More plus less equals results - U.S. Chamber of Commerce chairman Dennis W. Sheehan

Nation's Business, Sept, 1995 by Albert G. Holzinger

Dennis W. Sheehan's business career is noteworthy not only for its duration--35 years and counting--but also for the wide range of industries it has spanned. Ironically, it was a narrowing of the scope of operations that became the key element in the successful plan executed by Sheehan and several partners to secure the economic future of the industrial-and consumer-products manufacturing company he currently heads, AXIA Inc., of Oak Brook, Ill.

The firm that's now AXIA was founded in Harvey, Ill., in 1891 as a private partnership named Bliss & Laughlin Steel Co. The producer of cold-finished steel bars raised expansion capital in 1919 by selling shares to the public; 13 years later, it began listing its shares on the New York Stock Exchange.

For the next three decades, Bliss & Laughlin's managers and shareholders reveled in the sharp upturns and suffered through the precipitous downturns of the economically sensitive steel industry.

By 1962, the largely out-of-control roller-coaster ride led Bliss & Laughlin to buy companies in unrelated industries in an effort to stabilize financial performance. By the early 1980s, only about 500 U.S. companies were larger than Bliss & Laughlin and its many subsidiaries, which had nearly 16,000 stockholders and almost $400 million in annual revenues.

The diversification process was well under way in 1977 when Sheehan joined the company as vice president, general counsel, and secretary. Over the next several years, he and a handful of close associates became increasingly alarmed that the conglomerate was becoming unmanageable. The company had become "a hodgepodge, and the span of management from the top to the factory floor had become too great," Sheehan says. Moreover, he says, "Wall Street no longer was paying a premium for diversity, so management felt that stockholders were not being accorded proper value for their shares."

In the fall of 1984, Sheehan, nine colleagues, and three financial institutions--Merrill Lynch & Co. Inc., Northwestern Mutual Life Insurance Co., and what is now The Equitable Companies Inc.--instituted a leveraged buyout. Bliss & Laughlin stockholders were paid more per share than the highest price at which the stock had ever traded. Business units, including the steel mills, were sold. AXIA Inc. was born with Sheehan as chairman, president, and chief executive officer.

"I've never been surprised at the success we have had" since then, says Sheehan of the current three-division company. It has $100 million in annual sales and 1,300 employees, about 10 of whom work out of corporate headquarters in Oak Brook.

"I felt from the start that if we could survive for 18 months to two years... the question was not whether we were going to be successful in this venture but how successful we would be," Sheehan says.

At the heart of the now-very-successful venture is the four-plant Nestaway Division, America's largest independent producer of the racks and baskets used in household dishwashers. Cleveland-based Nestaway also custom-designs and fabricates other plastic-coated wire products, notably counter-top dish drainers for Rubber-maid Inc., of Wooster, Ohio.

AXIA's other entities are Ames Taping Tool Systems Co. and the Dave Fischbein Co.

Ames Taping Tool, headquartered in Duluth, Ga., with sales locations in about 60 U.S. cities, manufactures, rents, and services automatic taping tools and related products of its own design. The tools apply the compound and paper support tape, in one operation, that join panels of gypsum wallboard.

The Fischbein Co., based in Statesville, N.C., with operations in Europe and the Far East, manufactures sealing equipment used in industrial packaging. These devices employ gluing, heat sealing, and sewing to securely close bags, primarily those used in the food, chemical, and agricultural industries.

There is little in Sheehan's resume to suggest that he would be wellsuited to run a midsize manufacturing concern. After earning a bachelor's degree with majors in political science and economics from the University of Maryland, in College Park, and two law degrees from Georgetown University, in Washington, D.C., Sheehan pursued a career in government. First he served as a legal assistant to the chairman of the National Labor Relations Board; then he was a trial attorney with the U.S. Securities and Exchange Commission.

Sheehan began work in the private sector in 1963, when he was hired by a newly formed manufacturer of electronics products, Bunker-Ramo Corp., of Oak Brook, Ill. In his 10 years as Bunker-Ramo's vice president, secretary, and general counsel, Sheehan was involved with the management of gee-whiz projects such as creation of a computerized airline-reservation system and the inception of the high-tech NASDAQ stocktrading system.

Sheehan moved into the metal-products industry in 1973, joining Diversified Industries Inc. as a director and executive vice president for administration, general counsel, and secretary. The company, based in St. Louis, turns industrial metal garbage into gold--and also into silver, platinum, and copper, depending on the original scrap metal's content.