Dennis K. Pawley Resigns as Chairman and CEO of Guide Corporation
19 December 2000
Dennis K. Pawley Resigns as Chairman and CEO of Guide Corporation
ANDERSON, Ind., Dec. 19 Dennis K. Pawley announced today
that he has resigned, effective immediately, as Chairman and Chief Executive
Officer of Guide Corporation, the largest North American supplier of forward
and signal lighting to the automotive industry. Guide currently supplies
approximately 75% of General Motors Corporation's automotive
forward and signal lamps in North America.
"I am disappointed that I felt I had no other choice but to resign," said
Dennis K. Pawley. "I leave Guide today having taken the company as far along
as possible in what continues to be an extremely difficult operating
relationship with General Motors. GM seems to be unwilling to fulfill its
contractual obligations to Guide or pay a reasonable price for lighting
components. While Guide's performance and quality have improved dramatically,
pricing of components makes the company unprofitable. Under the GM-Guide
supply contract, General Motors has the option to correct this matter by
either supporting Guide and granting price increases or resourcing the
business elsewhere. After months of discussions, GM seems to have chosen not
to support Guide."
Mr. Pawley continued, "Disturbingly, General Motors is willing to risk its
lighting parts supply and union relationships over a dispute involving a few
million dollars. As I have tried to work with GM's senior management team to
resolve this matter, I have become extremely disillusioned with General
Motors' apparent lack of commitment to Guide's success. Unfortunately, this
ill-fated approach by the automotive OEMs to improve their financials by
wringing profits out of an already stretched supply base seems to be in
fashion this winter. In my view, GM is putting short-term profits over the
best interests of its own union employees, customers and shareholders.
"Guide is today a much stronger company than it was two years ago.
Working closely with Palladium Equity Partners, we have transformed Guide into
an independent Tier I supplier and a recognized technological leader in North
America. Guide today has great UAW relations at local, regional and
international levels, and vastly improved quality levels. Guide's new
Engineering Technical Center is truly a world-class lighting technical center
and offers tremendous opportunities for the company to increase its status as
a leader in North American lighting technology. The union employees,
management and owners of Guide have done a fantastic job working together to
build Guide into a lean, proud, independent company," concluded Mr. Pawley.
In October 1998, affiliates of Palladium Equity Partners, LLC, a leading
New York-based private equity firm, acquired a majority interest in Guide
Corporation from Delphi Automotive Systems Corporation , before its
spin-off from General Motors. Prior to Palladium's involvement, Guide was
hindered by significant structural impediments as a captive supplier of
automotive lighting to General Motors. The company faced substantial
operating losses, excessive labor and overhead costs, significant labor
issues, fragmented management focus and limited technological investments.
Since their involvement, Palladium Equity Partners and Mr. Pawley have
brought Guide a world-class management team, improved the quality and delivery
of Guide's products, revitalized Guide's engineering capabilities, improved
manufacturing efficiency and created effective relationships with Guide's
workforce, suppliers, UAW leadership and communities. A strategic
restructuring plan was implemented that reduced overhead, rationalized labor
costs, and generated raw material savings through alternative sourcing
arrangements. Since 1998, more than $50 million has been invested in Guide's
lighting business, including a new Engineering Technical Center in Pendleton,
Indiana and a new manufacturing facility in Monterrey, Mexico.
Mr. Pawley will become more involved as a member of the operating
executive team of Palladium Equity Partners. In February 1999, Mr. Pawley
became affiliated with Palladium as one of its operating executives, advising
Palladium and its partners on a variety of existing and potential investments.
Dennis K. Pawley is the former Executive Vice President of Worldwide
Manufacturing and Corporate Labor Relations for DaimlerChrysler Corporation
. He was one of the key executives credited for leading Chrysler
Corp. to recovery in the 1990s. Mr. Pawley developed a flexible,
teamwork-based system of standard procedures and problem solving approaches
that underpinned Chrysler's turnaround. In addition, Mr. Pawley was
Chrysler's top negotiator with the UAW. Prior to Chrysler, Mr. Pawley worked
at United Technologies, Mazda Motor Corp. and General Motors, where he had a
20-year career in manufacturing management. Mr. Pawley is also the part owner
and Chief Operating Officer of Performance Learning, Inc., a corporate
development firm that uses a racing metaphor to enhance businesses' operating
systems.
Guide Corporation is North America's leading supplier of exterior
automotive lighting systems, including both forward and signal lighting.
Guide supplies lighting products to General Motors and other automotive
customers including Toyota and Isuzu. Guide's manufacturing facilities are
located in Anderson, Indiana, Monroe, Louisiana and Monterrey, Mexico. The
company also has an Engineering Technical Center located in Pendleton,
Indiana. Guide has 3,100 employees worldwide and recorded 1999 sales of
approximately $600 million. For more information, visit the Company's website
at http://www.guidecorp.com.