The Near Demise of Once-Great Companies

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Issue # - July 2024

To hide mental decline is nearly impossible, unless you’re the boss and have guardians, who are usually family members. I witnessed this with Walter Moehlenpah, owner of MiTek’s predecessor, Hydro-Air Engineering, and I had to leave the company before it nearly collapsed, as did many others. Ultimately, though, the company was saved by a heroic effort. But the near demise of Hydro-Air is a cautionary tale that bears a resemblance to what is happening to the biggest “company” in the world.

I was blessed to work as the Assistant to the President for Mr. Moehlenpah, or Mr. M as everyone called him, beginning in 1977. By that time, Mr. M had built a very profitable worldwide plate and machinery business and a separate hydraulics company. I had previously witnessed the gutsy decisions that enabled that growth. And over the time I worked very closely with Mr. M, I also saw him begin to back away from any decisive action, only to see our competitors, especially Alpine, overtake us through acquisitions. When our U.S. head, Mike Conforti, bought Art DePauw’s saw company, Conforti felt the full wrath of Mr. M, who believed the risk of personal injury by a saw blade was too great. (Since then, Hydro-Air and MiTek have built $200 Million of saws based on Art DePauw’s design).

I did notice that Mr. M was increasingly sequestered in his office with the door closed, and was spending time with his wife, Ardys, who was in the office next to him. He began to travel less, and postponed trips to Hydro-Air companies overseas. However, when the apartheid crisis threatened our South African business, he made the arduous journey there and not only rescued the business, but greatly expanded it. Also, during this period, I witnessed Mr. M winning business through tough personal negotiations with large customers, like National Homes and Ryan Homes. Finally, though, as he seemed to be less engaged in the business, I was asked to move to the engineering group in 1979. On my last day working for him, we met for lunch at his private club and afterwards we both went to the parking garage to depart. I retrieved my car near the top of the garage and when I started driving down the ramp towards the exit, I encountered Mr. M walking down the center of the ramp on a lower level. I stopped and caught up with him, only to find a dazed and confused man who couldn’t find his car. I backtracked with him up the ramp and made sure he got into his car and safely out of the garage, I followed him until he turned toward his home a few miles away. At the time I thought he was acting like any 72-year old man, but I was also shocked by his dissembling.

Over the next three years, Mike Conforti, then my boss, and others left the business. We also lost some major accounts, and Mr. M elevated one of his sons into management of the already rapidly deteriorating business, while still holding onto the reins. Finally, our bank became alarmed by our losses, and a member of the company’s Board of Directors brought in Paul Cornelsen to save the business, and to ease out Mr. M, who by then was suffering noticeably with dementia.

In more recent years, I’ve met with some of the aged founders of the truss businesses who have retired. If they agreed to meet personally with me, they generally turned out to be lucid for our relatively short meetings. However, some family members have later confided in me that their loved one’s faculties were, in fact, severely diminished for much of the time.

Through these sobering experiences, I have realized that an individual afflicted by dementia could be as sharp as a tack during short periods, but severely addled at other times. And I also have noted how loved ones were motivated to conceal this condition. No one wants to see their spouses or relatives look bad, as I found out growing up in a household with two infirm grandparents. And I also learned through my son’s 30-year mental illness, that when the brain begins to malfunction, paranoia and anger can set in, and excessive caution can result. This is clearly not desirable for the leader of any enterprise, especially the largest enterprise in the world.

 

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