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Hutchinson Technology Inc. Message Board

  • longtimefollower longtimefollower Dec 20, 2011 1:44 AM Flag

    HTCH 2% holder announces his voting intentions.

    Nine members up for the board of directors, and I intend to vote against 6 out of 9 (with a very close call on one of them, so it could have easily been 7 out of 9 voted against). Overall, the board's performance has been disappointing. There is an excess of insularity on the board, and the attitude towards the wasteland that is InSpectra has been beyond boneheaded. I simply believe that people who have been around too long on this board are unwilling to see InSpectra for what it is: A SUNK COST. Do we really need TWO people on this board (Messrs. Monahan and Russomanno) from one of the most poorly performing, shareholder value destroying companies out there in Imation? I'm sorry, but what exactly does Frank Russomanno add? The two people from the medical products biz. offer a very narrow interest, that is pretty much irrelevant to our core business. They are going to be inherently inclined towards maintaining this operation in-house, rather than getting rid of it, or shutting it down outright. Meanwhile, I personally believe that old-timers like Green and Fortun are going to take an inherent attitude that HTCH absolutely must and should remain independent, even though that may NOT be in the best interest of the broader shareholder base. Is this board talking about the possibilities for M&A, in an environment where, with the evident supply chain issues, either of the two foreign based suspension assembly makers may be more interested than ever in getting its hands on capacity in the Western Hemisphere? Is it remotely possible that with the continued horrendous pricing problem (forever down), and excess capacity in the suspension assembly world, that reducing three main suppliers to two may not be EXACLY what the doctor ordered (along, deliciously, with a killing off of InSpectra)? Is this board thinking openly and creatively, and are Green and Fortun being appropriately challenged, for the sake of the outside shareholder base? There's only two people I really have faith in on that. Let's look at each director in the continuation of this message...

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    • A friendly reminder...

    • I'll join you.

    • 1) Jeffrey Green: I intend to vote against, on principle. Too much value has been destroyed. Green is only 71 years old, and yet, he only owns 157,000 shares of the company, and hasn't bought any in the open market in years. With the stock having cratered, as a simple matter of an expression of faith that the company isn't going bye-bye, the lack of insider buying is damning. Does he see this as a business, that is intended to make money? Is the Chairman of the Board as excited by the vaunted and constantly celebrated "lowest cost producer" pablum as gullible outside shareholders such as myself? (I own roughly 3x as many shares as the co-founder of the company!) Does he care to comment on the fact that a majority of shareholders, embarrassingly, voted to kick him off the board, last year...the only director so accorded? Simply put, we don't need the founder to be Chairman of the board, considering how much value has been destroyed, and considering the tendency for all of the "children" to defer to his expertise, institutional memory, past glory, etc., etc. I'd probably grudingly support him, if he wasn't the chairman. As it stands now, he doesn't deserve to be the chairman, it's not helping shareholder value, and I intend to WITHHOLD.

      2)Wayne Fortun: The buck stops with the CEO. Much value has been destroyed over the last several years. Here again, I own more shares outright (excluding his options), than our CEO. I see no insider buying in the open market in the last few years, just when we NEED Wayne, more than ever. Even though a number of insiders bought, a few weeks ago, Wayne decided he didn't need to make any statement. I view this as an act of faithlessness and complacency, AT BEST, and treason, at worst. The proxy's stating that his "intense familiarity" with the company, makes "him uniquely qualified" (uniquely??) is pure hooey. (Can't they do better than that? Yeah, he's the CEO; that automatically makes him "uniquely" qualified?) Finally, he's the director of G&K Services and C.H. Robinson Worldwide, which is one too many outside directorships for my taste. He's too busy to be on our board. He needs to focus on righting our ship. Would have supported him if he was (at least occasionally) buying stock in the open market, and only had one outside directorship instead of two.

      3) Mark Augusti: Don't have strong feelings about him. Nothing personal, but his background is in the medical area, and if InSpectra needs to be sold or closed, we don't need this director. He hasn't bought any stock in the open market, like others have recently. With the stock at $1.55, and the possibility for a huge run, if things turn around, considering his small exposure to the stock, if not NOW, Mr. Augusti, WHEN? I intend to WITHHOLD.

      Continued...

      • 1 Reply to longtimefollower
      • 4) Martha Goldberg Aronson: See Mark Augusti above. Her background is in medical, she owns a measly 5000 shares, and she hasn't bought any shares in the open market since coming on board, despite having this "unique opportunity" to show her faith that, as a newer board member, she is EXCITED by HTCH's prospects. (Apparently, she is not excited.) If she isn't interested in ponying up some cash, we don't need her, and we don't want her. I'd rather save the $60 grand or so a year, and reduce the board to 7 members from 9. Much rather. I own nearly 100x as much stock as this board member. Is she really "vested" in the best outcome for all the shareholders, with a 5000 share ownership position? If not at $1.55, than at WHAT price, Ms. Goldberg-Aronson? Not interested in your services, thank you. I intend to WITHHOLD.

        5) Russell Huffer: This was a tough choice. I was going to vote to withhold, because he's been on the board for 12 years, and has witnessed the last 4 years of disaster, and has (apparently) failed to ask the tough questions, sooner, on InSpectra. Then I thought that he is retired, he has the time, he isn't on any other boards, and (the clincher for me), he recently bought some stock in the open market, showing that he cares about SHOWING that he is aligned with the shareholders, and believes in the company's future, such that he is willing to put up HIS OWN money. Yeah, he only owns 36,000 shares outright, which is pitifully low, considering how cheap the stock is, and how he's been on the board for 12 years. And, I also suspect, with his being the chair of the nominating committee, that he is probably (just a guess) where Frank Russomanno was sourced from. It's a tough call, but I'm going to vote to retain him. He bought 10,000 shares in the open market recently. If it would have been 1000, or 3000, I would have voted to withhold, but as it stands now, I intend to vote FOR.

        6) William T. Monahan: On board for 11 years. Sourced from Imation. Why on god's green earth do we need TWO directors sourced from the monetary rat-hole that is Imation? Yeah, Monahan's tenure didn't look as bad as Russomanno's, and, no doubt, Imation was a very tough company to try to turn a successful business model out of. (3M spun it off because it was a low margin business.) So, it was a thankless task...but the record over there is nothing to write home about. More importantly, Monahan is already on THREE other boards...so he doesn't need to be on this one also. And finally, he has NOT bought stock at these depressed prices, or anytime recently. So, it's time for him to be retired. I intend to WITHHOLD.

        Continued...

 
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