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Look who’s sitting in the hot seat

The changing of the guard is an elaborate ceremony that takes place at various institutions around the world. Little, if anything, deters the ritual.

The changing of the guard is an elaborate ceremony that takes place at various institutions around the world. Little, if anything, deters the ritual.

In the midstate, such changes could be equated to the leadership transitions that have occurred, or soon will, at more than 20 significant firms. And comparably, the transitions cannot be prolonged or put off because of a recession.

Here’s a survey of some of the major players making moves in the region during tumultuous times.

Jeffrey D. Smith took the reins in October of East Cocalico Township-based High Concrete Group as its new president. The firm produces structural components, including columns and double-tees for parking garages.

Smith replaced Thomas M. McEvoy, who had led the firm since 2002. McEvoy is now executive vice president of the firm. Just before the change, McEvoy became chairman of the Illinois-based Precast Concrete Institute, which is part of the reason the change took place, since it will consume a lot of his time, Smith said.

Because Smith served as senior vice president of operations at East Lampeter Township-based High Industries Inc., which is the parent company of High Concrete, the transition has been smooth, Smith said.

“I was very familiar with the operation before I came over here,” he said. “It may make it more challenging as we need to focus on getting new customers and potentially get some new products and so forth. It’s also an exciting time to make a change.”

High Concrete is seeing reduced demand for concrete due to the economic environment, but for the time being, the firm is working on some large projects such as a sports stadium and a parking garage in New Jersey, Smith said.

“I think January might be a different story,” he said. “We’re going to look at all the processes we have and streamline them. These kinds of things will help us through these poor economic conditions and hopefully get us to the next business cycle.”

Rite Aid Corp. in Cumberland County in September experienced an executive-management shakeup. John T. Standley was appointed president and chief operating officer. Mary Sammons held the title of president and remains at the helm as the firm’s chief executive officer and chairwoman.

Simultaneously, the East Pennsboro Township-based drugstore operator also brought in Frank Vitrano to replace its chief administrative officer and chief financial officer. Neither Standley nor Sammons were available to comment for this article.

“John and Frank bring Rite Aid the optimal blend of financial operation and turnaround experience that our company needs at this juncture,” said Cheryl Slavinsky, a company spokeswoman. “(Sammons) proposed the management change to the board because she felt with the acquisition completed, the key task before us is to drive profitable growth.”

Rite Aid acquired the Brooks and Eckerd drugstore chains last year. The leadership transition comes at a time when same-store sales, or sales at stores open for at least a year, have struggled to remain in the black at the acquired stores. During the 13-week quarter that ended Nov. 29, same-store sales at the acquired stores decreased 1 percent, while same-store sales at Rite Aid stores – excluding the Brooks and Eckerd stores – increased 2.6 percent.

Total drugstore sales for the quarter decreased 0.9 percent to $6.44 billion, compared with roughly $6.5 billion during last year’s quarter.

During the quarter, Rite Aid faced a possible delisting from the New York Stock Exchange because Rite Aid no longer complied with the exchange’s share-price listing rule. The firm responded by proposing a reverse-stock split plan, which was approved in December by the firm’s shareholders. The plan will be implemented by Feb. 28, which is the end of the company’s fiscal year.

Virtually no transition time was required because Standley had been serving the firm in an advisory capacity for several months before the change, Slavinsky said. It also was helpful that he was employed by Rite Aid from 1999 to 2005, most recently serving as senior executive vice president, chief financial officer and chief administrative officer, she said.

“He has intimate knowledge of Rite Aid’s operations and is well-respected throughout the company,” Slavinsky said. “He was a key member of the team that helped turn around operating results earlier in the decade.”

Standley and Vitrano worked together as top executives at New Jersey-based Pathmark Stores Inc. – a $4 billion regional supermarket chain – which also is beneficial, she said.

While the transition would have taken place no matter the economic climate, it is helpful that it is taking place now, Slavinsky said.

“Especially in the current economy, I can’t think of any better situation,” she said.

In October, Bill Lehr Jr. hopped into the driver’s seat of Susquehanna Township-based Capital BlueCross after the abrupt resignation of Anita Smith in September. While Lehr said he could not talk about the reasons why Smith left, he did say the transition into his position as the Dauphin County health insurer’s president, chairman and CEO has been smooth, despite the tough market. He was already its chairman.

“I think (the economy is) just another complexity to deal with. The issues seem to get a bit more magnified,” Lehr said. “It keeps life extremely interesting.”

At the moment, the economy is not having much of an effect on Capital BlueCross because individuals tend to purchase health insurance in advance, he said. But as time goes on, economic pain could force individuals and businesses to modify the level of health insurance they buy to make ends meet, he said.

Lehr said his strategy is to keep the firm competitive and stable, while exploring other ways to serve its customers.

“Many companies consider it to be a benefit that they treat very sacredly for their employees, but sometimes things get to a point where they have to decide whether they want to continue the same level of coverage or if they want to provide coverage at all,” he said. “A little bit of the buy-down we see at this point, but of course, as things go on, who knows.”

Salvatore D. Fazzolari took the helm of Wormleysburg-based Harsco Corp. as chief executive officer at the beginning of 2008, succeeding Derek C. Hathaway. In April, Fazzolari also became chairman of the Cumberland County firm. The transition took place because of Hathaway’s planned retirement and was completed well before the financial crisis hit, said Kenneth Julian, spokesman for Harsco.

Harsco’s new leader said he is convinced the firm is holding its own in a troubled economic period. Harsco provides industrial products and services to companies in various sectors, including non-residential construction, energy, steel and metals manufacturing and railways.

“Harsco has performed well in arguably the most turbulent and challenging economic and financial period of our time,” Fazzolari said. “While our near-term prospects have become more guarded, we remain confident that we will emerge from the current environment an even stronger company.”

The firm has been cutting costs across the board, including limiting travel and hiring activities, he said. He said he expects overall employment levels this year to be below 2008.

“Difficult economic times will test the resolve of any organization, but we believe we are up to the challenge and have built a global, well-balanced business model that is fundamentally resilient,” Fazzolari said.

A seamless transition took place in April at York-based C.S. Davidson Inc. John A. Klinedinst replaced David Davidson Jr. as president and CEO of the firm. Davidson didn’t go very far. He remains the firm’s board chairman and CFO.

Klinedinst began working at the engineering firm 38 years ago as survey crew member. It was simple for him to take over when Davidson decided he wanted to be removed from a direct leadership role after serving as president for 25 years, Klinedinst said.

The change had nothing to do with the economy and does not make handling the tough market more challenging, Klinedinst said. And it was a shorter, smoother transition because of an internal promotion, he said.

“The important part of leadership transition and the important part of dealing with the economy are the same: It’s relying on the core values of the firm,” Klinedinst said.

The firm is stable, with no planned layoffs and an adequate workload, but he said he questions how long that will last into this year. The fact that the firm’s work is diversified, with 60 percent of its clientele coming from local government and the remaining from private entities, will help the company make it through, he said.

“As long as you keep your eye focused on the values of the firm, you can weather any form of economic downturn,” he said. “I think it’s the firms that make a knee-jerk reaction to the decline in economy and do things that they’re not qualified to do or equipped to do that get themselves in trouble.”

The lineup

Last year, more than 20 midstate firms announced plans for some sort of leadership change, according to Business Journal research. There likely are more firms out there. The changes took place for various factors: retirements, career changes or the need for a fresh set of eyes to help in the middle of a tumultuous economy. Here are some of the more visible transitions that have been announced, in order of date of change:

The Hershey Co.
Headquarters: Dauphin County
Change: Oct. ’07
David J. West replaced Richard H. Lenny as president and director of the company. West took over the CEO position in December 2007. Lenny remained chairman through the end of 2007.

Gannett Fleming Inc.
Headquarters: Cumberland County
Change: Jan. ’08
William M. Stout succeeded Ronald J. Drnevich as chairman of the board and CEO. Drnevich retired in January 2008.

Harsco Corp.
Headquarters: Cumberland County
Change: Jan. ’08
Salvatore D. Fazzolari replaced Derek C. Hathaway as CEO of the firm. In April, Fazzolari also replaced Hathaway as chairman of the firm. Hathaway retired.

Lancaster County Community Foundation
Headquarters: Lancaster County
Change: Feb. ’08
Samuel Bressi replaced Debbie Schattgen as president and CEO.

York Water Co.
Headquarters: York County
Change:
March ’08
Jeffrey R. Hines replaced Jeffrey S. Osman as president and CEO.

C.S. Davidson Inc.
Headquarters: York County
Change: April ’08
John A. Klinedinst replaced David Davidson Jr. as president and CEO. Davidson remains chairman of the board and chief financial officer for the firm.

Hershey Trust Co. and M.S. Hershey Foundation
Headquarters: Dauphin County
Change: April ’08
Robert C. Vowler stepped down as president and chairman of the M.S. Hershey Foundation and as president and CEO of Hershey Trust Co. Raymond Gover, a board member at the M.S. Hershey Foundation, took Vowler’s place as president and chairman of the foundation. Robert Reese, a board member of the Hershey Trust Co., is serving in Vowler’s place as president and interim managing director of the trust.

Sterling Financial Corp.
Headquarters: Lancaster County
Change: April ’08
The PNC Financial Services Group Inc. finalized its acquisition of Sterling Financial Corp. As a result, Sterling was folded into the Pittsburgh-based firm’s Central Pennsylvania region, which is led by Dennis P. Brenckle. J. Roger Moyer Jr. was the former CEO of Sterling.

Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center
Headquarters: Lancaster County
Change: May ’08
George Miller became CEO of the two hospitals, which are owned by Health Management Associates, a for-profit health care system based in Florida.

Buchart Horn Inc./Basco Associates
Headquarters:
York County
Change: June ’08
Brian S. Funkhouser replaced Paul E. McNamee as president and CEO.

Giant Food Stores
Headquarters: Cumberland County
Change: July ’08
Sander van der Laan replaced Carl Schlicker as president and CEO. In February 2007, Schlicker replaced Tony Schiano, who left the firm in March 2007.

National Civil War Museum
Headquarters: Dauphin County
Change: Aug. ’08
David Patterson became the museum’s CEO. The museum’s first CEO, George Hicks – stepped down in 2006. At that point, the museum’s board decided that each year, the board chairman would also become acting CEO.

Ames True Temper Inc.
Headquarters: Cumberland County
Change: Sept. ’08
Duane Greenly replaced Richard Dell, who retired as the firm’s president and CEO and had been with the company since 2002.

Rite Aid Corp.
Headquarters: Cumberland County
Change: Sept. ’08
John T. Standley was appointed president and chief operating officer. Mary Sammons previously held the title of president and remains at the helm as the firm’s CEO and chairwoman.

High Concrete Group
Headquarters: Lancaster County
Change: Oct. ’08
Jeffrey D. Smith assumed the role of president. He replaced Thomas M. McEvoy, who was president of High Concrete since 2002. McEvoy is now executive vice president of the firm.

Capital BlueCross
Headquarters: Dauphin County
Change: Oct. ’08
Board Chairman Bill Lehr Jr. took over as the company’s new president and CEO. Lehr had been acting president and CEO since the sudden resignation of Anita Smith in September 2008.

Mid Penn Bancorp Inc.
Headquarters: Dauphin County
Change: Oct. ’08
Alan W. Dakey resigned as the firm’s president and CEO. He also resigned from his positions as a director of Mid Penn Bancorp and as chairman, president and CEO of its Mid Penn Bank subsidiary. Mid Penn Bancorp’s board Chairman Edwin D. Schlegel was named interim president and CEO of the firm.

The Wolf Organization Inc.
Headquarters: York County
Change: Oct. ’08
Ron Blevins replaced Len Kopec as CEO and chief financial officer after Kopec announced his retirement.

Antique Automobile Club of America Museum
Headquarters: Dauphin County
Change: Nov. ’08
Holly Bedsole became the executive director of the museum. She replaced Patrick Foltz, who resigned in June.

Wickersham Construction and Engineering Inc.
Headquarters: Lancaster County
Change: Nov. ’08
Albert L. Mauger was named chairman of the board of directors, and Bradford B. Smith was named president of the organization. The chairman position was newly created.

York County Community Foundation
Headquarters: York County
Change: Dec. ’08
Susan Barry resigned as president. A replacement has yet to be determined.

Graham Packaging Co.
Headquarters: York County
Change: Jan. ’09
Mark Burgess, previously the firm’s chief financial officer and chief operating officer, became its CEO as a result of the resignation of Warren Knowlton at the end of 2008. Knowlton remains the firm’s executive chairman.

Orrstown Financial Services
Headquarters: Cumberland County
Change: May ’09
The firm’s CEO and president Kenneth R. Shoemaker is retiring. His replacement is yet to be determined.

 

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