Source: Koch Industries
In a
recent Wall-Street Journal article Charles Koch and Koch Industries talked
about how the company these days don’t mind minority stakes in companies
instead of purchasing whole companies (the last large merger for Koch was when
they purchased Georgia Pacific in 2005. The company bought preferred stock in
American Greetings Corporation in order to help the company go private. Koch
Industries probably saw a good return (the media would interpret this story as “Koch
Industries Controls How People Say I Love You”). Koch also paid $1.5 billion
for just a 44% stake in Guardian Industries (glass maker). In another
WSJ article Mr. Hagerty discusses just how Koch got into the glass
business. Koch actually was examining Guardian Industries for 7-8 years. Koch Industries actually looks at roughly 100 deals at any given time. Guardian didn’t want to go public after their owner died and Koch was interested
in the company so Koch installed one of their executives to become CEO. Guardian creates energy efficient glass
(energy conservation sounds green to me) and supplies the glass screens that
are used in cell phones.
In another article written by James Hagerty of the
Wall-Street Journal Koch Industries says they don’t attempt hostile takeovers
of companies. Koch Industries does get a lot of calls from people who need
capital who don’t know anyone on Wall-Street. Koch Industries doesn’t get into businesses just because the margins are
good. This might be due to their view about creating long term value for
customers. Koch Industries actually exited the gas station business years ago
when they learned running a convenience store really wasn't that convenient. Charles Koch points out that being private is
better because this way the company doesn’t have to always try to explain their
actions to outside investors. There is some truth to this as public companies
are frequently covered by analysts who can make a stock move a large amount on
just a small bit of information. As Charles Koch said in this
interview back in 2007 if a company “misses quarterly earnings projections by a
penny, and their stock goes down 10 percent”. In fact Charles Koch admits in this interview
that if Koch Industries had been a public company he would have been fired long
ago.
In this WSJ article (again by Hagerty) Charles Koch talks
about the possibility of playing scrabble. What is interesting is that Charles
Koch at the age of 77 still goes to work and keeps himself productive. According to
Koch he wants to work every day and exercise his mind. He gets up early at 6:30
A.M. and is working by 7:30 A.M. (he no longer drives himself to work). Koch
does do a lot of reading and in this article back from 1994 he was reading 3
hours a day. Koch also spends time working out on the elliptical, lifting
weights, and even does Pilates. What I found interesting was Koch use to run 30
miles a week (about 4 miles a day). He says he was pushing himself too hard and
his knees gave out (he actually had both of his knees replace according to this
profile done by The Wichita Eagle last year). The interesting part of the
interview is when Koch asks what he should be doing with his time. The
interviewer suggests that Koch play scrabble and Koch responds by saying “That’d
be something!”. I personally would suggest Mr. Koch write an autobiography in
order to explain how he became successful and so historians don’t write their
own history about Charles Koch and Koch Industries.
Bonus: Notice Charles Koch on his bookshelf have books from Dr. Walter E. Williams and Thomas Sowell
No comments:
Post a Comment