacate his position as vice-chairperson, and his father returned to turn the company around. By the end of fiscal 1990, however, revenues had dropped from over $1 billion to $683 million; revenues for the construction operations alone declined from over $600 million to $348 million.

The early 1990s were a period of disruption and realignment for the company. William R. Van Sant, president and chief executive officer of Blount from December 1990 to October 1992, suddenly resigned, creating a large gap in management. Van Sant had helped the company shift its focus to a more diversified mixture of manufacturing equipment and construction operations. John M. Panettiere, a management expert with considerable experience in the auto industry, was appointed president and chief operating officer, and he immediately began to help Winton Blount iron out the company's problems.